Corporate Governance

The Group’s strategy is to pursue energy solutions that offer cost effective, low emission and secure energy for the United Kingdom. It will:

• develop discovered gas assets utilising existing infrastructure to meet short term energy demand at significantly lower cost and carbon footprint than LNG imports;
• support the transition to net zero by supplying integrated energy hubs using hydrogen and renewable low emission technologies; and
• identify and develop reservoirs for CO2 sequestration to further support the drive to Net Zero emissions.

To this effect the Group has secured its foundation asset, the Marram Field, which is a shallow water development opportunity in the UK Irish Sea containing 38.8 BCF Reserves + 9.2 BCF unrisked contingent resources. The Group is currently progressing work to reach Final Investment Decision, targeting Q3 2024.

The Group supports an open and transparent dialogue with shareholders with the aim of ensuring shareholders views on the performance of the Group are heard and shareholders needs and objectives are understood.

The annual general meeting is a key part of the Group’s investor relations strategy and shareholders are encouraged to participate, particularly private investors who have the opportunity to ask questions and raise issues, either formally during the meeting or informally with the Directors following conclusion of business.

Direct communication with shareholders is achieved primarily through the timely release of regulatory news, via a regulatory information service, which can be accessed through various channels, including the London Stock Exchange website and the Group’s website.

https://www.londonstockexchange.com
energypathways.uk

The Group maintains an ongoing investor relations programme which includes individual meetings with institutional shareholders and analysts following the preliminary and half-year results, including presentations to institutions as well as face to face, or virtual, briefings for groups of shareholders. Ongoing shareholder communication is conducted regularly throughout the year on an ad hoc basis. The Directors aim to answer as many questions as possible in these sessions.

The Directors are very aware of the Company’s corporate, environmental and social responsibilities. In pursuing its business objectives EnergyPathways is committed to delivering lasting benefit to the local communities and environments where it works as well as to its shareholders, employees and contractors.

The Directors are responsible for setting the risk framework within which the Group operates and ensuring that suitable risk-management controls and reporting structures are in place throughout the Group.

The management of the business and the execution of the Group’s strategy are subject to a number of risks. The Directors ensure that risks are mitigated as far as reasonably practicable by performing a detailed review of the issues pertaining to each significant decision. Significant decisions are reviewed by the Board having consulted the Group’s professional third-party advisers, be they legal, financial or technical. The Board will convene on a regular basis, either by telephone or in person on a formal basis to discuss risk management.

The nature of the Group’s operations has particular risk management challenges, including, in particular, maintaining the health and safety of all staff and contractors working on site and ensuring that all drilling and related operations are carried out in an environmentally sound and safe manner. All health and safety measures are formalised, described in detailed manuals and are explained in person to all people associated with the Group’s operational activities. In addition, the Group ensures that it has appropriate insurances in place before commencing any of its planned technical work.

The Board meets formally in person and by telephone multiple times throughout the year and at least six times per year.

The Directors encourage a collaborative board culture to ensure that each decision reached is always in the Group’s and its shareholders’ best interests and that any one individual opinion never dominates the decision-making process. The Directors seek, so far as possible, to achieve decisions by consensus and all Directors are encouraged to use their independent judgement and to challenge all matters whether strategic or operational.

The Board maintains a balance of Executives and Non-executive directors. Among the Directors currently there are three, Non-executive Directors being the Non-executive Chairman Mark Steeves, Steve West and Horácio De Brito Carvalho with Mark Steeves and Horácio de Brito Carvalho being considered to be independent for the purposes of the QCA Code. The Directors are to be available for Group business in line with the terms of their executed engagements, and the Non-executive Directors will be available for any Company business when it may arise.

The Board delegates certain decisions to an Audit Committee and a Remuneration Committee. Details of these committees are included in Principles 7 and 9.

The Directors currently consist of three Executive and three Non-executive Directors. The Board has an appropriate balance of skills and expertise across the areas of resources, operations, finance and public markets. The Board membership is reviewed periodically as the needs of the Group evolve.

Each Director takes their continued professional and technical development seriously.

The Board ensures that it is well advised and supported by utilising a range of external experts in various fields, and employs accountants, legal counsel and a nominated adviser in accordance with the AIM Rules.

The Board is responsible for formulating, reviewing and approving the Group’s strategy, budgets and corporate actions. The Company has established properly constituted Audit and Remuneration Committees of the Board with formally delegated duties and responsibilities.

