Reviewed: 25th September 2024
The Board is committed to maintaining high standards of corporate governance. It complies with the Quoted Companies Alliance Corporate Governance Code provisions for small and mid-size quoted companies (“QCA Code”).
While building a strong governance framework, we also try to ensure that we take a proportionate approach and that our processes remain fit for purpose and embedded within the culture of our organisation. We continue to evolve our approach and make ongoing improvements as part of building a successful and sustainable company.
The Board
The Board comprises of a Non-Executive Chairman, one Non-Executive Director and two Executive Directors.
Board Members
| Board Member | Board Title | Audit Committee Title | Remuneration Committee Title |
| Andrew Suckling | Non-Executive Chairman | Chairman | Chairman |
| Adrian Fairbourn | Non-Executive Director | Member | Member |
| Kiran Morzaria | Chief Executive Officer | ||
| Donald Strang | Finance Director |
Learn more about the board members
The Board is responsible for formulating, reviewing and approving the Company’s strategy, financial activities and operating performance. Day-to-day management is devolved to the executive directors, who are charged with consulting the Board on all significant financial and operational matters. The Board retains ultimate accountability for governance and is responsible for monitoring the activities of the executive team.
The roles of Chairman and Chief Executive Officer are split per best practice. The Chairman has the responsibility of ensuring that the Board discharges its responsibilities. The Chairman is responsible for the leadership and effective working of the Board, for setting the Board agenda, and ensuring that Directors receive accurate, timely and clear information. No one individual has unfettered powers of decision.
The two Executive Directors are comprised of a Chief Executive Officer (“CEO”) and Finance Director. The CEO has the overall responsibility for creating, planning, implementing, and integrating the company’s strategic direction. This includes responsibility for all components and departments of a business. The CEO ensures that the organisation’s leadership maintains a constant awareness of both the external and internal competitive landscape, opportunities for expansion, customer base, markets, new industry developments and standards.
The non-executive directors are not considered independent under the Financial Reporting Council’s Corporate Governance Code (April 2016) (“FRC Code”) as they both have remuneration liked to the performance of the Company. However, the board considers that both non-executive are independent of management under all other measures and can exercise independence of judgement.
The Committees
Audit Committee
The audit committee consists of two non-executive members of the board and meets up to twice a year.
The principal duties and responsibilities of the Audit Committee include:
- Overseeing the Group’s financial reporting disclosure process; this includes the choice of appropriate accounting policies.
- Monitor the Group’s internal financial controls and assess their adequacy
- Review key estimates, judgements and assumptions applied by management in preparing published financial statements.
- Assess the auditor’s independence and objectivity annually
- Make recommendations concerning the appointment, re-appointment and removal of the company’s external auditor.
Remuneration committee
The remuneration committee consists of two non-executive members of the board and meets up to twice a year.
The principal duties and responsibilities of the Remuneration Committee include:
- Setting the remuneration policy for all Executive Directors.
- Recommending and monitoring the level and structure of remuneration for senior management
- Approving the design of, and determining targets for, performance-related pay schemes operated by the company and approve the total annual payments made under such schemes
- Reviewing the design of all share incentive plans for approval by the board and shareholders
- None of the Committee members has any personal financial interest (other than as shareholders and option holders), conflicts of interest arising from cross-directorships or day-to-day involvement in the business’s running. No director plays a part in any financial decision about his or her own remuneration.
Principle and Approach of the Board
Cadence is committed to achieve and maintain high standards of governance. As such, the Board has chosen to adopt the Quoted Companies Alliance Corporate Governance Code for Small and Mid-Size Quoted Companies 2018 (“the QCA Code”). Detailed below is how the Board applies the 10 principles of Corporate Governance, which form part of the QCA code.
| Principle | Application | Compliance | ||||||||
| Establish a strategy and business model which promote long-term value for shareholders | The board must be able to express a shared view of the company’s purpose, business model and strategy. It should go beyond the simple description of products and corporate structures and set out how the company intends to deliver shareholder value in the medium to long-term.
It should demonstrate that the delivery of long-term growth is underpinned by a clear set of values aimed at protecting the company from unnecessary risk and securing its long-term future. |
Our strategy is to identify undervalued assets with irreplaceable strategic advantages that will deliver capital growth to our shareholders. We invest in these assets and where required help deliver capital growth. To meet long-term demand, we believe the metals and mining sectors require focused investment capital from knowledgeable investors that understand the substantial risk of the mineral resource sector and how to mitigate these risks to maximise potential returns for our investors.
