Governance Policy
The Group’s overriding corporate objective is to build a successful commercial enterprise. In this the board regards an effective governance structure to be a useful tool rather than being an objective in its own right.
Governance starts with the board where we believe competence and integrity are the key attributes.
Our approach to governance
We pride ourselves on being a low cost operator, as evidenced by the board taking up to 75% pay cuts for more than four years. We have adopted this same value for money approach to governance.
In recent times and largely as the result of limited funding and the desire to deploy as much of our available cash as possible in protecting and developing our assets our adherence to the highest accepted standards of corporate governance has been patchy.
As we move into the next phase of the Group’s development with significantly more funding expected we are looking to improve our governance performance, however, the on-going reality is that:
- we are active in the oil & gas sector and soon plan to be active in the mining sector
- we are focused on Kazakhstan but would look at other territories
- we have a controlling shareholder group, who also hold senior management roles
- we have completed a series of successful related party transactions and expect to do more
- we are listed on AIM with its minimal liquidity and lower levels of regulation than other markets
Governance starts with the board
We fully accept that good governance goes hand in hand with a successful company, but what is good governance?
We believe it essentially boils down to having a board that is competent, trustworthy and motivated to act in the interests of all shareholders.
QCA Code
Under the prevailing regulations we are required to document how we comply with one of the two governance regimes in operation. In common with the vast majority of AIM quoted companies the Group has elected to follow the QCA governance code and below we set out how we comply and how and why, where appropriate, we do not”.
Overall responsibility over the Group’s corporate governance, risk management, market disclosure and related obligations rests with the Board.
Share Dealing Policy
The Group has adopted and operates a share dealing code for Directors and employees in accordance with the AIM Rules.
Internal Controls
The Board acknowledges responsibility for maintaining appropriate internal control systems and procedures to safeguard the shareholders’ investments and the assets, employees and the business of the Group. The Board also intends to periodically review the Group’s financial controls and operating procedures.
Internal Audit
The Board does not consider it appropriate for the current size of the Group to establish an internal audit function. However, this will be kept under review.
Bribery and Corruption
The Company is committed to acting ethically, fairly and with integrity in all its endeavours and compliance with legislation is monitored. The principal terms of the UK Bribery Act have been translated into Russian and circulated to our Kazakh based staff. Consideration of the Bribery Act is a standing item at board meetings.
The Company’s Culture
Our culture might best be described as one where we strive for commercial success while treating others fairly and with respect. Accordingly, in dealing with each of the Groups principal stakeholders, we encourage our staff to operate in an honest and respectful manner. We also believe in getting proper value for money spent and believe this goes hand in hand with being a low-cost operator.
Kazakhstan plays an important part in the Group’s culture. It is where we operate; where almost all staff are based; it is the nationality of most staff and most of its shareholders.
The Group is committed to promoting a culture based on ethical values and behaviours across the business. Policies are in place covering key matters such as equality, protection of sensitive information, conflicts of interest, whistleblowing and health and safety as well as environmental concerns.
Board Committees
The board has three committees, the audit committee, the remuneration committee and the governance committee. However, as the board currently includes only one non-executive director, who is not deemed independent, the operation of the board committees has been suspended until further appointments to the board are made. In the meantime the full board will undertake the work of the committees.
Governance Committee
The Governance Committee comprises Clive Carver, Aibek Oraziman with Clive Carver acting as chairman. The committee intends to meet at least once a year to review the Group’s governance procedures compared to accepted industry best practice.
At the appropriate time the Board plans to include a formal risk register including all the principal operational and non-operational risks to the business to be considered by the Governance Committee.
Audit Committee
The Audit Committee, which comprises Clive Carver and Aibek Oraziman, with Clive Carver being the acting chairman, determines and examines any matters relating to the financial affairs of the Group including the terms of engagement of the Group’s auditors and, in consultation with the auditors, the scope of the audit.
The Audit Committee is responsible for monitoring the integrity of the Company’s financial statements, reviewing significant financial reporting issues, reviewing the effectiveness of the Group’s internal control and risk management systems.
Remuneration Committee
The Remuneration Committee comprises Aibek Oraziman and Clive Carver and is chaired by Aibek Oraziman.
Remuneration Policy
The Group’s and the Company’s policy is to provide remuneration packages that will attract, retain and motivate its executive Directors and senior management. This consists of a basic salary, ancillary benefits and other performance-related remuneration appropriate to their individual responsibilities and having regard to the remuneration levels of comparable posts.
The Remuneration Committee determines the contract term, basic salary, and other remuneration for the members of the Board and the senior management team.
Board Composition, Skills and Capabilities
The board comprise three executive directors and one non executive director
Directors’ Responsibilities
The Board consists of four directors, one of which is a non executive director. The Group holds at least four Board meetings each year, at which time financial and other reports are considered and, where appropriate, voted on.
Compliance With the QCA Code
Caspian Sunrise, in line with most AIM companies, elected to apply the rules of the Quoted Companies Alliance (QCA) Corporate Governance Code (“QCA Code”), which is based around 10 broad principles.
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Principle 1: Establish a strategy and business model which promotes long term value for shareholders
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Principle 2: Seek to understand and meet shareholder needs and expectations
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Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long term success
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Principle 4: Embed effective risk management, considering both opportunities and threats, throughout the organisation
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Principle 5: Maintain the board as a well-functioning, balanced team led by the chair
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Principle 6: Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities
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Principle 7: Evaluate board performance based on clear and relevant objectives, seeking continuous improvement
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Principle 8: Promote a corporate culture that is based on ethical values and behaviours
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Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision-making by the board
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Principle 10: Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders