Corporate Governance

The Directors acknowledge the importance of good corporate governance and apply the principles of the QCA Corporate Governance Code so far as is practicable and appropriate to a company of the size and nature of Europa.

This page was last updated 26 September 2018.

Chairman's statement on Corporate Governance

Simon Oddie is non-executive Chairman, Brian O'Cathain, William Ahlefeldt and Roderick Corrie are non-executive Directors. Roderick Corrie chairs the Audit Committee and Brian O'Cathain chairs the Remuneration Committee.

All of the four NED’s are considered by the Board to be independent.

Three of the Board’s Non-Executive Directors, Simon Oddie, Roderick Corrie and Brian O’Cathain hold share options. Whilst recognising that the granting of options to Non-Executive Directors is contrary to the principles of the QCA Corporate Governance Code, the Board views this to be part of a balanced remuneration package to attract and retain high quality candidates and considers the numbers of options to have no effect upon the independence of these Directors.

Two of the Board’s Non-Executive Directors, William Ahlefeldt and Roderick Corrie, have been members for more than the nine years recommended by QCA Corporate Governance Code. The Board believes them to be independent in character and free from any relationship that could affect their independent judgement. The appointment of Simon Oddie and Brian O’Cathain in January 2018 has compensated somewhat for their seniority and reduced the average tenure of the Board. Directors serving more than 6 years will be proposed for re-election at each AGM.

Members of the Board of Directors are listed here, including their relevant experience, skills and personal qualities. There is an appropriate breadth of experience covering the key aspects of the business including technical, operational, financial and international. The gender balance needs to be addressed and is under consideration. It is the responsibility of each director to keep skills up to date with the assistance of the Chairman who has a core responsibility in addressing the development needs of the Board as a whole with a view to enhancing its overall effectiveness.

NED’s are expected to devote such time as is necessary for the proper performance of their duties including attendance at up to eleven Board meetings per year (reducing to seven for 2019), the AGM, and Board committee meetings. The minimum numbers of meeting for committees are: Audit Committee two; Remuneration Committee one (though there was no Remuneration Committee meeting held in the period - the last meeting was held 8 June 2017); and Nomination Committee - one. Meetings held and attendance records of all directors for the period 1 August 2017 to 31 July 2018 are set out below:

Board Committees call on external advisers where this is deemed necessary. During 2018 this has been for advice on security only.

Board committees

The Audit Committee receives and reviews reports from management and the Company's auditors relating to the annual and interim accounts and the accounting and internal control systems of the Company. The Audit Committee have unrestricted access to the Company's external auditors. Roderick Corrie chairs, Simon Oddie, William Ahlefeldt and Brian O'Cathain are members.

The Remuneration Committee reviews the scale and structure of the Executive Directors' remuneration and the terms of their service contracts. The remuneration and terms and conditions of appointment of the non-executive Directors are set by the Board. Brian O'Cathain chairs, Roderick Corrie, Simon Oddie and William Ahlefeldt are members.

The Nominations Committee reviews the size, structure and composition of the Board and gives consideration to succession planning. The committee identifies and nominates candidates to fill Board vacancies for approval of the Board. Simon Oddie chairs, Brian O'Cathain, Roderick Corrie, William Ahlefeldt and Hugh Mackay are members.

The Nominations Committee convened in order to find a successor to Colin Bousfield who announced his intention to step down from the Board. In accordance with the terms of reference of the committee, Colin did not participate in the selection process and William Ahlefeldt chaired the committee until Simon Oddie was appointed.

Terms of reference and Matters Reserved for the Board are here

Board performance

In 2018 with two new directors in place, the Board undertook an effectiveness review utilising a PwC developed assessment tool. Each director fed back to the Chairman and results were assimilated and considered at the following Board meeting. This was the first formal review. In future reviews will take place annually, with third party facilitation of the process every third year.

Amongst the actions planned from the review was the decision to reduce the number of Board meetings in 2019, and a likely increase in the number of sub committee meetings.

Roles and responsibilities

The main internal advisory functions are that of Senior Independent Director and Company Secretary (shared with the Finance Director function), whose responsibilities are described below.

Chair - Simon Oddie

  • Runs the board and set its agenda.
  • Promotes the highest standards of corporate governance
  • Ensure that the members of the board receive accurate, timely and clear information, to promote the success of the group.
  • Ensure effective communication with shareholders
  • Takes the lead in identifying and meeting the development needs of individual directors, ensure that the performance of individuals and of the board as a whole and its committees is evaluated at least once a year.

Role of the CEO - Hugh Mackay

  • Developing group objectives and strategy
  • Execution of strategy following approval by, the board.
  • Identifying and executing licence acquisitions and disposals, joint venture opportunities, approving major work programmes.
  • Leading geographic diversification initiatives.
  • Identifying and executing new business opportunities outside the current core activities.
  • Managing the group’s risk profile, including the health and safety performance of the business, in line with the extent and categories of risk identified as acceptable by the board.

Role of the SID - Roderick Corrie

  • Works closely with the chairman, acting as a sounding board and providing support,
  • Acts as an intermediary for other directors as and when necessary.
  • Is available to shareholders and other non-executives to address any concerns or issues they feel have not been adequately dealt with through the usual channels of communication
  • Meets at least annually with the non-executives to review the chairman’s performance and carrying out succession planning for the chairman’s role.
  • Attends sufficient meetings with major shareholders to obtain a balanced understanding of their issues and concerns.

Role of the Company Secretary - Phil Greenhalgh

Given Europa’s size and desire to manage its resources effectively, the role of Company Secretary is performed by the Finance Director. The Board reviews this structure at least annually.

  • Distributes documents to the Board
  • Is available to the Audit, Remuneration and Nominations Committees as required
  • Keeps minutes of meetings
  • Updates Companies House records for the company and subsidiaries

Engagement with shareholders

The Company engages with shareholders by:

  • Publishing periodic newsletters
  • Emailing Regulatory News Service (RNS) announcements to its subscriber list
  • Replying to investor questions sent to mail@europaoil.com either directly or through St Brides Partners Limited
  • Proactive Investor presentations and interviews (made available on the website by links to youtube recordings)
  • Conducting sufficient meetings with major shareholders to obtain a balanced understanding of their issues and concerns
Shareholder liaison is the responsibility of the CEO and Chairman, with assistance from the Finance Director and the SID.

 

 

Systems to solicit and act on feedback from all stakeholder groups

The CEO provides a weekly report to the Board which includes a section on Stakeholder and Social Responsibility. This includes Stakeholder feedback from multiple sources.

Europa is a member of the UK Onshore Operator Group (UKOOG) and through this forum has regular meetings with the EA and HSE.

As part of the planning process at Holmwood, Europa ran a number of town hall meetings to help explain the proposed development.

 

Register of risks

The CFO has prepared a risk register for the group that identifies key operational and financial risks. All members of the board are provided with a copy of the register. The register is reviewed at least annually and is updated as and when necessary.

Within the scope of the annual audit, specific financial risks including foreign currency, interest rates, liquidity and credit are evaluated in detail,.

All members of staff and contractors are provided with a handbook which includes sections on share dealing, bribery, whistle-blowing. The handbook is updated and reissued regularly.

 

The Board intends to continuously review its Corporate Governance framework.