The Directors acknowledge the importance of high standards of corporate governance and intend, given the Company’s size and the constitution of the Board, to comply, so far as is practicable given the size of the Company and the nature of the business at the current time, with the principles set out in the Quoted Companies Alliance’s Corporate Governance Code (QCA Code).
The Board follows the Quoted Companies Alliance’s Corporate Governance Code (QCA Code) on the basis it is most suited to our requirements, size, strategy, resources and stage of development. It offers a flexible but rigorous framework that allows Kistos to continue to develop its governance model in support of the business.
The Company currently has three Executive Directors and three Non-Executive Directors. The Non-Executive Directors, Richard Benmore, Stephen Pawson, and Alan Booth, are each regarded by the Company as being independent of the Company and are free from any business or other relationship that could materially interfere with the exercise of their independent judgment. The Board intends to meet bi-monthly, at least six times a year and more frequently as required.
Alan Booth is the designated Senior Independent Non-Executive Director in order to allow for the Chairman and other Directors to have a sounding board, whilst also offering an alternative route of access for shareholders, as recommended by the Code.
All the Directors will have access to the advice and services of the Company Secretary and will be able to gain access to external independent advice should they wish to do so. The Board will be supplied with regular and timely information concerning the activities of the Company from executive Board members and senior management so that it is able to exercise its responsibilities and control functions in a proper and effective manner.
Board of Directors
Audit and Risk Committees
Chair
Steve Pawson
Remuneration Committee
Chair
Alan Booth
Nomination Committee
Chair
Richard Benmore
Senior leadership team
The senior leadership team works closely with the Executive Directors on operational and strategic areas, including financial planning and analysis, risk management and controls, corporate governance, business development and HSE matters. The senior leadership team meets on a weekly basis and includes representation from the operational areas below.
Kistos Norway
Kistos Norway comprises the Group’s non-operated interests in the Balder and Ringhorne Øst licences in the Norwegian North Sea.
Kistos Norway is led by Sverre Skogen, CEO Kistos Norway.
Kistos Netherlands
Kistos Netherlands comprises the Group’s operated interests in the Netherlands, primarily in the Dutch North Sea.
Kistos Netherlands is led by Renee Borsch, Country Manager.
Kistos UK
Kistos UK comprises the Group’s nonoperated interests in the GLA, oversight of which is managed by UK employees and head office functions.
The head office functions include
Group finance and accounting, legal, company secretarial, HSE and business development.
The Directors have established an Audit Committee, a Nominations Committee, a Disclosure Committee and a Remuneration Committee with formally delegated duties and responsibilities to operate with effect from Admission, as described below.
The Audit Committee will have the primary responsibility of monitoring the quality of internal controls to ensure that the financial performance of the Company is properly measured and reported on. It will receive and review reports from the Company’s external auditors relating to the interim and annual accounts and the accounting and internal control systems in use within the Company. The Audit Committee will meet not less than three times in each financial year and will have unrestricted access to the Company’s external auditors. The terms of reference of the Audit Committee require that the members of the Audit Committee shall include only Independent Non-Executive Directors and one member, preferably the chairman of the Audit Committee, shall have recent and relevant financial experience with competence in accounting and auditing.
The Audit Committee, which comprises Alan Booth and Steve Pawson, with Stephen Pawson acting as Chair. The Company considers that as a smaller company for the purpose of the QCA Corporate Governance Code, the composition of the Audit Committee is consistent with the principles of the QCA Corporate Governance Code.
The Nominations Committee, which will comprise, following Admission, Richard Benmore and Alan Booth, with Richard Benmore acting as Chair, will review the composition and efficacy of the Board and where appropriate recommend nominees as new directors to the Board.
The Remuneration Committee will review the performance of the Directors and make recommendations to the Board on matters relating to their remuneration and terms of service. The Remuneration Committee will make recommendations to the Board on proposals for the granting of share options and other equity incentives pursuant to any employee share option scheme or equity incentive plans in operation from time to time.
The members of the Remuneration Committee include only Independent Non-Executive Directors. The Remuneration Committee, which comprises Alan Booth and Stephen Pawson, with Alan Booth acting as Chair. The Company considers that as a smaller company for the purposes of the QCA Corporate Governance Code. The composition of the Remuneration Committee is consistent with the principles of the QCA Corporate Governance Code.