A more detailed description of its Strategy and Business Model on the About Page HERE on this website. Please refer to page 1 of the Annual Report and Accounts for the year ended 31 December 2023 and the Corporate Governance section of the website HERE for further details on the principal risks and uncertainties which the Company faces. Details on the principal risks and uncertainties which the Company faces are specified on pages 15 to 16 of the Annual Report and Accounts for the year ended 31 December 2023. The Company seeks to share this vision and details of the implementation of its strategy through internal dialogue with employees as well as external communications by way of public announcements and dissemination of information through this website and the annual report and accounts
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| Seek to understand and meet shareholder needs and expectations | Directors must develop a good understanding of the needs and expectations of all elements of the company’s shareholder base.
The board must manage shareholders’ expectations and should seek to understand the motivations behind shareholder voting decisions.
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The Board is committed to maintaining an open dialogue with shareholders. Communication with The Board is committed to maintaining an open dialogue with shareholders.
Communication with shareholders is coordinated by the CEO. Cadence encourages two-way communication with institutional and private investors. The Company’s major shareholders maintain an active dialogue and ensure that their views are communicated fully to the Board. Where voting decisions are not in line with the Company’s expectations the Board will engage with those shareholders to understand and address any issues. The Company Secretary is the main point of contact for such matters. The Company seeks out appropriate platforms to communicate to a broad audience its current activities, strategic goals and broad view of the sector and other related issues. This includes but is not limited to media interviews, website videos in -person investor presentations and written content. Communication to all stakeholders is the direct responsibility of the Senior Management team. Managers work directly with professionals to ensure all inquiries (through established channels for this specific purpose such as email or phone) are addressed in a timely matter. Managers also ensure that the Company communicates with clarity on its proprietary internet platforms. The Board routinely reviews the Company communication policy and programmes to ensure the quality communication with all stakeholders. The Board believes that the Annual Report and Accounts, and the Interim Report published at the half-year which can be found HERE, play an important part in presenting all shareholders with an assessment of the Group’s position and prospects. All reports and press releases are published under the “Investors” tab of the Group’s website. |
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| Take into account wider stakeholder and social responsibilities and their implications for long-term success | Long-term success relies upon good relations with a range of different stakeholder groups both internal (workforce) and external (suppliers, customers, regulators and others). The board needs to identify the company’s stakeholders and understand their needs, interests and expectations.
Where matters that relate to the company’s impact on society, the communities within which it operates, or the environment have the potential to affect the company’s ability to deliver shareholder value over the medium to long-term, then those matters must be integrated into the company’s strategy and business model. Feedback is an essential part of all control mechanisms. Systems need to be in place to solicit, consider and act on feedback from all stakeholder groups. |
The Board recognises its prime responsibility under UK corporate law is to promote the success of the Company for the benefit of its members as a whole. The Board also understands that it has a responsibility towards employees, partners, customers, suppliers and to the community and environment it operates in as a whole.
Communication with and feedback from these various groups is achieved in a variety of ways. The Executive Directors hold investor roadshows and webcasts on a regular basis, at which feedback from shareholders is sought. Regular dialogue is maintained with employees through regular discussion and updates given by the Executive Directors. The nature of the Cadence’s business as an investment company means that although it has no direct effect on the working environments and communities of the companies it invests in, it nonetheless liaises with the management of its investee companies to understand their approach to stakeholder engagement and their policies, which will form part of its investment criteria. |
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| Embed effective risk management, considering both opportunities and threats, throughout the organisation | The board needs to ensure that the company’s risk management framework identifies and addresses all relevant risks in order to execute and deliver strategy; companies need to consider their extended business, including the company’s supply chain, from key suppliers to end-customer.
Setting strategy includes determining the extent of exposure to the identified risks that the company is able to bear and willing to take (risk tolerance and risk appetite).
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The Board has an established Audit Committee, a summary of it roles a responsibilities is available on the corporate governance webpage HERE which is set out above.
