SDX Energy adheres to the highest standards in its corporate governance processes and policies. We operate in the best interest of our shareholders and in compliance with legal and regulatory requirements. This includes evolving our governance practices in accordance with current expectations and guidelines for corporate governance.
The board of directors (the “Board”) of SDX Energy PLC (the “Corporation”) recognizes that good corporate governance is of fundamental importance to the success of the Corporation. The Corporation’s governance practices are the responsibility of the board. This Statement of Corporate Governance Practices sets out the board’s assessment of the Corporation’s governance practices in accordance with National Instrument 58-101 – Disclosure of Corporate Governance Practices (“NI 58-101”) and National Policy 58-201 – Corporate Governance Guidelines (“NP 58-201”). The Corporation’s governance practices are generally consistent with the practices and guidelines set out in NI 58-101 and NP 58-201.
The Board retains overall accountability for the running of the Company and is accountable for making decisions that could have a material impact on the business. It discharges this responsibility through the executive management team, which is responsible for the day-to-day management of the operations of the Company.
The Board gives strategic direction to the Company. The Board retains full and effective control over the Company and monitors executive management in implementing plans, policies, tactics, procedures and strategies. The ultimate responsibility for the Company rests with the Board. The Board retains effective control through a well-developed governance structure of Board subcommittees and suitable delegation of authority. There is a policy evidencing clear balance of power and authority to ensure that no one director has unfettered powers of decision making.
The Board recognises that it is responsible for implementing practices of good governance and that companies no longer act independently from the societies and the environment in which they operate. The Board is committed to high standards of corporate governance in order to facilitate an environment in which the Company’s assets are safeguarded and the interests of all stakeholders and shareholders are protected.
The Board consists of one executive director (effective from 31 May 2019) and four non-executive directors who are considered by the Board to be independent. The Chairman is responsible for leadership of the Board and for the efficient conduct of the Board’s function. The Chairman is expected to encourage the effective contribution of all Directors and promote constructive and respectful relations between Directors and senior management. The Directors believe that they have sufficient experience in implementing accounting systems and controls, which provide a reasonable basis for them to make proper assessments as to the financial position and prospects of the Company.
The Company has established an Audit Committee, which meets regularly, and a Corporate Governance Committee, a Compensation Committee and a Reserves Committee, each of which is convened as necessary. The mandate and composition of each committee are outlined below.
The Board considers that the Company is not currently of sufficient size to justify the formation of a nomination committee and as at this stage of the Company’s development the Directors consider it is appropriate for the Board to retain responsibility for nominations to the Board.
Directorships held by directors of the Corporation in other reporting issuers are set forth below:
Director Directorships held
Michael Doyle Richmond Road Capital Corp.
Colson Capital Corp.
The board of directors is responsible for the orientation and education of new members of the board of directors and all new directors are provided with copies of the Corporation’s board and committee mandates and policies, the Corporation’s by-laws, documents from recent board meetings and other reference materials relating to the duties and obligations of directors, and the business and operations of the Corporation. New directors are also provided with opportunities for meetings and discussions with senior management and other directors. Prior to joining the board, each new director meets with the chief executive officer of the Corporation. The CEO is responsible for outlining the business and prospects of the Corporation, both positive and negative, with a view to ensuring that all new directors are properly informed before taking up their duties on the board. Each new director is also given the opportunity to meet with the auditors and counsel to the Corporation. As part of the annual board of directors’ assessment process, the board determines whether any additional education and training is required for its members.
As part of their overall responsibility to good stewardship, the directors encourage and promote a culture of ethical business conduct through communication and oversight. In addition, the Corporation has adopted a code of conduct which addresses the Corporation’s continuing commitment to integrity and ethical behaviour. The code of conduct establishes procedures that allow directors, officers, and employees of the Corporation to submit their concerns to the chief executive officer or the chairman of the board regarding questionable ethical, moral, accounting or auditing matters, on a confidential basis and without fear of retaliation. To the Corporation’s knowledge, there have been no departures from this code of conduct that would necessitate the filing of a material change report. A copy of the code of conduct is available to review at the head office of the Corporation during business hours.
The board of directors as a whole is responsible for identifying suitable candidates to be recommended for election to the board by the shareholders of the Corporation, with the goal of ensuring that the board consists of an appropriate number of directors who collectively possess the competencies identified as being appropriate to the effectiveness of the board as a whole.
