Governance
Effective corporate governance is essential to the long-term success of Serval Resources.
The Directors are responsible for the corporate governance of the Company, and guide and monitor the Company’s business on behalf of its Shareholders. The Company and its Directors and the Proposed Director are fully committed to achieving and demonstrating high standards of accountability and transparency in their reporting and see the continued development of the Company’s corporate governance policies and practices as fundamental to the Company’s successful growth.
Serval’s Board of Directors is collectively responsible to the company’s shareholders for the long-term sustainable success of the Company by providing effective leadership. The Board comprises five Directors, being one Executive Director, three independent Non-Executive Directors and one Non-Executive Director, reflecting a blend of different experiences and backgrounds that can be brought to bear for the benefit of the Group.
The Board meets regularly to review, formulate and approve the Group’s strategy, budgets, operations and corporate actions, and to oversee progress towards its goals.
Compliance with the QCA Code
In accordance with the AIM Rules for Companies, the Company is required to follow a recognised corporate governance code and the Company has elected to adopt the principles set out in the QCA Code.
Serval has complied with the QCA guidelines where practical for a company of its size and development. The below sets out an explanation of how Serval applies each of the 10 principles within the QCA Code and the reason for any aspect of non-compliance.
Principle One – Business Model and Strategy
The Company has a clear business model which is centred around the business of identifying, acquiring, and exploring mineral properties located in Namibia, Botswana, following the successful acquisition of Kalahari Copper Limited, and Côte D’Ivoire, subject to the joint venture and earn-in agreement with Laminele. With the collective licenses held, Serval is looking a creating a pre-eminent copper and associated strategic metals exploration and development company.
Principle Two – Corporate Culture
The Board recognises that their decisions regarding strategy and risk will impact the corporate culture of the Company as a whole which in turn will impact the Company’s performance. The Directors are very aware that the tone and culture set by the Board will greatly impact all aspects of the Company and the way that consultants or other representatives behave. The corporate governance arrangements that the Board has adopted are designed to instil a firm ethical code to be followed by Directors, consultants and representatives alike throughout the entire organisation. The Company strives to achieve and maintain an open and respectful dialogue with representatives, regulators, suppliers and other stakeholders. Therefore, the importance of sound ethical values and behaviours is crucial to the ability of the Company to successfully achieve its corporate objectives. The Board places great importance on this aspect of corporate life and seeks to ensure that this flows through everything that the Company does. The Directors are focused on ensuring that the Company maintains an open culture facilitating comprehensive dialogue and feedback and enabling positive and constructive challenge.
The Company has adopted a code for Directors’ dealings in securities which is appropriate for a company whose securities are traded on AIM and is in accordance with the requirements of the Market Abuse Regulation which came into effect in 2016. Issues of bribery and corruption are taken seriously. The Company has a zero-tolerance approach to bribery and corruption and has an Anti-bribery and Corruption Policy in place to protect the Company, its employees and those third parties to which the business engages with.
Principle Three – Understanding shareholder needs and expectations
The Board is committed to maintaining good communication and having constructive dialogue with its shareholders. They will be encouraged to attend the AGM and participate in hearing the CEO and Chairman who provide regular updates through the registered news services, website and on social media platforms.
Principle Four – Considering wider stakeholder and social responsibilities
The Board recognises that the long-term success of the Company is reliant upon open communication with its internal and external stakeholders: investee companies, shareholders, contractors, suppliers, regulators and other stakeholders. The Company has created close ongoing relationships with a broad range of its stakeholders and will ensure that it provides them with regular opportunities to raise issues and provide feedback to the Company. As the Company evolves, we anticipate that this aspect of community engagement will evolve further.
The Company has established a Technical, Health and Safety Committee that, amongst other items, will look to consider the local stakeholders and the Groups social responsibilities in and around the areas that they operate.
Principle Five – Risk Management
The Board is responsible for ensuring that procedures are in place and are being implemented effectively to identify, evaluate and manage the significant risks faced by the Company. The Company has a framework of internal financial controls to address financial risk and regularly reviews the non-financial risks to ensure all exposures are adequately managed. The Company has established a Risk Matrix which will be considered at each Audit & Risk Committee meeting as well as discussed at at least two board meetings per annum. The Company maintains appropriate insurance cover in respect of legal actions against the Directors as well as against material loss or claims against the Company.
The principal risks and uncertainties are as set out in the Risk Factors, of the AIM Admission Document.
