Code of Corporate Governance
Bahamas Petroleum Company seeks to apply and adhere to the principles described within the UK Corporate Governance Code and the Quoted Companies’ Alliance code of best practice in so far as it is practicable for a Company of its size and complexity, despite not being required to do so by its public listing on the London Stock Exchange’s Alternative Investment Market.
The Board meets regularly to discuss and consider all aspects of the Company’s activities. A Charter of the Board has been approved and adopted which sets out the membership, roles and responsibilities of the Board. The Board is primarily responsible for formulating, reviewing and approving the Group’s strategy, budgets, major items of capital expenditure, acquisitions and its system of internal controls. The Board is also responsible for overseeing compliance of the Company with applicable legislation in all jurisdictions of operation and with the AIM Rules For Companies. The Board seeks input from specific committees to ensure ongoing effectiveness in this role.
The Remuneration Committee is responsible for making recommendations to the Board of Directors regarding executive remuneration packages, including bonus awards and share options.
The Nomination Committee assists the Board in fulfilling its responsibilities in the search for and evaluation of potential new directors and ensuring that the size, composition and performance of the Board is appropriate for the scope of the Company’s activities.
The Audit Committee is responsible for ensuring that the Company’s financial performance is properly reported and monitored and receives all reports from the company’s independent auditors, PricewaterhouseCoopers, who conduct the annual audit of the Company financial statements. The Audit Committee’s focus also encompasses compliance with legal requirements, accounting standards, relevant regulatory requirements and all corporate policies.
The Company has also established a Risk Committee as well as a Health, Environment, Safety and Security Committee, comprising executive management. These committees apply oversight and governance control of the Company’s risk management activities – the policies and charters for which are published on the website.
The Board approves and implements guidance to help ensure and guide compliance with all procedures and policies.
Disclosure and Transparency
The Company is listed on the London Stock Exchange’s Alternative Investment Market and is therefore compelled to comply with all the strict disclosure and transparency rules applied to public companies in the United Kingdom. In accordance with these rules, the company discloses all the information that could be deemed material to the performance of the business and the interests of shareholders.
All disclosures by the Company in compliance with AIM requirements and Company policy are undertaken through either the RNS system, content hosted on the Company website or both. The Company does not engage in bilateral discolsure of information to the public nor does it, or any of its employees, engage in or comment on any discussions which take place in public or private forums, including internet forums, bulletin boards and investor chatrooms.
Compliance with International Rules
As a publicly traded company in the United Kingdom and a Bahamian International Business Company (“IBC”), Bahamas Petroleum Company is required to manage its business in compliance with all laws of both The Bahamas and the United Kingdom. This includes the UK Anti-Bribery and Corruption Act (see the Ministry of Justice guide to the Act). The Company has defined a strict anti-bribery and corruption policy consistent with the Act, and is committed to enabling staff to receive all necessary training to ensure full compliance with all procedures therein.
Further, rules governing the Company’s public listing require continuous disclosure of facts material to the performance of the business and the interests of shareholders. As and when the company becomes listed on BISX additional rules of compliance will be similarly adhered to.
Policy on Gifts, Donations and Sponsorship
The Company has adopted a gift and hospitality policy to ensure all staff throughout the Company are guided to act within the principles set out by the Board of Directors. This policy contains various procedures designed to ensure that the provision of any gifts, donations, sponsorships or hospitality/entertainment by any Company employee receives appropriate scrutiny for compliance with the principles of the policy, as well as those set out in the anti-bribery and corruption policy, prior to any such activities receiving approval for execution.
Bahamas Petroleum Company’s exploration licences, individually held by Bahamian companies, each require a Resident Manager (specifically a resident of The Bahamas). The Company satisfies this requirement through the Bahamian residency of its executive management and legal counsel which are based at the Company’s substantial operational office in Nassau, The Bahamas. Prior to 2011, no such permanent corporate presence was maintained in The Bahamas. Consequently, the role of Resident Manager was fulfilled via an approved, contracted agent who undertook the provision of such regulated activities to the broader market for corporate services in The Bahamas.
The company is apolitical, has not, does not and will not make campaign contributions as any such activity would contravene a number of the company’s policies and procedures outlined above.