The Committee is specifically charged with ensuring that Cadence as a whole has the appropriate policies and processes in place to identify the risks which the Company is exposed to and to proactively mitigate those risks as appropriate. The Company maintains a register of risks and publishes an overview of significant risks and uncertainties in its Annual Report. Please refer to page 14 of the Annual Report and Accounts for the year ended 31 December 2023 for further details on the principal risks and uncertainties which the Company faces. The Company receives regular feedback from its external auditors on the state of its internal controls. The Board maintains a register of risks and publishes an annual summary of the significant risks and uncertainties in the Annual Report. |
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| Maintain the board as a well-functioning, balanced team led by the chair | The board members have a collective responsibility and legal obligation to promote the interests of the company and are collectively responsible for defining corporate governance arrangements. Ultimate responsibility for the quality of, and approach to, corporate governance lies with the chair of the board. The board (and any committees) should be provided with high-quality information in a timely manner to facilitate proper assessment of the matters requiring a decision or insight.
The board should have an appropriate balance between executive and non-executive directors and should have at least two independent non-executive directors. Independence is a board judgement. The board should be supported by committees (e.g. audit, remuneration, nomination) that have the necessary skills and knowledge to discharge their duties and responsibilities effectively. Directors must commit the time necessary to fulfil their roles.
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The Board is comprised of Andrew Suckling the Non-Executive Chairman, a Non-Executive Director and two Executive Directors. The CEO, Kiran Morzaria, is engaged to work a minimum of a 27-hour week and is an employee of the Company. The Finance Director Donald Strang, is engaged to work a minimum of a 27-hour week.
The board deemed that given the stage and development of the Company, it would be more cost efficient to employee a full-time accountant which along with the finance director ensure that Company’s financial systems are robust, compliant, and support current activities and future growth. The service agreements of the Non-Executive Directors anticipate that the Non-Executive Chairman should spend 5 working days per month and the Non-Executive Director 3 working days per month. All Directors dedicate such time as required to effectively perform their roles. The roles of the Chairman and CEO are clearly separated. The Directors ensure the skills required to undertake their roles are kept current through training and consultation with subject matter experts as required. The CEO is responsible for the operational management of the business of Cadence and for the implementation of strategy and policies as agreed by the Board. The non-executive Chairman is responsible for the leadership and effective working of the Board, for setting the Board agenda, and ensuring that Directors receive accurate, timely and clear information. The Non-Executive Directors are not considered independent under the FRC Code as they hold options in the Company. However, the Board considers that the Non-Executive Directors are independent of management under all other measures and are able to exercise independence of judgement. Whilst conflicts of interest are fully disclosed and understood, as appropriate Non-Executive Directors exercise independence of judgement. No Director is involved in discussions or decisions where he has a conflict of interest. An Audit Committee and a Remuneration Committee support the Board. Cadence intends that the Board endeavours to hold full board meetings at least 3 times each year. The attendance of Board members for meetings during the current financial year is as follows:
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| Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities | The board must have an appropriate balance of sector, financial and public markets skills and experience, as well as an appropriate balance of personal qualities and capabilities. The board should understand and challenge its own diversity, including gender balance, as part of its composition.
The board should not be dominated by one person or a group of people. Strong personal bonds can be important but can also divide a board. As companies evolve, the mix of skills and experience required on the board will change, and board composition will need to evolve to reflect this change. |
Directors who have been appointed to the Company have been chosen because of the skills and experience they offer. The Board continually strives to ensure that it has the right balance of knowledge, skills, experience and contacts across the sectors in which it operates. This is evaluated in line with Cadence’s business model as it changes.
It is of primary importance that the Board’s knowledge is kept to up to date in a rapidly changing mining and metals marketplace. This is achieved by maintaining a broad network of contacts across the industry and ensuring regular dialogue is held and feedback obtained by both the executive and non-executive directors as appropriate. As necessary, Directors receive externally provided refresher and update training specific to their individual roles. The Company Secretary advises the Board members on their legal and corporate responsibilities and matters of corporate governance. Biographical details of each of the Directors are given on the ‘Who We Are’ page of this website HERE. Going forward the Directors biographical details will be included in the Annual Report and Accounts. |
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| Evaluate board performance based on clear and relevant objectives, seeking continuous improvement | The board should regularly review the effectiveness of its performance as a unit, as well as that of its committees and the individual directors. The board performance review may be carried out internally or, ideally, externally facilitated from time to time.
The review should identify development or mentoring needs of individual directors or the wider senior management team. It is healthy for membership of the board to be periodically refreshed. Succession planning is a vital task for boards. No member of the board should become indispensable.
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On the 28 September 2018, the Company adopted the QCA Code. Prior to this point given the nature and the development of the Company it did not set Key Performance Indicators.