The Disclosure Committee will enforce the Enlarged Group’s inside information policy and, in particular, assess whether information is ‘inside information’ and resolve queries about its materiality. For example, the committee will determine whether an announcement is required in respect of any such inside information and procure that such announcement is made as soon as possible in accordance with the provisions of the AIM Rules and UK MAR. The Disclosure Committee will meet regularly throughout the financial year and, in particular, during periods of heightened market sensitivity.
The Disclosure Committee will comprise Alan Booth and Stephen Pawson and will be chaired by Steve Pawson. The Disclosure Committee will meet as required.
The Directors will comply with Rule 21 of the AIM Rules for Companies relating to directors’ dealings and will take all reasonable steps to ensure compliance by the Company’s applicable employees.
The Company has adopted and will operate a share dealing code for Directors and Company employees in accordance with the AIM Rules for Companies.
The Board complies with the QCA Corporate Governance Code on the basis it is most suited to our requirements, size, strategy, resources, and stage of development. It offers a flexible but rigorous framework that allows Kistos to continue to develop its governance model in support of the business.
Shareholder engagement and participation
In addition to the Senior Independent Director acting as a sounding board for the Chairman and as an intermediary for Shareholders, the Articles contain the following provisions designed to reflect the principles of the QCA Corporate Governance Code and engender real shareholder engagement and empowerment. In particular:
- all directors are required to stand for re-election at each annual general meeting, giving Shareholders the annual right to give feedback on the performance of the full board
- voting at all Shareholder meetings will be on the basis of poll voting, with the effect that only the actual numbers of votes cast will be determine whether a particular resolution is passed (and dispensing with the arcane show of hands which has been the subject of much recent criticism from reformers); and
- the Articles allow for the holding of Shareholder meetings as physical meetings, virtual meetings or hybrid meetings; it is a requirement for any valid virtual meeting that Shareholders have the right to speak at the meeting and to participate in the poll in real time.
Corporate Governance Statement
Kistos Holdings plc is listed on AIM and complies with obligations under the AIM Rules for Companies, and its shares are traded under the KIST ticker.
This Corporate Governance Report incorporates committee reports from the Audit and Disclosure Committees, the Nominations Committees, the Remuneration Report and the Directors’ Report.
Kistos operates within a corporate and regulatory framework commensurate with the scale and scope of its operations, consisting of effective Board and committee processes to ensure leadership, strategic direction and operational effectiveness; effective internal controls both financial and non-financial; and appropriate remuneration and reward policies and procedures.
Kistos has adopted the 2018 edition of the QCA Code and the section sets out below details of how we meet those governance principles, or explains how and why compliance is not achieved in full.
- Principle 1
- Principle 2
- Principle 3
- Principle 4
- Principle 5
- Principle 6
- Principle 7
- Principle 8
- Principle 9
- Principle 10
Establish a strategy and business model which promotes long-term value for shareholders.
Application and compliance
Kistos’ strategy is considered and approved by the Board, along with continuous monitoring of delivery and progress against objectives. Board deliberations and decisions focus on how shareholder value can be increased and delivered in the short to medium term.
Further information
See page 17 of the Strategic Report for more on our strategy and business model.
Seek to understand and meet shareholder needs and expectations.
Application and compliance
The Board considers how its decisions could impact and be received by shareholders and stakeholders. Kistos engages with shareholders at the Annual General Meeting (AGM), after results announcements and following significant operational events or transactions (subject to compliance with legal and regulatory requirements, including Market Abuse Regulations). It also regularly presents at investor events. During 2023, the representatives of the Board engaged with stakeholders through a combination of online forums and face-to-face meetings.
Further information
See pages 17, 18, 27 in the Strategic Report and page 53 in the Corporate Governance Report on Kistos’ relations with shareholders and wider stakeholder engagement.
Take into account wider stakeholder and social responsibilities and their implications for long-term success.
Application and compliance
The Board and senior management routinely consider the wider impact of its decisions on bondholders, shareholders, employees, suppliers, regulators, business partners and local communities in which Kistos operates.
Further information
See pages on stakeholder engagement including our Section 172 Statement (page 27) and our ESG Strategy and ESG Goals on pages 19 and 20 that aim to demonstrate how Kistos manages stakeholder and wider social responsibilities.
