Corporate governance

The Board of directors is accountable to the shareholders for the corporate governance of the Group. At this time in the development of the Company and similar to most companies at this stage of development, Bellzone Mining plc does not comply fully with the UK Corporate Governance Code (the “Code”). The Board is taking measures and applying resources to ensure that the Company will be in a position to make a positive statement on all aspects of the Code when appropriate. Notwithstanding the foregoing, the Board strives to ensure that the Company operates in an effective and efficient way, with integrity and with due regard for the interests of all stakeholders.

Board of Directors

The Board of directors is responsible for the conduct of the Company’s affairs and the success of the Group in achieving its objectives.

The main functions and responsibilities of the Board are:

  • identifying and monitoring the principal risks facing the business and, wherever possible, mitigating the impact of these risks;
  • stewardship of the financial affairs of the Company;
  • effective communication with all stakeholders including shareholders, employees, the government of Guinea and the host communities; and
  • approving the Company’s strategy and objectives, operating plans, key transactions and budgets as presented by management.

The Board currently consists of five members: three executive directors and two non-executive directors. The balance between executive and non-executive members is not in compliance with the provisions of the Code. Biographies of the directors appear on page 16 of the 2012 Annual Report and their dates of appointment appear on page 20 of the 2012 Annual Report. The directors’ varied backgrounds and relevant industry experience provide Bellzone with a good mix of knowledge and expertise necessary to manage the business effectively.

The Company is confident that it has assembled a highly experienced and capable Board with the necessary skills to deliver on the development of the projects, implement good governance, proactively exploit new opportunities and, most importantly, to create value for our shareholders. The Board aims to meets face to face on average four times a year with Board meetings taking place monthly, normally by telephone conference. The Board, together with the Audit Committee (“AC”) and Remuneration Committee (“RC”), deals with all important aspects of the Group’s affairs. The Non-Executive Chairman, Michael Farrow, is responsible for the leadership of the Board and for ensuring effective communication between the executive and non-executive directors. Formal agendas and Board papers are sent to the directors in a timely fashion prior to Board meetings. At present, the directors do not consider a separate Nominations Committee necessary with recommendations for appointments to the Board and senior management being made by the Board as a whole.

The Board believes that its current composition is sufficient to meet the current needs of the Company but that further appointments will likely be required to reflect the evolving nature of the Company’s business, and to ensure it can function and be seen to function independently of executive management. In the event of a conflict of interest, the conflicted director will, in accordance with corporate law and his fiduciary obligations as a director, disclose the nature and extent of his interest to his fellow directors and the Company secretary, and he will also abstain from voting on or against the resolution in respect of which they are conflicted. The non-executive directors have no interests in the ordinary shares of the Company and hold no share options. The following committees deal with the Group’s affairs, and provide experienced and objective advice to the Board.

DirectorsTitleCommittees
Michael FarrowNon-Executive
Chairman
AC (Chairman), RC
Glenn BaldwinCEO -
Terry LarkanCFO -
Nikolajs ZuksExecutive director -
Antony Gardner-Hillman Non-executive director RC (Chairman), AC

Audit Committee

The AC oversees the operation of good financial practices throughout the Group, and ensures that management has put controls in place to protect (i) assets and (ii) the integrity of financial information. The AC reviews the interim and annual financial statements, as well as all aspects of the audit programme and provision of non-audit services by the auditors.

The committee comprises only non-executive directors who are considered independent in that they have never personally held executive positions with the Company. The committee is chaired by Michael Farrow with Antony Gardner-Hillman being the other member. Glenn Baldwin and Terry Larkan are not members of the committee but do attend part of the meetings to ensure the committee is fully briefed on all financial issues affecting the Company. The external auditors have a direct line of communication to the committee through its chair and have been invited by the committee to bypass management if deemed necessary. The committee, through its chair, may contact any employee directly as deemed necessary and any employee may bring before the committee any matter involving any alleged questionable, illegal or improper financial practices or transactions. If issues arise which are deemed outside the areas of expertise of the committee then independent expert advice will be sought.

Remuneration Committee

The RC comprises only non-executive directors who are considered independent in that they have never personally held executive positions with the Company. The committee meets as when required, and is chaired by Antony Gardner-Hillman with Michael Farrow being the second member. Being composed of non-executive directors who have no personal interest in the outcome of its decisions, the committee provides reassurance to the shareholders that the remuneration of the executive directors is fair and not excessive. Financial packages for executive directors are established by reference to those prevailing in the market place for directors of similar status, skills and qualifications, and should be sufficient to attract, retain and motivate directors of the quality required to run the business successfully.

The main duties of the committee are to:

  • set the remuneration and other benefits granted to the executive directors and those individuals reporting directly to them;
  • propose the fees for the directors;
  • consider and make recommendations in respect of the terms of the service contracts of the executive directors and any proposed changes to those contracts;
  • oversee the operation of the Company’s executive and employee share plans; and
  • assist the Board in fulfilling its responsibilities with respect to hiring, evaluation, compensation and succession planning for senior management and other employees.

Internal controls

Management is responsible for establishing and maintaining the Group’s internal controls while the directors are responsible for implementing processes to review and ensure the effectiveness of such controls. Financial, operational and compliance procedures are designed to safeguard the Group’s assets and are regularly reviewed by the Board. The internal control system is an ongoing process for identifying, evaluating and managing the significant risks faced by the Group. It can only provide reasonable and not absolute assurance against material misstatement or loss. The directors are satisfied that the existing controls are adequate and effective with regard to the size of the Group and the stage of its development.

Communication with shareholders

The Board recognises that it is accountable to shareholders for the performance and activities of the Group. The Board attaches great importance to providing accurate information to the market and maintaining good relations with its shareholders. Market sensitive information is released through a defined internal procedure to all shareholders concurrently in compliance with stock-exchange rules. The Company’s ordinary shares are admitted to trading on AIM, a market operated by the LSE (Ticker: BZM). The annual report, news releases, presentations and other information on Bellzone Mining plc are available on the Group’s website (www.bellzone.com).