The Board of UK Oil & Gas Investments PLC (UKOG or the Company) is responsible for the direction and oversight of all our activities, within our holding company, subsidiary companies and where we have interests in special purpose vehicles (SPV’s) related to our investment activities. Our corporate governance is undertaken on behalf of our shareholders and is accountable to them, as owners.

UKOG is listed on AIM a market operated by the London Stock Exchange Plc (LSE) and as such is governed by specific LSE reporting guidelines, (AIM Rules for Companies). These rules can be found here

In addition to the overall guidelines for reporting set by the LSE, as a publicly listed oil and gas company, UKOG is required to abide by LSE’s specific mining, oil and gas industry reporting guidelines. These guidelines can be found here

These overall and specific industry guidelines set out requirements, rules interpretation and guidance relating to resource companies and form part of the AIM Rules for Companies and AIM Rules for Nominated Advisers (“Nomads”).

UKOG is required to comply and abide by the LSE’s rules and regulations. UKOG’s Nomad monitors and ensures our compliance with AIM Rules for Companies. In turn, UKOG reports to, and co-ordinates its activities with, its Nomad and has established an AIM rules compliance committee whose terms of reference are to ensure that UKOG operates in accordance with the relevant rules and to create a reporting framework for relevant information to be passed on to the Company’s Nomad.

As a company listed on AIM UKOG is not required to comply with the provisions of the Code but notwithstanding this the Directors recognise the importance of sound corporate governance and with that aim, UKOG has voluntarily adopted substantially all of the recommendations of the Quoted Companies Alliance Corporate Governance Code for Small and Mid-Size Quoted Companies (the QCA Code) as are appropriate to UKOG’s size at this time. To the extent that it is not compliant with the QCA Code it is intended that UKOG will become so as the Company and its business mature.

The Board of Directors comprises one Executive Chairman, one Finance Director and one Executive Director. The Board has established audit and remuneration committees with formally delegated duties and responsibilities. The Company also has an investment committee to consider new investments and monitor existing investments. The investment committee reports to the full board of the Company and the AIM Rules Compliance Committee as appropriate.

Role of the Board
UKOG’s Board of Directors has a responsibility to govern the Company rather than to manage it and in doing so act in the best interests of the Company as a whole. The Company is operated through its Board of Directors. The Board is responsible for formulating, reviewing and approving the Company's strategy, budgets and corporate actions and ensure that the necessary financial and other resources are made available to enable those objectives to be met.

Matters Reserved for the Board
Day to day management of the Company is devolved to the Executive Chairman and management team, who are charged with consulting the Board on all significant strategic, financial and operational matters including: decisions on strategy and risk management, approval of budgets, acquisitions and disposals, major capital expenditure, legal and insurance issues, board structure and the appointment of advisors. In some areas responsibility is delegated to committees of the Board within clearly defined terms of reference

Board of Directors
The UKOG Board of Directors currently comprises three Directors: the Executive Chairman, the Finance Director and the Executive Director.

The Directors are of the opinion that the Board membership represents a suitable balance and that the recommendations of the QCA Code have been implemented to an appropriate level at this stage of UKOG’s corporate development. The Board is however aware that it is not compliant with the QCA Guidelines in respect of having two independent non-executive Directors. It is the Board’s intention that, as soon as practicable, an independent non-executive director will be appointed to the Board. The Board, through the Executive Chairman & CEO and the Executive Directors, maintains regular contact with its advisers and public relations consultants in order to ensure that the Board develops an understanding of the views of major shareholders about the Company.

All Directors have access to the advice of the Company’s solicitors. Necessary information is supplied to the Directors on a timely basis to enable them to discharge their duties effectively. All Directors have access to independent professional advice, at the Company’s expense, as and when required.

Executive Chairman & CEO
Stephen Sanderson was appointed as the Chief Executive Officer of UKOG on 27 January 2015 and then to the role of Executive Chairman on 8 July 2015. Prior to that Stephen was engaged by UKOG to advise on the Company’s initial oil and gas assets upon their acquisition. The board considers that the combined role is in the interests of shareholders in order to utilise the proven leadership qualities and significant experience of Stephen Sanderson through a period of rapid expansion for the Company and to ensure the on-going commercial success of the Company. Furthermore, Stephen Sanderson has been with the Company since the acquisition of its first oil and gas assets and has therefore provided stability and continuity through his detailed understanding of the UKOG’s operations and the markets in which it operates. Over the coming months the board will evaluate the orderly separation of the roles of Chairman and Chief Executive Officer. Internal and external candidates will be evaluated for the role of Chief Executive Officer whilst at all times aiming to ensure appropriate continuity and continued focus on performance.

Description of Roles
The Executive Chairman is the leading representative of the Company, presenting the Company’s aims and policies to external interested parties. His responsibilities include taking the Chair at Board Meetings and General Meetings with shareholders, where he is responsible for ensuring the appropriate supply of information. He is also responsible for leading the development and execution of the Company’s long-term strategy, overseeing matters pertaining to the running of the Company and ensuring that the Company meets all legal requirements and corporate responsibilities.

Board Meetings
The Board meets at least once a month and as required throughout the year. 