Principle Six – A Well-Functioning Board of Directors
The Board will maintain a balance of executive and non-executive Directors. Upon Admission, the Company will have one Executive Directors and four Non-Executive Directors (including the Chairman) and non-board CFO who will provide full financial support / guidance to the Board. The independence of the Directors has been considered at Admission to AIM, with Max Denning, Brian Gordan and John Treacy deemed to be independent, thus satisfying the QCA guidance of majority of the Board being independent Directors. The CEO’s mandatory work commitments are defined in their executive service agreements whilst the Non-Executive Directors are available for any Company business when it may arise, and each bring with them their own specialties which will be of great service to the performance of the Company.
Further information about the Directors can be found in the Information on the Company section in the AIM Admission Document as well as on the Company website at (www.servalresources.com).
It is expected that the Directors will meet at least six times per annum.
Principle Seven – Appropriate governance structures
The Company’s governance structures are appropriate for a Company of its size. The Board is expected to meet at least six times per annum with the Directors continuously maintaining an informal dialogue between themselves. The Chairman is responsible for the effectiveness of the Board as well as primary contact with shareholders, while the execution of the Company’s investment strategy is a matter reserved for the CEO. The current governance structure is outlined below:
Audit & Risk Committee – Upon Admission, the Company’s Audit & Risk Committee will comprise three members: Max Denning, Andrew Benitz and John Treacy who acts as Chair. The Board considers John’s extensive public company experience suitable to be appointed Chair of the Audit & Risk Committee and notes that the Group’s CFO, Richard James, will also attend each Audit & Risk Committee meeting as a guest. The Audit & Risk Committee maintains primary responsibility for monitoring the quality of internal control and ensuring that the financial performance of the Company is properly measured and reported on and for reviewing reports from the Company’s auditors relating to the Company’s accounting and internal controls.
The committee is also responsible for making recommendations to the Board on the appointment of auditors and the audit fee and for ensuring that the financial performance of the Company is properly monitored and reported.
The Audit & Risk Committee will meet two times per annum on and around the approval of the interim and annual financial statements.
Remuneration Committee – The Company remuneration committee comprises two members: John Treacy and Brian Gordon who acts as Chair. The Remuneration Committee is responsible for both the review and recommendation of the scale and structure of remuneration for senior management. In reviewing the remuneration policy of the Company, this will include any bonus arrangements or the award of share options with due regard to the interests of the Shareholders and the performance of the Company.
The Remuneration Committee will meet two times per annum.
Nomination Committee – Currently, due to the size of the Company, there is no Nomination Committee. Nominations are currently considered by the whole Board. The Directors anticipate that a Nomination Committee will be established in the future as the Company develops.
The Nomination Committee will review the composition and balance of the Board and senior management on a regular basis to ensure that the Board and senior management have the right structure, skills and experience in place for the effective management of the Company’s business and are expected to meet twice a year.
The Company believes that the Directors have wide ranging experience working for/and/or advising businesses operating within the natural resources sector. They also have an extensive network of relationships to reach key decision-makers to help achieve their strategy. The Board recognises that it currently does not have any female Directors however as it grows, it will look to recruit and develop a diverse and more gender-balanced executive team.
Principle Eight – Evaluation of Board Performance
Internal evaluation of the Board, the Committees and individual Directors will be undertaken on an annual basis in the form of peer appraisal and discussions to determine the effectiveness and performance against targets and objectives. As a part of the appraisal, the appropriateness and opportunity for continuing professional development whether formal or informal is discussed and assessed.
Principle Nine – Remuneration policy
The Board is committed to ensuring that the creation of value for shareholders aligns with the interests of executives and employees of the Company. The remuneration of the Board is to be implemented at admission and will be reviewed annually to ensure that it remains appropriate for the level of time and responsibilities that each Director is committing to their roles. The Board remuneration currently comprises a mixture of salary and equity-based compensation so the Board feels as though all members of the Board are currently remunerated appropriately.
Principle Ten – Shareholder Communication
The Board is committed to maintaining good communication and having constructive dialogue with its shareholders in compliance with regulations applicable to companies quoted on AIM. All shareholders are encouraged to attend the Company’s Annual General Meeting where they will be given the opportunity to interact with the Directors. Investors also have access to current information on the Company through its website, (www.servalresources.com).
The Board takes feedback from a wide range of shareholders (large and small) and endeavours at every opportunity to pro-actively engage with all shareholders (via regular news reporting-RNS) and engage with any specific shareholders in response to particular queries they may have from time to time. The Board considers that its key decisions during the period have impacted equally on all members of the Company.