Reviewed: 2nd August 2024
CORPORATE GOVERNANCE STATEMENT
As Chairman, it remains my responsibility, working with my fellow Board members, to ensure that good standards of corporate governance are embraced throughout the Company. As a Board, we set clear expectations concerning our culture, values and behaviours. We firmly believe that by encouraging the right way of thinking and behaving across all our people, our corporate governance culture is reinforced, enabling us to conduct business sustainably and responsibly while delivering value for our shareholders.
It is the Board’s role to ensure the Group is managed for the long-term benefit of all shareholders, with effective and efficient decision-making. Corporate governance is an important part of that role, reducing risk and adding value to our business.
The Company has adopted the Quoted Companies Alliance Corporate Governance Code (the “QCA Code”). This statement sets out how the Company complies with and, where relevant, departs from, the 10 principles of the QCA Code.
Sean Wade
Non-Executive Chairman
31 July 2024
1. STRATEGY & BUSINESS MODEL
Katoro Gold’s commitment to portfolio diversification remains a cornerstone of its strategic vision. The Company will focus on advancing and developing its Tanzanian projects in a methodical fashion but will also continue to review other exploration and mining opportunities in the region and globally with a view to building a diversified project portfolio. The objective is two-fold: to mitigate country-specific risk and enhance the existing portfolio in sought after minerals. The majority of Katoro’s resources will be used to fund the continued development of the Company’s projects.
The Board sets the Company’s strategy and monitors its implementation through management and financial performance reviews. It also works to ensure that adequate resources are available to implement strategy in a timely manner. The Company has set out a strategy and business model to promote long-term value for shareholders and will update all shareholders on this in the annual reports for each year.
The Board identifies and evaluates key challenges and appropriately manages these challenges. Among others, challenges faced by Katoro Gold include raising sufficient funding for projects identified in the region, market competitiveness, the quality of mineral resources that are identified during exploration, and economic viability of projects. The Board meets on a regular basis to discuss the strategic direction of the Company and any significant deviation or change will be highlighted promptly should this occur.
2. UNDERSTANDING AND MEETING SHAREHOLDER NEEDS AND EXPECTATIONS
The Company is committed to listening to, and communicating openly with, its shareholders to ensure its strategy, business model and performance are clearly understood. The Company regards the Annual General Meeting (“AGM”) as a good opportunity to communicate directly with shareholders via an open question-and-answer session. The Board, led by the Non-Executive Chairman, is also responsible for understanding and meeting shareholder needs and expectations. Due to the size of the Company, there is no dedicated investor relations department and the Non-Executive Chairman is responsible for reviewing all communications received from investors and will determine the most appropriate response.
In addition, the Company’s progress on achieving its key targets is regularly communicated to investors via presentations and through its announcements to the market, which can be found linked here.
The Company also utilises other professional advisers such as the Company’s Nominated Advisor (“NOMAD”), Broker, Auditor, Investor and Media Relations Consultant and the Company Secretary to provide advice and recommendations on shareholder communication.
Contact details are provided on the Company’s website and within public documents should shareholders wish to communicate with the Company.
3. TAKING INTO ACCOUNT WIDER STAKEHOLDER & SOCIAL RESPONSIBILITIES AND THEIR IMPLICATIONS FOR LONG-TERM SUCCESS
The Board believes its main stakeholders are its investors, employees, suppliers, consultants and members of local communities where the Company undertakes development activities. The Board is committed to understanding the requirements and needs of its various stakeholders, and meetings are regularly held by management to discuss engagement and feedback. The Board, led by the Non-Executive Chairman, is also responsible for fostering and improving open communication and contact with relevant stakeholders of the Group. The business model identifies key resources and relationships on which the business relies by way of the Board’s relevant experience, strategic direction and regular assessment. The Board, led by the Non-Executive Chairman, obtains feedback from stakeholders via various channels, most notably stakeholder engagements and its AGM, and any required relevant actions are then formulated and implemented accordingly.
To contact the Company, stakeholders can request further information at info@katorogold.com.
