The Board of Directors of Premier Goldmines Limited is responsible for the corporate governance of the Company and its subsidiaries.
The Company is listed on the Sadiego Stock Exchange ("SSX") and the AIM market of the London Stock Exchange plc ("AIM"). This statement outlines the main corporate governance practices in place throughout the financial year, which comply with the corporate governance requirements of the relevant Canadian Securities Administrators, unless otherwise stated.
Board of Directors
Role of the Board
The Board's primary role is the protection and enhancement of long-term shareholder value.
To fulfil this role, the Board is responsible for the overall corporate governance of the consolidated entity including formulating its strategic direction, approving and monitoring capital, exploration and operating expenditure, setting remuneration, appointing and removing directors and senior employees, establishing and monitoring the achievement of management's goals and ensuring the integrity of internal control and management information systems. It is also responsible for approving and monitoring financial and other reporting.
The Board has delegated responsibility for operation and administration of the Company to the Chief Operating Officer and Chief Financial Officer, and senior employees.
To assist in the execution of its responsibilities, the Board has established an Audit Committee, a Compensation Committee, a Corporate Governance & Nominating Committee and a Technical Committee.
The Board has established a framework for the management of the consolidated entity including a system of internal control, a business risk management process and the establishment of appropriate ethical standards.
The Board meets at least six times a year to discuss operational matters and strategy and on other occasions (as required) to address any specific significant matters that may arise. The agenda for meetings is prepared in conjunction with the Chairman, Chief Operating Officer, Chief Financial Officer and, as required, external legal counsel. Board presentations and reports are circulated in advance.
Independent professional advice and access to company information
Each Director has the right of access to all relevant company information and to the Company's employees and, subject to prior consultation with the Chairperson, may seek independent professional advice from a suitably qualified adviser at the consolidated entity's expense. The Director must consult with an advisor suitably qualified in the relevant field, and obtain the Chairperson's approval of the fee payable for the advice before proceeding with the consultation. A copy of the advice received by the Director is made available to all other members of the Board. The Audit Committee has authority to engage independent counsel and other advisors as it determines necessary without prior consultation with (or approval of the fee payable by) the Chairperson.Composition of the board
The names of directors of the Company in office at the date of this report are:
Mr Klaus Eckhof resigned as the President, Chief Executive
Officer and Executive Director of the Company on December 31,
2007 and attended fourteen of eighteen board meetings held
during the period he held office.
The composition of the Board is determined using the
The composition of the Board is reviewed on an annual basis to ensure that the Board has the appropriate mix of expertise and experience. When a vacancy exists, through whatever cause, or where it is considered that the Board would benefit from the services of a new director with particular skills, a panel of candidates is selected with the appropriate expertise and experience. External advisers may be used to assist in such a process. The Board then appoints the most suitable candidate who must stand for election at the next general meeting of shareholders.
New Directors appointed to the Board are invited to participate in an induction programme which includes briefing sessions with the Chief Executive Officer and Chief Financial Officer and provision of comprehensive written material regarding the Company. Directors agree to participate in continuous improvement programs from time to time, as considered appropriate.
The Board assesses the independence of new Directors prior to appointment and reviews the independence of all Directors as appropriate.
The Board has established Audit, Compensation, Corporate Governance and Nominating and Technical Committees which assist the discharge of the Board's responsibilities.
The Audit Committee was formed on May 27, 2005 and has been structured to comply with the requirements of National Instrument 52-110 Audit Committees of the Canadian Securities Administrators. The Audit Committee must comprise at least three directors. All members of the Audit Committee must be independent, non-executive directors. The Audit Committee is currently comprised of Sam Jonah KBE (Chairman), Sean Harvey and Dr Jeffrey O'Leary.
The main responsibilities of the committee are to:
The Audit Committee meets at least once a quarter and at other times as requested by Directors, the Company Secretary or external auditor. The Audit Committee held four meetings during the 2007 year. The meetings were attended by Sam Jonah KBE, Sean Harvey and Dr Jeffrey O'Leary.
The Compensation Committee was formed on May 27, 2005 and is currently compromised of Sam Jonah KBE (Chairman), Walter Kansteiner, David Hodgson and Sean Harvey. As required by the SSX, all members of the Compensation Committee are independent, non-executive directors.