Audit Committee

The Audit Committee has primary responsibility for monitoring the quality of internal controls, ensuring that the financial performance of the Company is properly measured and reported on and ensuring compliance with the AIM Rules for Companies. It receives and reviews reports from the Group’s management and auditors relating to the interim and annual accounts and the accounting and internal control systems in use throughout the Group. The Audit Committee meets no less than three times each year and has unrestricted access to the Group’s auditors. The Audit Committee comprises a minimum of three Directors, the majority of whom are independent Non-executive Directors, and a minimum of one member shall have recent and relevant financial experience. The members of the Audit Committee are Steve West (as Chairman of the Audit Committee), Mark Steeves and Horácio De Brito Carvalho.

Remuneration Committee

The Remuneration Committee reviews the performance of Executive Directors and makes recommendations to the Board on matters relating to their remuneration and terms of employment. The committee also makes recommendations to the Board on proposals for the granting of share options and other equity incentives pursuant to any share option scheme or equity incentive scheme in operation from time to time. The Remuneration Committee meets at least twice each year. The Remuneration Committee comprises a minimum of two Directors, both of whom are independent Non-executive Directors. The members of the Remuneration Committee are Horácio De Brito Carvalho (as Chairman of the Remuneration Committee), and Mark Steeves.

The Directors strive to promote a corporate culture based on sound ethical values and behaviours. To that end, the Company has adopted a strict anti-corruption and whistle-blowing policy, but the Directors are not aware of any event to date that might be considered to breach this policy. The executive Directors will ensure that external contractors are aware of, and comply with, this policy.

The Company has also adopted a code for Directors’ and employees’ dealings in securities, which is appropriate for a company whose securities are traded on AIM. The code is in accordance with the requirements of MAR.

The Board is also aware that the tone and culture that it sets will greatly impact all aspects of the Group and the way that employees behave, as well as the achievement of corporate objectives. A significant part of the Group’s activities is centered upon an open dialogue with shareholders, employees and other stakeholders. Therefore, the importance of sound ethical values and behaviours is crucial to the ability of the Group to successfully achieve its corporate objectives.

AIM quoted companies are required to state which recognised corporate governance code they follow, how they comply with such code, and to explain reasons for any non-compliance. The Directors recognise the value and importance of high standards of corporate governance and intend, given the Group’s size and the constitution of the Board, to comply with the recommendations set out in the QCA Code. 

The Board

The Board is responsible for the overall management of the Group’s long-term objectives and strategy, the approval of budgets, the oversight of the Group’s operations, the maintenance of sound internal control and risk management systems and the implementation of the Group’s strategy, policies and plans. While the Board may delegate specific responsibilities, there is a formal schedule of matters specifically reserved for decision by the Board. Such reserved matters include, amongst other things, approval of significant capital expenditure, material business contracts and major corporate transactions. The Board meets regularly to review performance.

The QCA Code recommends at least two members of the Board comprise Non-executive Directors determined by the Board to be independent. The Board is comprised of three executive Directors and three Non-executive Directors, of which two are independent and, as such, the Company complies with the requirements of the QCA Code in this regard.

The QCA Code recommends that the Board should appoint one of its independent Non-executive Directors to be the Senior Independent Director. However, given the size and maturity of the Group it has been decided to defer the appointment of a Senior Independent Director. If shareholders have concerns over an issue that the normal channels of communication (through the Chairman, the Chief Executive Officer or the Chief Financial Officer) have failed to resolve or for which such channels of communication are inappropriate, they are invited to contact one of the Independent Non-executive Directors.

The Board has created an Audit Committee and a Remuneration Committee, each with written terms of reference and formally delegated duties, which are outlined above.

The Company ensures that a printed Annual Report is delivered to shareholders when requested, and also made available on the Company’s website. All RNS announcements are released in a timely manner, while also ensuring all announcements are drafted in a clear and concise fashion. In addition, all shareholders are encouraged to attend the Company’s Annual General Meeting and virtual or in person briefing as and when they are arranged. The outcome of all shareholder votes is disclosed in a clear and transparent manner via RNS.

The Company has included historical Annual Reports, Notices of General Meetings and RNS announcements since its admission to trading on AIM on its website. The Company also lists contact details on its website, should shareholders wish to communicate with the Board.

The Company includes, where relevant, in its Annual Report, any matters of note arising from the Audit or Remuneration Committees.

Given the size of the Group, the Board is of the opinion that no formal communication structures are required at this time. The Company will, however, ensure continued disclosure of all items in conjunction with AIM Rule 26 on its website.