The Company now measures its performance, and therefore inherently the performance of the Board as a unit, against Key Performance Indicators. The primary KPI is absolute equity return on investments. Details intend to be disclosed in the Annual Report Accounts going forward. The performance of the Executive Directors is monitored and regularly reviewed by the Non-Executive Directors. Such review considers both the KPIs outlined above, The Board intends to introduce qualitative performance measurements for the Executive Directors to ensure that the right degree of focus is applied to the strategic direction as well as the current financial performance of the business. |
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| Promote a corporate culture that is based on ethical values and behaviours | The board should embody and promote a corporate culture that is based on sound ethical values and behaviours and use it as an asset and a source of competitive advantage.
The policy set by the board should be visible in the actions and decisions of the chief executive and the rest of the management team. Corporate values should guide the objectives and strategy of the company. The culture should be visible in every aspect of the business, including recruitment, nominations, training and engagement. The performance and reward system should endorse the desired ethical behaviours across all levels of the company. The corporate culture should be recognisable throughout the disclosures in the annual report, website and any other statements issued by the company. |
The Company has a strong ethical culture, which is promoted by the actions of the Board and Executive team.
These include the following key policies which govern its ethical culture.
The Company has an anti-bribery policy and has implemented adequate procedures described by the Bribery Act 2010. The Company reports on its compliance to the Board on an annual basis. The Company has undertaken a review of its requirements under the General Data Protection Regulation, implementing appropriate policies, procedures and training to ensure it is compliant. |
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| Maintain governance structures and processes that are fit for purpose and support good decision-making by the board | The company should maintain governance structures and processes in line with its corporate culture and appropriate to its:
· size and complexity; and · capacity, appetite and tolerance for risk. The governance structures should evolve over time in parallel with its objectives, strategy and business model to reflect the development of the company. |
Details of the Company’s corporate governance arrangements are provided within this Corporate Governance section Details of the Company’s corporate governance arrangements are provided within this Corporate Governance section the Annual Report and Accounts. The Board considers the appropriateness of these arrangements against the size and complexity of the Company as it evolves over time.
The Chairman leads the Board and is responsible for ensuring its effectiveness in all aspects of its role. The Chairman promotes a culture of openness and debate, in particular by ensuring the Non-Executive Directors provide constructive challenge to the Executive Directors. The matters reserved for the board are:
The CEO has the overall responsibility for creating, planning, implementing, and integrating the strategic direction of the Company. This includes responsibility for all components and departments of a business. The CEO to ensures that the organisation’s leadership maintains constant awareness of both the external and internal competitive landscape, opportunities for expansion, customer base, markets, new industry developments and standards. The Finance Director works alongside the CEO and has overall control and responsibility for all financial aspects of company strategy. The Finance Director takes overall responsibility of the Company’s accounting function and ensures that Company’s financial systems are robust, compliant and support current activities and future growth. The Finance Director will coordinate corporate finance and manage company policies regarding capital requirements, debt, taxation, equity and acquisitions as appropriate. The Board is supported by two committees being the Audit Committee and Remuneration Committee. The Audit Committee advises the Board on the reporting requirements and the appropriate accounting policies for the Company, the appointment of auditors and their remuneration, and the identification and management of risk. The Remuneration Committee advises the Board on all matters pertaining to the remuneration of the Executive Directors. |
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| Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders | A healthy dialogue should exist between the board and all of its stakeholders, including shareholders, to enable all interested parties to come to informed decisions about the company. In particular, appropriate communication and reporting structures should exist between the board and all constituent parts of its shareholder base. This will assist:
· the communication of shareholders’ views to the board; and · the shareholders’ understanding of the unique circumstances and constraints faced by the company. It should be clear where these communication practices are described (annual report or website).
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The Company encourages two-way communication with both its institutional and private investors and responds quickly to all significant queries received.
The “Investors” tab of this website section of this website contains all required regulatory information together with other information which shareholders may find useful. The AGM is an important forum for shareholder engagement, and the directors are always available immediately after the AGM to listen to the views of any shareholders in attendance and to provide them with an update on the business. Currently there is no Audit Committee report provided in the Annual report but the Board will consider the provision of this in the next Annual report together with other information which shareholders may find useful. |
Internal Controls
The Directors acknowledge their responsibility for the Group’s systems of internal controls and for reviewing their effectiveness. These internal controls are designed to safeguard the assets of the Company and to ensure the reliability of financial information for both internal use and external publication. While they are aware that no system can provide absolute assurance against material misstatement or loss, in light of increased activity and further development of the Company, continuing reviews of internal controls will be undertaken to ensure that they are adequate and effective.