The committee's role is to oversee and provide support to the Board concerning the Company's remuneration policies and practices, considering the overall remuneration strategy, the awards of stock options and where possible the committee will verify the appropriateness of existing remuneration levels using external sources for comparison. The broad remuneration policy is to ensure the remuneration package properly reflects the person's duties and responsibilities and level of performance, and that remuneration is competitive in attracting, retaining and motivating people of the highest quality. All director and executive appointments and remuneration matters are decided by the full Board, after considering recommendations of the Compensation Committee, with the overall objective of ensuring maximum shareholder benefit from the retention of a high quality Board and executive team.
To assist in achieving this objective, the Compensation Committee compares the nature and amount of the directors and executives emoluments to performance against goals set for the year and considers relevant comparative information, independent expert advice, and the financial position of the company.
Remuneration packages include a mix of fixed remuneration and short and long-term performance-based incentives. Executive directors and staff may receive bonuses based on the achievement of performance hurdles.
Fixed remuneration - Fixed remuneration consists of base remuneration and statutory superannuation entitlements. Remuneration levels are set by the Board based on individual performance and the performance of the Company.
Performance-linked remuneration - Performance-linked remuneration includes both short-term and long-term incentives and is designed to reward executive directors and staff. The short-term incentive is provided in the form of cash, while the long-term incentive is provided as stock options. The Board exercises discretion in determining the amount of short-term incentives paid and stock options issued. Performance is measured by the efficiency, effectiveness and success of the exploration and development programme. Performance-based remuneration is not based on specific financial indicators such as earnings or dividends as the Company is at the exploration and development stage and during this period is expected to incur operating losses.
All executives and senior employees of the Company are eligible to participate in Premier's Stock Option Plan as an incentive and in recognition of the fact that the fixed cash component of remuneration is comparatively modest. The ability to exercise the options is conditional on the holder remaining in the Company's employment. There are no other non-cash benefits available to directors or employees. There is no separate profit-share plan.
In the first quarter of 2007 Director's base fees were set at CAD$60,000 and CAD$75,000, and the Chairman's base fee at CAD$100,000 (plus a 10% pension contribution). Director's fees cover all Board activities. Fees may also be paid to non-executive directors for additional consulting services provided to the Company. Non-executive directors are entitled to receive options.
The Company does not have any schemes for retirement benefits for directors.
The remuneration paid to Directors (including the issue of stock options) is shown in the Section 7 of the Management Discussion and Analysis. The Compensation Committee meets at least twice a year and at other times as requested by Directors. The Compensation Committee held two meetings during the 2007 year. The meetings were attended by Sam Jonah KBE, Walter Kansteiner, David Hodgson and Sean Harvey.
Corporate Governance and Nominating Committee
The Corporate Governance and Nominating Committee was formed on May 27, 2005 and is compromised of Walter Kansteiner (Chairman), Sam Jonah KBE, Dr Jeffrey O'Leary and David Hodgson.
The Corporate Governance and Nominating Committee is responsible for developing the Company's approach to corporate governance issues. The Corporate Governance and Nominating Committee is mandated to adopt a strategic planning process, to identify the principle risks of the Company's business and to ensure the implementation of appropriate systems to manage these risks. It also includes the development and implementation of corporate communications policies.
The Corporate Governance and Nominating Committee is also mandated to plan for the succession of senior management, including appointing, training and monitoring senior management to ensure that the Company's Board and management have appropriate skill and experience. The functions of the Corporate Governance and Nominating Committee also include administration of the Board's relationship with management, monitoring quality and effectiveness of its corporate governance system and ensuring the effectiveness and integrity of communication and reporting to shareholders and the public generally.
This committee is also responsible for assessing the
performance of existing directors and proposing new nominees
to the Board. New nominees must have a track record in
general business management or special expertise in a
strategic interest to the Company and the ability to devote
the time required.
The Corporate Governance and Nominating Committee meets at least twice a year and at other times as requested by Directors. The Corporate Governance and Nominating Committee held two meetings during the 2007 year. The meetings were attended by Walter Kansteiner, Sam Jonah KBE, Dr Jeffrey O'Leary and David Hodgson.