4. EMBEDDING EFFECTIVE RISK MANAGEMENT
The Board regularly reviews the risks facing the business as well as the internal controls that have been implemented to address risks. In order to support its duties and responsibilities the Board implements control procedures that assess and manage risk and ensure robust financial and operational management within the Company. The principal risks that the Company is exposed to can be classified under the general headings of exploration risk, commodity risk, price risk, currency and political risk, strategic risk, operational risk, and funding and foreign investment risk. A more detail analysis of the principal risks can be found on pages 4 to 6 of the Company’s annual report linked here.
The audit committee is tasked with identifying, analysing and reporting on risk during the financial period. Nevertheless, it is also part of the everyday function of the Directors and is managed at Board level.
Accepting that no systems of control can provide absolute assurance against material misstatement or loss, the Directors believe that the established systems for internal control within the Company are appropriate to the business.
5. MAINTAINING A BALANCED AND WELL-FUNCTIONING BOARD
The Board acknowledge their responsibility for and recognise the importance of implementing and maintaining high standards of corporate governance. The Board is responsible for establishing and maintaining the system of internal controls. The Company subscribes to the values of good corporate governance at all levels and is committed to conduct business with discipline, integrity and social responsibility.
The Board
The Board currently comprises a Non-Executive Chairman, an Executive Director as Interim CEO and two Non-Executive Directors.
All Directors ensure that appropriate governance procedures are adhered to and there is a clear division of responsibilities at Board level to ensure a balance of power and authority so that no one individual has unfettered powers of decision making. Board and Audit Committee meetings have been taking place periodically and the Interim CEO manages the daily Company operations with Board meetings taking place on a regular basis.
The Board is responsible for effective control over the affairs of the Company, including strategic and policy decision-making, financial control, risk management, communication with stakeholders, internal controls and the asset management process.
The Directors are entitled, in consultation with the Chairman, to seek independent professional advice about the affairs of the Company, at the Company’s expense.
Due to the size of the Board, Nomination Committee matters are dealt with by the Board as a whole. The Board is responsible for considering and approving appointments to the Board. It is also responsible for keeping the structure, size and composition of the Board under regular review and for making recommendations to the Board with regard to any changes necessary, as well as succession planning, taking into account the skills and expertise that will be needed on the Board in the future.
Audit and Risk Committee
The Audit and Risk Committee consists of Tinus Maree and Sean Wade, with Tinus Maree as Chairman. The Audit and Risk Committee has set out its roles and responsibilities within its charter to ensure it is aligned to good financial governance principles.
These include:
- the establishment of an Audit and Risk Committee to guide the audit approach, as well as its modus operandi and the rules that govern the audit relationship;
- assessing the processes relating to and the results emanating from the Group’s risk and control environment;
- monitoring the integrity of the Group’s integrated reporting and all factors and risks that may impact on reporting;
- annually reviewing the expertise, appropriateness and experience of the finance function;
- annually nominating the external auditors for appointment by the shareholders;
- reviewing developments in governance and best practice;
- fostering and improving open communication and contact with relevant stakeholders of the Group; and
- assessing the external auditor’s independence and determining their remuneration.
The Audit and Risk Committee further sets the principles for recommending the external auditors for non-audit services and is expected to meet twice during the year to, inter alia, review the published financial information. The terms of reference for the Audit and Risk Committee are as follows:
The Audit and Risk committee has responsibility for, amongst other things, the monitoring of the financial integrity of the financial statements of the Company and its group, reviewing the effectiveness of the Group’s internal control and risk management systems, and overseeing the process for managing risks across the Group. It places particular focus on compliance with ongoing legal requirements and accounting standards as well as on ensuring that an effective system of internal financial controls is maintained. More generally, this Committee’s duties include financial and regulatory reporting, internal controls, internal audit, external audit, risk management and reporting responsibilities.
The ultimate responsibility for reviewing and approving the annual report and accounts and the half-yearly reports, remains with the Board of Directors as a whole.
Remuneration Committee
The members of the Remuneration Committee are Sean Wade and Louis Scheepers and is chaired by Sean Wade.