Risk Management
The Board considers risk assessment to be important in achieving its strategic objectives. There is a process of evaluation of performance targets through regular reviews by Senior Management to forecasts. Project milestones and timelines are reviewed regularly.
Business Risk
The Board regularly evaluates and reviews any business risks when reviewing project timelines. The types of risks reviewed include:
- regulatory and compliance obligations
- occupational health, safety and environmental requirements
- legal risks relating to contracts, licences and agreements
- insurance risks
- political risks where appropriate.
Insurance
The Group maintains insurance in respect of its Directors and Officers against liabilities in relation to the Company.
Treasury Policy
The Group finances its operations through equity and holds its cash as a liquid resource to fund the obligations of the Group. Decisions regarding the management of these assets are approved by the Board.
Securities Trading
The Board has adopted a Share Dealing Code 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 certain periods, trading can occur provided the individual has received the appropriate prescribed clearance.
Section 172(1) Statement
The following disclosure describes how the Directors have had regard to the matters set out in section
172(1)(a) to (f) and forms the Directors’statement required under section 414CZA of The Companies Act 2006.
This new reporting requirement is made in accordance with the new corporate governance requirements
identified in The Companies (Miscellaneous Reporting) Regulations 2018, which apply to company reporting
on financial years starting on or after 1 January 2019.
The matters set out in section 172(1) (a) to (f) are that a Director must act in the way they consider, in good
faith, would be most likely to promote the success of the Company for the benefit of its members as a whole,
and in doing so have regard (amongst other matters) to:
–the likely consequences of any decisions in the long-term;
–the interests of the Company’s employees;
–the need to foster the Company’s business relationships with suppliers/customers and others;
–the impact of the Company’s operations on the community and environment;
–the Company’s reputation for high standards of business conduct; and
–the need to act fairly between members of the Company.
As set out above in the Strategic Report the Board remains focused on providing for shareholders through the
long term success of the Company. The means by which this is achieved is set out further below.
Likely consequences of any decisions in the long-term;
The Chairman’s Statement, the Chief Executive Officer’s Commentary and the Strategic Review set out the
Company’s strategy. In applying this strategy, particularly in seeking new Project Investments and strategic
holdings in other public companies, the Board assesses the long term future of those companies with a view
to shareholder return. The approach to general strategy and risk management strategy of the group is set out
in the Statement of Compliance with the Quoted Companies Alliance (“QCA”) Corporate Governance Code
(the “QCA Code”) (Principles 1 and 4) on pages [23-24] of the Company’s Annual Report.
Interest of Employees;
The Group has a very limited number of employees, and all have direct access to the Executive Directors on a
daily basis and to the Chairman, if necessary. The Group has a formal Employees’ Policy manual which includes
process for confidential report and whistleblowing.
Need to foster the Company’s business relationships with suppliers/customers and others;
The nature of the Group’s business is such that the majority of its business relationships are with joint venture
partners, the boards of directors of the companies in which the Group has strategic stakes to the extent that
such relationships are permitted, and with suppliers for services. As the success of the business primarily
depends on its relationship with its partners and investees, the Executive Directors manage these
relationships on a day-to-day basis. Where possible, the Group will take a board, or similar appointment, in
strategic investees to ensure that there is a close and successful ongoing dialog between the parties. Service
providers are paid within their payment terms and the Group aims to keep payment periods under 30 days
wherever practical.
Impact of the Company’s operations on the community and environment;
The Group takes its responsibility within the community and wider environment seriously. Its approach to its
social responsibilities is set out in the Statement of Compliance with the QCA Code (Principle 3) on page [24]
of the Company’s Annual Report.
The desirability of the Company maintaining a reputation for high standards of business conduct;
The Directors are committed to high standards of business conduct and governance and have adopted the
QCA Code which is set out on pages [23 to 30] of the Company’s Annual Report. Where there is a need to seek advice
on particular issues, the Board will consult with its lawyers and nominated advisors to ensure that its reputation for good business
conduct is maintained.
The need to act fairly between members of the Company;
The Board’s approach to shareholder communication is set out in the Statement of Compliance with the
(Principle 2) on page [23] of the Company’s Annual Report. The Company aims to keep shareholders fully
informed of significant developmentsin the Group’s progress. Information is disseminated through Stock Exchange announcements, website
updates and, where appropriate video/web casts. During the year the Company issued various RNS and videos
to update shareholders. All information is made available to all shareholders at the same time and no
individual shareholder, or group of shareholders, is given preferential treatment.