Numerous Solicitors and legal firms have been consulted by the company in the normal conduct of its business across several jurisdictions. Each advisor is selected based upon its demonstrated competency and relevant experience in the matter of concern. In no jurisdiction, where the company is active, is advice constrained to that of a single provider.
Board of Directors
The Board meets regularly to discuss and consider all aspects of the Company’s activities. A Charter of the Board has been approved and adopted which sets out the membership, roles and responsibilities of the Board. The Board is primarily responsible for formulating, reviewing and approving the Group’s strategy, budgets, major items of capital expenditure and acquisitions. The Board currently consists of the Non-Executive Chairman, the Chief Executive Officer, and three Non-Executive directors. The Group will hold at least four Board meetings throughout the year at which reports relating to the Group’s operations, together with finance reports, will be considered.
The Company operates with a remuneration committee, an audit committee, a nomination committee and a health and safety committee.
The remuneration committee comprises Adrian Collins, William Schrader and Edward Shallcross and is chaired by Edward Shallcross. It will meet at least twice a year and will review the performance of Executive Directors and, within agreed terms of reference, set the scale and structure of their remuneration including pension rights, the Group’s policy on compensation of the Executive Directors and the basis of their service agreements with due regard to the interests of shareholders. The remuneration committee also administers the Company’s share incentive schemes. No Director will participate in discussions or decisions concerning his own remuneration.
The audit committee comprises Edward Shallcross (Chairman), James Smith and Ross McDonald. It will meet at least twice a year and will be responsible for, amongst other things, ensuring that the financial performance of the Group is properly reported and monitored, focusing particularly on compliance with legal requirements, accounting standards and relevant regulatory requirements. It is also responsible for reviewing the auditors’ reports relating to the accounts and internal control systems. The audit committee will also meet the auditors at least once a year and will review the reports from the auditors relating to accounts and internal control systems.
The Nomination Committee comprises Adrian Collins, William Schrader, Simon Potter and Edward Shallcross, and is chaired by Adrian Collins. It will meet at least twice a year and assist the Board in fulfilling its responsibilities in the search for and evaluation of potential new directors and ensuring that the size, composition and performance of the Board is appropriate for the scope of the Company’s activities. It is recognised that shareholders of the Company have the ultimate responsibility for determining who should represent them on the Board.
Internal Controls and Risk Management
The directors acknowledge their responsibility for the Company’s system of internal control and for reviewing its effectiveness. The system of internal control is designed to manage the risk of failure to achieve the Company’s strategic objectives. It cannot totally eliminate the risk of failure but will provide reasonable, although not absolute, assurance against material misstatement or loss.
Bahamas Petroleum Company’s shares are traded on AIM and as such the Company is not subject to the requirements of the UK Corporate Governance Code on corporate governance, nor is it required to disclose its specific policies in relation to corporate governance. The Quoted Companies’ Alliance has issued a guidance booklet setting out a code of best practice and via the framework described below, the Board of Directors of Bahamas Petroleum Company seeks to apply the principles within that code and within the UK Corporate Governance Code in so far as it is practicable for a Company of its size and complexity. Recognising the increasing work scope of the Company the Board has resolved to form a specific Risk Committee consisting of at least three members of the Board to assist the Board of Directors in fulfilling its responsibilities with respect to the oversight and governance control of the Company’s risk management activities. The Committee has overview and governance control responsibilities for strategic, operational, environmental, sustainability, project, market, ethical, reputational, financial, compliance, technology and human capital risk management. The Committee’s responsibilities are to be exercised through reports from and discussions with management. The Committee has authority from the Board to review and investigate any matter within its mandate and make recommendations to the Board in relation to the outcomes.
“Risk Committee Charter (PDF 422KB)”
Health, Safety, Environment and Security Committee
Given the importance to the Company of operating in a manner that causes no harm, the Company has also established a specific committee to examine and report on matters concerning health, safety, environment and security. This committee comprises William Schrader, Simon Potter and the Group Environmental Scientist (Non-Board).
“Health, Safety, Environment and Security Policy (PDF 430KB)“