Embed effective risk management, considering both opportunities and threats, throughout the organisation.
Application and compliance
The principal risks and uncertainties and the actions required to mitigate against these have all been identified and assessed by the Board of Directors and the members of the Audit Committee and senior management. The Board aims to balance the opportunity for growth in shareholder value against the context of our industry’s associated risks.
Significant decisions are deliberated by the Board taking into account the principal risks, any mitigations and the overall risk tolerance and appetite.
Kistos has a Corporate Risk Register, which is prepared using a bottom-up process and is regularly reviewed and updated to take account of any changes to the business, wider environment and likely impact.
Further information
See pages 29 to 37 in the Principal Risks and Risk Management section that outline those risks relevant to Kistos and how those risks are managed across the Group.
Maintain the Board as a well-functioning and balanced team led by the Chairman.
Application and compliance
The Chair of the Board is Andrew Austin. As the founder and 17.25% shareholder, he is not independent. Of the Non-Executive Directors, Alan Booth and Richard Benmore are shareholders in the Company, and Julie Barlow and Richard Benmore have previously held Board and other roles at IGas and RockRose Energy (companies founded by Andrew Austin).
Nonetheless, because they are not financially reliant on Kistos, all the Non-Executive Directors are considered to be independent. This is after taking note of The Investment Association’s Principles of Remuneration, which encourages share ownership by Non-Executive Directors provided they do not receive incentive awards geared to the share price or corporate performance.
Given the size of the Board and the Company, the Directors have not considered it appropriate to have a senior independent Director.
Further information
See pages 39 to 40 and 44 to 45 on the Board composition, meetings held and the work carried out by the Board during the year.
Ensure that between them the Directors have the necessary up-to-date experience, skills and capabilities.
Application and compliance
The Board, collectively, has significant experience in the North Sea oil and gas, exploration, development and production sector. The Directors have also consummated at least 14 significant acquisitions, including the Mime Acquisition in 2023, and planned and executed three farm-out transactions with energy majors as counterparties. In addition, the Board has significant expertise and experience of dealing with the political and social issues facing the industry at both the local and national governmental levels, in the UK and overseas. Where relevant, Board members are given training on their role and fiduciary duties as Director of a listed company. They also have access to internal training materials and resources and receive updates on key matters from the external statutory auditor at least twice a year.
The Board and Company does not have an individual who acts as the Company Secretary.
Further information
See pages 39 to 40 for details of the Board’s biographies.
Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement.
Application and compliance
The Board does not undergo a formal internal evaluation process, has not engaged a third party to perform an independent review of its effectiveness and has no current plans to do so as the Executive Chairman considers the Board performance to be of an appropriate level.
Further information
n/a
Promote a corporate culture that is based on ethical values and behaviours.
Application and compliance
The Board encourages and promotes a corporate culture based on ethical values and behaviours. It endorses policies consistent with fair, safe and ethical values (such as its Anti-Bribery Statement and Policy and Code of Business Conduct) commensurate with its regulatory environment.
Further information
See page 26 in the Our ESG performance section.
Kistos’ Anti-Bribery Statement and Policy is published on our website.
Maintain governance structures and processes that are fit for purpose and support good decision making by the Board.
Application and compliance
The Board is accountable for good governance and maintains control over the Company. Kistos holds regular Board meetings at which financial, operational and other reports are considered and voted on. There is an organisational structure with lines of responsibility and delegation of authority to executive management. Where needed, the Board has access to, and uses, external independent advisers to assist in discharging its duties.
Further information
See pages 25 to 26 of the Corporate Governance Report for details of the governance framework.
The roles of each Board Committee are set out in their relevant reports.
Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders.
Application and compliance
The Board recognises the benefits of engaging with shareholders and stakeholders and, to ensure this happens, meets regularly to update them with the activities of the Company. Although due to its size Kistos does not have a formal investor relations department, investor communications are facilitated in conjunction with the Company’s NOMAD and IR advisors.
In addition, the Company’s financial and operational performance is summarised in the Annual Report and the Interim Report. Other timely and market-sensitive updates are provided throughout the year through the Regulatory News Services (RNS), press releases and regular updates to the Company’s website.
Further information
See pages 27 to 28 outlining the Company’s processes on governance and stakeholder engagement.