The Technical Committee was formed on October 24, 2005 and
is currently compromised of David Hodgson (Chairman), Dr
Jeffrey O'Leary, Andrew Dinning and Louis Watum. The Board's
objective is to develop a world class mining operation at the
Moto Gold Project. The Board recognizes the significant work
that must be completed to achieve this objective, and as a
result it was determined to establish a technical committee to
provide guidance to and oversee the feasibility development
Oversight of the risk management system
The Board oversees the establishment, implementation, and annual review of the Company's Risk Management System. Management has established and implemented the Risk Management System for assessing, monitoring and managing operational, financial reporting and compliance risks for the consolidated entity. Financial reporting risk management and associated compliance and controls have been assessed and found to be operating adequately. The operational and other compliance risk management have also been assessed and found to be operating efficiently and effectively. All risk assessments covered the whole financial year and the period up to the signing of the financial report for all material operations in the consolidated entity.
The Executive Directors report to the Board regularly on the status of risks, ensuring that they are identified, assessed and appropriately managed.
Major risks arise from such matters as political risk, exploration risk, security of tenure, environment, government policy changes, commodity prices, occupational health and safety and financial reporting.
Comprehensive practices have been established to ensure:
Quality and integrity of personnel
Formal appraisals are conducted at least annually for all employees. Training and development and appropriate remuneration and incentives with regular performance reviews create an environment of co-operation and constructive dialogue with employees.
The Chief Executive Officer and the Chief Financial Officer have made the relevant declarations, statements and certifications to the board in relation to the Company's December 31, 2007 financial report, including financial statements.
The consolidated entity holds mineral interests in the Democratic Republic of Congo, Burundi and Australia. The consolidated entity's operations are subject to environmental regulations in the Democratic Republic of Congo and Australia in relation to its exploration and development activities.
The consolidated entity is committed to achieving a high
standard of environmental performance. The Chief Operating
Officer and Exploration Manager are responsible for the
regular monitoring of environmental exposures and compliance
with environmental regulations. As part of this process they
are responsible for:
The Board is advised of any significant environmental issues as they occur. Based upon the work completed, the Board is not aware of any significant breaches of environmental requirements during the period covered by this report.
The Board acknowledges the need for continued maintenance of the highest standards of corporate governance practice and ethical conduct by all Directors and employees of the consolidated entity. A fundamental theme of the consolidated entity's code of ethics is that all business affairs are conducted legally, ethically and with the strict observance of the highest standards of integrity and propriety. The Directors and management have the responsibility to carry out their functions with a view to maximising financial performance of the consolidated entity.
All directors and employees are expected to act with the utmost integrity and objectivity, striving at all times to enhance the reputation and performance of the consolidated entity.
The Board has approved a Whistleblower Policy which documents the Company's commitment to maintaining an open working environment in which employees and contractors are able to report instances of unethical, unlawful or undesirable conduct without fear of intimidation or reprisal.
Conflict of Interest
Directors must keep the board advised, on an ongoing basis, of any interest that could potentially conflict with those of the Company. Where the Board believes that a significant conflict exists for a director on a board matter, the director concerned does not receive the relevant board papers and is not present at the meeting whilst the item is considered. Details of director related entity transactions with the Company are set out in section 7 of the Management Discussion and Analysis.
Trading in Company securities by directors and employees
The policy on trading in Company securities by directors and employees is that directors and employees are prohibited from dealing in Company shares or exercising options whilst in possession of price sensitive information not yet released to the market.
Communication with shareholders
The board provides shareholders (and prospective investors) with information using a comprehensive continuous disclosure policy which includes identifying matters that may have a material effect on the price of the Company's securities, notifying them to the SSX and AIM, posting them on the Company's website, and issuing media releases.
In summary, information is communicated to shareholders by:
All of the above information is made available on the Company's website within three days of public release, and is emailed to all shareholders who lodge their email contact details with the Company. Information with respect to lodging email addresses with the Company are available on the Company's website.
The Board encourages full participation of shareholders at the Annual General Meeting, to ensure a high level of accountability and identification with the consolidated entity's strategy and goals. Important issues are presented to the shareholders as single resolutions.