Board Committees
The Board has established the following committees, each of which has its own terms of reference:

Audit Committee
The Audit Committee comprises Allen D Howard and Kiran Morzaria and is chaired by Allen D Howard. The Company intends that a non-executive director will be appointed to the committee as soon as a suitable candidate has been identified. The Audit Committee is expected to meet at least twice a year and otherwise as required. Currently two directors are required to form a quorum. It has responsibility for ensuring that the financial performance of the Company is properly reported on and reviewed, and its role includes monitoring the integrity of the financial statements of the Company (including annual and interim accounts and results announcements), reviewing internal control and risk management systems, reviewing any changes to accounting policies, reviewing and monitoring the extent of the non-audit services undertaken by external auditors and advising on the appointment of external auditors. The Audit Committee has unrestricted access to the Company’s external auditors.

Remuneration Committee
The Remuneration Committee comprises Allen D Howard and Kiran Morzaria and is chaired by Allen D Howard. An additional non-executive director will be appointed to the committee as soon as a suitable candidate has been identified. It is expected to meet not less than twice a year and at such other times as required. The Remuneration Committee has responsibility for determining, within the agreed terms of reference, the Company’s policy on the remuneration packages of the Company’s chief executive, the chairman, the executive and non-executive directors, the Company secretary and other senior executives. The Remuneration Committee also has responsibility for: (i) recommending to the Board a compensation policy for directors and executives and monitoring its implementation; (ii) approving and recommending to the Board the total individual remuneration package of the chairman, each executive and non executive director and the chief executive officer (including bonuses, incentive payments and share options or other share awards); and (iii) approving and recommending to the Board the total individual remuneration package of the Company Secretary and all other senior executives (including bonuses, incentive payments and share options or other share awards), in each case within the terms of the Company’s remuneration policy and in consultation with the chairman of the Board and/or the chief executive officer. No Director or manager may be involved in any discussions as to their own remuneration.

Investment Committee
The Investment Committee comprises Allen D Howard (as Chairman) and Kiran Morzaria. The Investment Committee is responsible for assessing, negotiating, overseeing due diligence on, and monitoring of, investments (noting in particular the requirement to ensure sufficient working capital remains in the Company following any investment).

The Investment Committee meets monthly to consider new investment propositions and to discuss the performance of the Company’s investments ensuring that each investment is contacted at least once a month to allow the Investment Committee to fully understand the performance of each investment. The Investment Committee ensures that wherever practicable and appropriate each investment that the Company makes agrees to adhere to the Company’s investment monitoring code which sets out amongst other matters:

  • the legal and regulatory obligations with which the investment must comply as a consequence of the Company’s public status such obligations including restrictions on dealing in the Company’s shares
  • ensuring that the investment provides the Company with the information needed by the Company to make such disclosures as are required under the AIM Rules
  • the procedures and policies with which the investment must comply regarding communication of material information regarding the investment and a restriction on the publication of any price sensitive information without the prior approval of the Company
  • the monthly reporting requirements of the Company in relation to the investment including, where appropriate, management accounts; annual budgets and forecasts

The Investment Committee reports at least monthly to the AIM Rules Compliance Committee on the performance of the investments in order to allow the AIM Rules Compliance Committee to consider the impact of the investments on the Company’s requirements under the AIM Rules particularly with regards to disclosure requirements.

Following satisfactory due diligence and negotiations the Investment Committee shall make a recommendation to the board for the final investment decision in relation to any new investment. Any new investment shall require majority approval of the investment committee before it is referred to the full board of the Company for approval.

Ethical Decision Making
Confidentiality: in accordance with legal requirements and agreed ethical standards, Directors and all staff have agreed to maintain the confidentiality of Company information that is not in the public domain, except where disclosure is authorised or legally mandated.

Bribery: in accordance with the provisions of the Bribery Act, all Directors and staff acknowledge that it is an offence under the act to engage in any form of bribery. The Company has an anti bribery policy in force.

Insurance
The Company maintains insurance in respect of its Directors and officers against liabilities in relation to the Company.

Treasury Policy
The Company finances its operations through equity and debt. It holds its cash as a liquid resource to fund its ongoing financial outgoings and obligations. Decisions regarding financial management are approved by the Board.

Takeover Legislation
The Company is subject to the UK City Code on Takeovers and Mergers.

Securities Trading
The Board has adopted the Share Dealing Code contained within the AIM Rules that applies to Directors, senior management and any employee who is in possession of “inside information”. All such persons are prohibited from trading in the Company’s securities if they are in possession of “inside information”.

Subject to this condition and trading prohibitions applying to “close periods” (usually two months prior to the publication of the interim and final audited accounts), trading can occur provided the relevant individual has received the appropriate prescribed clearance. All Directors and staff are required to advise the Executive Chairman of their intention to undertake a transaction in the Company’s shares. Such a transaction will be precluded if the Director or employee is considered to be in possession of unpublished price sensitive information.

The Company will ensure, in accordance with and subject to the provisions of Rule 21 of the AIM Rules, that the Directors and applicable employees shall not deal in any of the ordinary shares during a close period (as defined in the AIM Rules) and will take all reasonable steps to ensure compliance by the Directors and applicable employees with this Rule 21.

Relations with Shareholders and Stakeholders
The Board recognises that it is accountable to shareholders for the performance and activities of the Company and to this end is committed to providing effective communication with the shareholders of the Company.

The Board also recognises that as an oil and gas company, it has responsibility to engage openly, transparently and effectively with community stakeholders, local government and national government agencies.

Significant developments are disseminated through stock exchange announcements and regular updates of the Company website where descriptions of the Company’s projects are available and updated regularly. In addition, copies of press comments, stockbroker notes, video updates and presentations are available. On the website, shareholders may sign up to receive news releases directly by email.

The Board views the Annual General Meeting as an important forum for communication between the Company and its shareholders, and encourages shareholders to express their views on the Company’s business activities and performance.