Corporate Governance

The Board

The Board is responsible for creating value for shareholders, determining strategy, investment and acquisition policy, approving significant items of expenditure and for the consideration of significant financing and legal matters.

The Group is currently led and controlled by a Board, comprising of the Non Executive Chairman, and one Executive Director.

The Board considers that the Non-Executive Director each have specific expertise and experience, materially enhancing knowledge and judgment to contribute to the overall performance of the Board. Click here to see the biographies of the Board of Directors.

Board Member	Title	Audit & Risk	Remuneration	Nomination
Carl Dumbrell	CEO	Chairman	Member	Member
Jeffrey Williams	Non Executive Chairman	Member	Chairman	Chairman

The Committees

Audit Committee

The audit committee consists of two members of the board and meet at least twice a year.

The principal duties and responsibilities of the Audit Committee include:

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 annually the auditor’s independence and objectivity
Make recommendations in relation to the appointment, re-appointment and removal of the company’s external auditor
Review and consider for approval, significant new contracts

The audit committee terms of reference: Audit Committee

Remuneration Committee

The remuneration committee consists of two members of the board and meet at least once a year.

The principal duties and responsibilities of the Remuneration Committee include:

Setting the remuneration policy for all Executive Directors and the Chairman
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 have any personal financial interest (other than as shareholders), conflicts of interest arising from cross-directorships or day-to-day involvement in the running of the business. No director plays a part in any financial decision about his or her own remuneration.

The Remuneration Committee terms of reference: Remuneration Committee

Nomination Committee

The Nomination Committee consists of two members of the Board and meet at least once a year.

The principal duties and responsibilities of the Nomination Committee include:

Regularly reviewing the structure, size and composition of the Board
Considering succession planning for Directors and other senior Executives
Identifying and nominating for the approval of the Board, candidates to fill Board vacancies as and when they arise
Membership of the Audit and Remuneration Committees Nomination

The Nomination Committee terms of reference: Nomination Committee

Principles and Approach of the Board

Herencia Resources plc 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.

1. Establish a strategy and business model which promote long-term value for shareholders

Business description

Herencia Resources plc (“Herencia”) vision is to become a significant exploration and development company in Chile, focus on the resources of Cooper and Gold.

Herencia has over a decade of experience in exploration in Chile and a proven record of bring projects to market and the identification of new exploration projects.

Herencia has a small but strong team, lead by its board of directors who work closely with the team in Chile, whom are responsible for day to day operations of the company exploration projects.

The company is focused on delivering results and the creation of long term value for shareholders. The new management team have implemented a reporting framework which allows for the ongoing reporting from our operations team in Chile. We also have conducted review of our relationship with suppliers and made a number of changes which we feel is in the interest of our shareholders.

Strategy

The board and management is focused on delivering results for our shareholders whilst respecting the local partners and landowners whom we work with in Chile. Our strategy is to be a low cost exploration company, and discover high quality Cooper and gold projects in Chile.

We have recent appointed a specialist resource communication firm in London, Blytheweigh, whose role is to assist with board in the communication of our work program, ongoing results and ensure the market is well informed on the goals and objectives of the company.

The key challenges for the board are to:

Identify new exploration projects (Copper and Gold) in Chile;
Management of the company’s existing projects and work-programs

2. Seek to understand and meet shareholder needs and expectations

The Board is committed to maintaining good communications and having a constructive dialogue with both its institutional and private shareholders. The Company endeavours to maintain a dialogue and keep shareholders informed though its public announcements and its website. The Company distributes all RNS releases to all shareholders whom have registered their email address. We welcome all shareholders to contact the company to provide their email address and received ongoing alters both for both regulatory announcements and non-regulatory news.

The Company encourages all shareholders to attend its Annual General Meeting where they can meet and question the Directors and express ideas or concerns. The Directors undertake presentations and roadshows to institutional investors as appropriate and periodically participate in recorded interviews that are available to view on the corporate website.

Shareholders are welcome, to contact the CEO and Chairman via email and telephone. In addition, shareholder communication is answered, where possible or appropriate, by Directors or the Company’s Financial PR advisors, Blytheweigh or the Company’s broker, WH Ireland.

3. Take into account wider stakeholder and social responsibilities and their implications for long-term success

Stakeholder relations

The Board recognises that the Company’s continued growth and long-term success is largely reliant on its relations with its stakeholders, both internal (employees and shareholders) and external (customers, suppliers, agents, business partners and advisors etc).

Our employees are a key factor in delivering successful growth and as such the Company fosters an open and friendly dialogue throughout its workforce. The Company undertakes employee reviews and assessments to identify and assist employees with training and career progression. The Company endeavours to keep its workforce informed on the Company’s progress and holds regular meetings both formal and informal via social events.