The Compensation Committee is responsible for reviewing the Corporation’s overall compensation strategy, and is responsible for reviewing and recommending for approval the salaries and compensation of the Corporation’s executive officers. The Compensation Committee also reviews the compensation of the outside directors on an annual basis, taking into account such matters as time commitment, responsibility, and compensation provided by comparable organizations.
The Corporation’s board of directors has three committees, the Audit Committee, the Compensation Committee, and the Reserves Committee.
The Company has adopted a charter for the Audit Committee which establishes the Audit Committee’s purpose and responsibilities, establishment and composition, authority, duties and responsibilities. The Audit Committee is comprised of Mr Timothy Linacre (Chairman), Mr Michael Doyle and Mr Michael Raynes. The Audit Committee’s overall goal is to ensure that the Company adopts and follows a policy of proper and timely disclosure of material financial information and reviews all material matters affecting the risks and financial position of the Company. The Audit Committee, inter alia, meets with the Company’s external auditor and its senior financial management to review the annual and interim financial statements of the Company, oversees the Company’s accounting and financial reporting processes, the Company’s internal accounting controls and the resolution of issues identified by the Company’s auditors.
The Company has adopted terms of reference for the Compensation Committee which establishes the Compensation Committee’s purpose and responsibilities, establishment and composition, authority, duties and responsibilities. The Compensation Committee is comprised of Mr Michael Raynes (Chairman), Mr David Mitchell and Mr Timothy Linacre. It assumes general responsibility for assisting the Board in respect of compensation policies for the Company and to review and recommend compensation strategies for the Company and proposals relating to compensation for the Company’s officers, directors and consultants and to assess the performance of the officers of the Company in fulfilling their responsibilities and meeting corporate objectives. It has the responsibility for, inter alia, administering share and cash incentive plans and programmes for Directors and employees, and for approving (or making recommendations to the Board on) share and cash awards for Directors and employees.
The Company has adopted a mandate for the Reserves Committee which establishes the Reserves Committee’s purpose and responsibilities, establishment and composition, authority, duties and responsibilities. The purpose of the Reserves Committee is to ensure the Company complies with the requirements contained in Canada’s National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities. It assumes responsibility for the annual audit of the Company’s reserves, including the appointment of a qualified competent person. In addition, the Reserves Committee is responsible for properly overseeing the development, implementation and monitoring of the Company’s Health, Safety and Environment (“HS&E”) policies. Primary responsibility for the Company’s HS&E programme is vested with management. The Reserves Committee is comprised of Mr David Mitchell (Chairman) and Mr Michael Doyle.
The Compensation Committee is responsible for developing an annual assessment of the overall performance of the board and its committees. The objective of this review is to contribute to a process of continuous improvement in the board’s execution of its responsibilities. To date, the Compensation Committee and the board have not put into place a formal process for assessing the effectiveness of the board as a whole, its committees, or individual directors, but will consider implementing one in the future should circumstances warrant. Based on the Corporation’s size, stage of development, and the number of individuals on the board of directors, the Compensation Committee and the board consider a formal assessment process to be inappropriate at this time. The Compensation Committee and the board plan to continue evaluating the board’s effectiveness on an ad hoc basis.
The Company complies with Canadian corporate governance standards, practices and procedures appropriate for a reporting issuer in Alberta, Canada and other Canadian provinces.
The Company is subject, among other laws and regulations, to instruments published by relevant Canadian securities regulators. One such instrument, Canadian National Instrument 58-101 – Disclosure of Corporate Governance Practices (“NI 58-101”) prescribes certain disclosure by the Company of its corporate governance practices and Canadian National Policy 58-201 – Corporate Governance Guidelines (“NP 58-201”) provides non-prescriptive guidelines on corporate governance practices for reporting issuers such as the Company. This section sets out the Company’s approach to corporate governance and addresses the Company’s compliance with NI 58-101 and NP 58-201.
The Company will comply with Canadian corporate governance requirements, until such time as it becomes a Designated Foreign Issuer, at which time it will comply (or explain non-compliance) with the Quoted Companies Alliance (“QCA”) Corporate Governance guidelines.
The Company has adopted a Code of Business Conduct and Ethics Policy (the “Code”) applicable to all Directors, officers, employees and consultants of the Company which highlights key issues and establishes procedures that allow Directors, officers and employees of the Company to submit their concerns. A copy of the Code may be obtained on the Company’s website www.sdxenergy.com.
Last updated 28 May 2019.