There is no applicable regime of corporate governance to which directors of a Cayman Islands company must adhere over and above the general fiduciary duties of care, diligence and skill imposed on such directors under Cayman Islands law. The Directors recognise the importance of sound corporate governance commensurate with the size and nature of the Company and the interests of its Shareholders.
The directors recognise the value of the Quoted Companies Alliance Corporate Governance Code for Small and Mid-Size Quoted Companies, to the extent they consider it appropriate and having regard to the size, current stage of development and resources of the Company. And while under the AIM rules full compliance is not required, the directors believe that the company applies the recommendations in so far as is appropriate for a public Company of its size.
As a company incorporated in the Cayman Islands, LEKOIL is not a subject to the UK City Code on Takeovers and Mergers (City Code), or any other such legislation or code in its country of incorporation or operation. LEKOIL has voluntarily adopted provisions in its Articles of Association of similar effect to Rule 9 of the City Code.
The Board will meet regularly and be responsible for strategy, performance, approval of any major capital expenditure and the framework of internal controls. The Board will have a formal schedule of matters specifically reserved to it for decision, including matters relating to major capital expenditure, management structure and appointments, strategic and policy considerations, corporate transactions and finance. The Board will be responsible for establishing and maintaining the Group's system of internal financial controls and importance is placed on maintaining a robust control environment. The key procedures which the Board intends to establish with a view to providing effective internal financial control include the following:
- the Company will institute a monthly management reporting process to enable the Board to monitor the performance of the Group;
- the Board will adopt and review a comprehensive annual budget for the Group. Monthly results will be examined against the budget and deviations will be closely monitored by the Board;
- the Board will be responsible for maintaining and identifying major business risks faced by the Group and for determining the appropriate courses of action to manage those risks; and
- fully consolidated management information will be prepared on a regular basis, at least half yearly.
The Board recognises, however, that such a system of internal financial control can only provide reasonable, not absolute, assurance against material misstatement or loss. The effectiveness of the system of internal financial control operated by the Group will therefore be subject to regular review by the Board in light of the future growth and development of the Company and adjusted accordingly. To enable the Board to discharge its duties it is intended that all of the Directors will receive timely information in respect of the affairs of the Group.
The audit committee will comprise H. Adesola Oyinlola, Gregory Eckersley and John van der Welle on Admission. The members will all be independent Non-Executive Directors of the Company. It shall meet not less than three times a year. The audit committee receives and reviews reports from management and from the Company’s auditors relating to the interim and annual accounts and to the internal control procedures in use throughout the Group. It is responsible for ensuring that the financial performance of the Group is properly reported with particular regard to legal requirements, accounting standards and the AIM Rules for Companies. The ultimate responsibility for reviewing and approving the annual report and accounts and the half-yearly reports remains with the Board.
The remuneration committee will comprise Samuel Adegboyega, Gregory Eckersley, Aisha Muhammed-Oyebode and John van der Welle on Admission. The members will all be independent Non-Executive Directors of the Company. It shall meet not less than twice a year. It is responsible for determining and reviewing the terms and conditions of service (including remuneration) and termination of employment of executive directors and senior employees and the grant of options implemented from time to time. The Directors intend to comply with Rule 21 of the AIM Rules relating to directors’ and applicable employees’ dealings in the Company’s securities. Accordingly, the Company has adopted the Share Dealing Code for directors and applicable employees and the Company will take all reasonable steps to ensure compliance by its directors and applicable employees with the provisions of the AIM Rules relating to dealings in securities.
Company responsibility: LEKOIL is committed to demonstrating leadership in stewardship of the environment, employee health and safety, and social responsibility. The Company seeks to conduct the Company with the highest ethical standards in an overriding effort to make a positive impact in the communities where it operates.
Environmental regulations: Nigeria’s Environmental Impact Assessment Act (“EIAA”) requires every company whose activity or project is likely to have a significant effect on the environment to carry out an impact assessment programme prior to the commencement of the project. The assessment is to be referred to the Federal Ministry of Environment, the regulatory body charged with the responsibility of administering the EIAA, for approval. In addition, the EIAA classifies oil and gas development and construction of off-shore pipelines in excess of 50 km in length among projects that will require environmental impact assessment to be conducted.
Environmental Guidelines and Standards for the Petroleum Industry in Nigeria The Environmental Guidelines and Standards for the Petroleum Industry in Nigeria (the “Guidelines”) were issued by the Department of Petroleum Resources (DPR). The Guidelines mandate all licence holders or operators in the petroleum industry to adopt a systematic and integrated environmental management plan. They control the quality and quantity of industrial effluents associated with oil drilling activities/operations to ensure that such discharges do not cause any hazard to human health and living organisms. The Guidelines require that a mandatory environmental permit be obtained from the DPR prior to the commencement of seismic and drilling operations in Nigeria. An application for an environmental permit must be accompanied by an EIA report.
Employee safety: LEKOIL’s highest priority is to ensure the safety, health and well-being of our employees and contractors. The Company is committed to implementing policies and procedures that will eliminate risks in the workplace. These include operational controls and procedures, proper job training, risk assessment and ongoing monitoring of working conditions.