The company maintains regular dialogue with its external stakeholders particularly its advisors in London and Chile. The company works closely with its advisors to ensure it operates in conformity of its listing regulations as well as the social, legal, religious and cultural requirements of the countries in which it operates.

The company has implemented changes following the considerations of our stakeholders and will continue to engage with our stakeholders in the future.

Social Responsibilities

As a Company, we take our corporate social responsibilities very seriously, particularly as we operate in emerging market (Chile) and in some cases in areas of poverty and deprivation. The company aims to:

be accountable for our actions and activities;
be transparent about our activities and decisions that affect society, the economy and the environment;
operate in an ethical manner in all our business operations;
be mindful of and respect our stakeholder interests, both internal stakeholders (employees and shareholders) and external (customers, suppliers, agents, business partners and advisors etc.);
respect the rule of law wherever we operate;
respect international norms of behaviour wherever we operate;
respect human rights in whatever we do and wherever we operate.

We recognise that Social Responsibility is a process that will develop and evolve with practice and time and one in which all our employees have a role to play.

4. Embed effective risk management, considering both opportunities and threats, throughout the organisation

Risk Management

As an exploration business operating in Chile there is clearly an elevated risk which is balanced by potentially greater rewards. The Board is mindful of and monitors both its corporate risks and individual project risks. Risks are categorised by both probability and impact and appropriate measures identified to monitor and mitigate any potential impact.

Project risks are dealt with on a case by case basis and monitored through the life cycle of the project as risks change and new risks appear. Project risks and mitigation will be part of regular project management meetings. The project manager for any given project will have responsibility for maintaining the project risk register.

The Company’s corporate risks, risk monitoring, and risk management procedures are regularly reviewed by the Risk Committee and the Company’s risk register updated as necessary. The Company Secretary will have responsibility for maintaining the corporate risk register. The Risk Committee Chairman will be responsible for ensuring the risk register is regularly reviewed and will report on status and updates at Board meetings.

5. 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 too, 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.

Compliance

The Board is comprised of a Chairman, a Non-Executive Director. The roles of the Chairman and Chief Executive Officer are clearly separated. The Chief Executive is responsible for the operational management of the business of the Group and for the implementation of strategy and policies as agreed by the Board.

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. The non-executive director (being Jeff Williams) is considered by the Board to be independent of management and free to exercise independence of judgement. The chairman is involved in daily discussion and decisions of the ongoing activities and management of the company.

A description of the roles of the Directors is included within the Board of Directors page of this website. Profiles of the board of directors and management: https://herenciaresources.com/company/board-management/

The directors recognise that its is expected that AIM companies will have a minimum of two non-executive directors and are proactively seeking the appointment of a second non-executive director.

Meetings of the Board

The board discussed matter daily via email the telephone. Board meeting are held at least 6 times per year. The company has a small team who work very closely together. Since the change in management in May / June 2018 all directors have attended all meetings of the board.

Profiles of the board of directors and management: https://herenciaresources.com/company/board-management/

6. Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities

The Company operates in complex and challenging technological and geographical areas and the Board is mindful that in order to deal effectively with the challenges of the business and to maximise its growth opportunities it has to incorporate a broad range of skills and diversity.

The board has 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 challenges its own diversity, including gender balance, as part of its composition, and recognises the requirement to appoint a second non-executive director.

Profiles of the board of directors and management: https://herenciaresources.com/company/board-management/

The directors have extensive international experience in finance and natural resources. The company support ongoing education and training of directors and its management. The directors are members of both UK and International professional organisations, and through regular training courses ensure they keep their skills and knowledge up to date.

The company secretary is a qualified solicitor in England and partner of the firm Bishop & Sewell in London. The company secretary is required as part of the professional standards of the Law Society of England and Wales to attend ongoing training and professional courses.

As noted above, the Company has put in place an Audit Committee as well as Remuneration and Nomination Committees. The responsibilities of each of these committees have been summarised within this webpage.

7. Evaluate board performance based on clear and relevant objectives, seeking continuous improvement

Application

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.

Compliance

The Company undertakes regular monitoring of personal and corporate performance using agreed Key Performance Indicators and detailed financial reports. Responsibility for assessing and monitoring the performance of the Executive Directors lies with the Chairman and the Non-Executive Directors. Following the recent change in management the company, a review of the board and its past performance was completed. The review identified areas in which the board which the board needed to focus (in particular finance and reporting its Annual and Half Year Reports on time).

The board has taken immediate measured to improve the deficiency in this area.