The Remuneration Committee has responsibility for the determination of specific remuneration packages for the Company’s Executive Director and any applicable senior executives of the Company. More generally, its responsibilities include determining and monitoring policy on and setting levels of remuneration, contracts of employment, early termination, performance-related pay, pension arrangements, reporting and disclosure, share schemes and remuneration consultants.
The Remuneration Committee is empowered by the Board to set short-, medium- and long-term remuneration for the Executive Directors. More generally, the committee is responsible for the assessment and approval of a Board remuneration strategy for the Group.
The Remuneration Committee met once during the current year as there was no need to review its strategy.
6. HAVING APPROPRIATE EXPERIENCE, SKILLS AND CAPABILITIES ON THE BOARD
The Board has a diverse range of skills, experience and personal qualities that help deliver the strategy of the Company. The Company will ensure that, between them, the Directors have the necessary up-to-date experience, skills and capabilities to deliver the Company’s strategy and targets. The Directors are members of regulated professional bodies (e.g., lawyers, chartered accountants, geologists, etc.) and must comply with their respective bodies’ continued professional development requirements. Each Director’s biographical details, along with a description of their role and experience, can be found on the Company’s website here.
7. EVALUATING BOARD PERFORMANCE
Given the Company’s current size, the Board has not considered it necessary to undertake an assessment of the Board performance and effectiveness.
8. ETHICAL VALUES & BEHAVIOURS
The Company operates a corporate culture that is based on ethical values and behaviours. It does maintain a quality system appropriate to the standards required for a Company of its size. The Board communicates regularly with staff through meetings and messages. The culture is consistent with the company’s objectives, strategy and business model per the strategic report by way of regular assessment and strategic direction by the Board.
The Company also has a Corporate Social Responsibility Policy, details of which can be found on page 18 within the Company’s annual report.
9. MAINTAINING GOVERNANCE STRUCTURES AND PROCESSES
The Board
The Board sets the direction for the Company through a formal schedule of matters reserved for its decision. The Non-Executive Chairman in collaboration with the Interim CEO, implements the strategy for the Company and regularly reports to the Board on progress as well as continually engaging with the Company’s shareholders and stakeholders. The Board has a schedule of matters reserved for its review and approval, including Group strategy, approval of major capital expenditure projects, approval of the annual report and interim results, annual budgets, dividend policy and Board structure. It monitors the exposure to key business risks and reviews the strategic direction of all trading subsidiaries, their annual budgets, their performance in relation to those budgets and their capital expenditure. The Board delegates day-to-day responsibility for managing the business to the Non-Executive Chairman and the senior management team.
Committees
The roles and responsibilities of the Group’s committees have been explained in Principle 5.
10. COMMUNICATING WITH SHAREHOLDERS AND OTHER RELEVANT STAKEHOLDERS
Under AIM rule 26 the Company already publishes historical annual reports, notices of meetings and other publications which can be found here.
The Board has not published Audit Committee or Remuneration Committee reports in the Company’s latest annual report and accounts. The Board feels that this is appropriate given the size and stage of development of the Company.
In regard to a general meeting of the Company, the results of the meeting are released through a regulatory news service and a copy of the announcement is posted on the Company’s website once the meeting has concluded. If it became relevant an explanation of actions where a significant proportion of votes (e.g. 20% of independent votes) is cast against a resolution would be provided.
Relations with Shareholders
The Company values the views of its shareholders and recognises their interest in the Group’s strategy and performance. The Annual General Meeting will be used to communicate with private investors, and they are encouraged to participate. The Directors will be available to answer questions. Separate resolutions will be proposed on each issue so that they can be given proper consideration and there will be a resolution to approve the annual report and accounts
Bribery Act 2010
The Government of the United Kingdom has issued guidelines setting out appropriate procedures for companies to follow to ensure they are compliant with the UK Bribery Act 2010. The Company has conducted a risk review into its operational procedures to consider the impact of the Bribery Act 2010 and has drafted and implemented an anti-bribery policy as adopted by the Board.