Ongoing evaluations will be completed as follows:

Board Evaluation

Review:	Period:
Board composition in terms of skills, experience and balance	Annually or as required
Board cohesion	Annually or as required
Board operational effectiveness and decision making	Annually
Board meetings conduct and content and quality of information	Annually or as required
The Board’s engagement with shareholders and other stakeholders	Annually
The corporate vision and business plan	Annually

Committee Evaluation

Review:	Period:
Board Committees’ composition in terms of skills, experience and balance	Annually or as required
Board Committees’ Terms of Reference	Annually
Board Committees’ effectiveness	Annually

Individual Director Evaluation

Review:	Period:
Executive Director performance in executive role	Annually
Executive Director performance and contribution to the Board	Annually
Non-Executive Director performance and contribution to the Board	Annually
Non-Executive Director’s independence and time served	Annually
All Directors’ attendance at Board and Committee meetings	Annually

The board discusses succession planning at board meetings. As part of these discussions the board considers the skills & diversity of the existing board members. The board will consider the appointment of persons whose skills and diversity would compliment the current board members and brings new skills and knowledge to the company.

8. Promote a corporate culture that is based on ethical values and behaviours

Application

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.

Compliance

Herencia Resources plc has a strong ethical culture, which is promoted by the actions of the board and executive team. The Group has an anti-bribery policy and has implemented adequate procedures described by the Bribery Act 2010. The Group reports on its compliance to the board on an annual basis. The Group has undertaken a review of its requirements under the General Data Protection Regulation, implementing appropriate policies, procedures and training to ensure it is compliant.

The board also encourages all employees adopt such values through an appraisal process linked to performance.

9. Maintain governance structures and processes that are fit for purpose and support good decision-making by the board

Application

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.

Compliance

Details of the Company’s corporate governance arrangements are provided within this Corporate Governance section of the website.

Audit Committee

The Audit Committee is chaired by Carl Dumbrell, and also comprise Jeffrey Williams. It oversees and reviews the Company’s financial reporting and internal control processes, its relationship with external auditors and the conduct of the audit process together with its process for ensuring compliance with laws, regulations and corporate governance. The Company’s external auditors will be invited to attend meetings of the Committee on a regular basis.

There is currently no internal audit function in view of the size of the Group, although this is kept under annual review.

Terms of reference available Audit Committee.

Remuneration Committee

The Remuneration Committee is chaired by Jeffrey Williams and also comprise Carl Dumbrell. The Remuneration Committee is responsible for establishing a formal and transparent procedure for developing policy on executive remuneration and to set the remuneration packages of individual Directors. This includes agreeing with the Board the framework for remuneration of the Chief Executive, all Directors, the Company Secretary and such other members of the of the Company as it is designated to consider. It is furthermore responsible for determining the total individual remuneration packages of each Director including, where appropriate, bonuses, incentive payments and share options.

The Committee’s policy is to provide a remuneration package which will attract and retain Directors and management with the ability and experience required to manage the Group and to provide superior long-term performance. It is the aim of the Committee to reward Directors competitively and on the broad principle that their remuneration should be in line with the remuneration paid to senior management of comparable companies. There are four main elements of the remuneration package for Executive Directors: base salary, share options, benefits and annual bonus

Terms of reference available Remuneration Committee

Nomination Committee

The Nominations Committee is chaired by Jeffrey Williams and also comprise Carl Dumbrell. The Nominations Committee leads the process for Board Appointments and is responsible for review of the board size, structure and composition (both executive and non-executive) including any potential new applicants to ensure the board contains the right balance of skills, knowledge and experience to manage and grow the business. The Nominations Committee will make recommendations to the Chairman of the Board on any proposed or suggested changes to the Board with a view on the leadership needs of the business including succession planning.

Terms of reference available Nomination Committee

The Chairman is responsible for monitoring of compliance with the terms of reference of the committees. The Chairman is responsible for the overall governance and compliance of the company of the Companies Act, AIM rules and policies and procedures adopted by the company.

The CEO is responsible for implementation of the straggly and governance policies adopted by the company.

The board reviews the compliance of the policies of the company at its board meetings. The board also evaluates the companies governance framework work at board meetings, considering any changes to AIM rules and other regulatory frameworks.

10.Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders

Stakeholder Communication

The Board is committed to maintaining good communication and having constructive dialogue with all of its stakeholders, including shareholders, providing them with access to information to enable them to come to informed decisions about the Company. The Company’s website provides all required regulatory information as well as additional information shareholders may find helpful including: Share Services, information on Board Members, Advisors and Significant Shareholdings, a historical list of the Company’s Announcements, its Financial Calendar, Corporate Governance information, the Company’s publications including historic Annual Reports and Notices of Annual General Meetings, together with Share Price information and interactive Charting facilities to assist shareholders analyse performance.

Results of shareholder meetings and details of votes cast will be publicly announced through the regulatory system and displayed on the Company’s website with suitable explanations of any actions undertaken as a result of any significant votes against resolutions.

Information on the work of the various Board Committees and other relevant information are included in the Company’s Annual Report.