Corporate > Corporate Governance

Corporate Governance:

The Board of Directors is accountable to the shareholders for the corporate governance of the Group. African Eagle operates in an effective and efficient way, with integrity and with due regard for the interests of all stakeholders. African Eagle follows the principles of corporate governance set out in the QCA Guidelines.

Board of Directors

The Board of African Eagle is responsible for the success of the Group. The Board’s functions are to establish strategic objectives and policies; oversee all aspects of the finances; continuously review performance and controls; manage risk; decide on key business transactions; and manage the interests of stakeholder groups.

The Board currently comprises six members: three executive directors and three non-executive directors. The directors’ varied backgrounds and relevant industry experience give African Eagle a good combination of the knowledge and expertise necessary to manage the business effectively. The structure of the Board ensures that no one individual or group dominates the decision-making process. Directors’ respective responsibilities are shown in the table below.

The Board meets at least four times per year and the meetings are attended by all directors. In addition, a number of meetings are held via telephone and email. The Board together with the Executive, Audit, Remuneration and Exploration Committees, deals with all important aspects of the Group’s affairs. The Non-executive Chairman, Mr Park, is responsible for the leadership of the Board and to ensure effective communication exists between the executive and non-executive directors. The Company Secretary, Mr Metcalf, is responsible for ensuring all Board procedures are followed. Formal agendas and board papers are sent to the directors in a timely fashion prior to board meetings.

In accordance with the Articles of Association, one third of the directors in office must retire by rotation each year and can stand for re-election by the shareholders at the Annual General Meeting.

The non-executive directors are Mr Park, Mr Worthington and Mr Cooper. They have interests in the ordinary shares of the Company and hold share options. The following committees deal with the Group’s affairs and provide experienced and objective advice to the Board.

Executive Committee

The Executive Committee meets monthly and is empowered to take, on behalf of the Board, whatever management action it considers to be necessary to further the strategy, business objectives and targets established by the Board and to safeguard the interests of the Group. The Managing Director, Mr Parker, has been delegated executive responsibility for the Group. The other members of this committee are Mr Metcalf and Mr Davies.

Audit Committee

The Audit Committee ensures the good operation of financial practices throughout the Group; ensures that controls are in place to protect the assets and to ensure the integrity of financial information; reviews the interim and annual financial statements; and reviews all aspects of the audit programme and provision of non-audit services by the auditors. The Finance Director and a representative of the external auditors normally attend meetings of the Audit Committee, which meets at least twice per year. This committee is chaired by Mr Worthington and the other members are Mr Park and Mr Cooper. The members are all non-executives and therefore independent. If issues arise which are deemed outside the areas of expertise of the members, independent expert advice is sought.

Remuneration Committee

The Remuneration Committee normally meets twice per year and is chaired by Mr Cooper. The other members are Mr Park and Mr Worthington.

The main duties of the committee are:

• Set the salaries paid to the executive directors;
• Consider other benefits granted to the executive directors;
• Make recommendations in respect of the terms of the service contracts of the executive directors and any proposed changes to those contracts; and
• Oversee the operation of the Company’s share option scheme.

Being composed of non-executive directors who have no personal interest in the outcome of its decisions, the committee provides some reassurance to the shareholders that the remuneration of the executive directors is fair, but not excessive. Financial packages for executive directors are established by reference to those prevailing in the market place for directors of similar status, skills and qualifications and should be sufficient to attract, retain and motivate directors of the quality required to run the business successfully. The remuneration of non-executive directors, while subject to similar criteria, is governed mainly by the amount of time each non-executive commits to African Eagle.

Exploration Committee

The full Exploration Committee meets at least once per year and comprises the Managing Director, the Operations Director and the Group’s Country Managers. The committee reviews progress and results on the Group’s projects, sets operational priorities and proposes work programmes and budgets for each project. The committee’s recommendations are subject to approval by the Executive Committee and the Board.

Internal Controls

The directors are responsible for establishing and maintaining the Group’s internal controls and for reviewing their effectiveness. Financial, operational and compliance procedures are designed to safeguard the Group’s assets and are regularly reviewed by the Board. The Finance Director visits the overseas operations annually to review the internal controls and to meet the local auditors to review areas of risk. The internal control system is an ongoing process for identifying, evaluating and managing the significant risks faced by the Group. It can only provide reasonable and not absolute assurance against material misstatement or loss. The directors are satisfied that the existing controls are adequate and effective with regard to the size of the Group and the stage of its development.

Communication with Shareholders

The Board recognises that it is accountable to shareholders for the performance and activities of the Group. The Board attaches great importance to maintaining good relations with its shareholders. Market sensitive information is released to all shareholders concurrently in line with stock exchange rules. The Company listed on the Alternative Exchange of the JSE Limited (AltX) in August 2007 and now has a significant number of shareholders based in South Africa. As at 31 March 2008, the Company had approximately 921 shareholders. Extensive information about the Group’s activities is included in this Annual Report and Accounts which are sent to all shareholders. In line with UK legislation, a resolution will be put to the AGM which will allow shareholders to receive the Annual Report electronically in the future.

African Eagle exhibits at conventions such as Mines and Money in London, Indaba in South Africa, Livingstone in Zambia, and presents at investor forums, in order to give shareholders the opportunity to review the Group’s progress and to ask questions of the directors.

The annual report, news releases and other information on African Eagle are available on the Group’s website (www.africaneagle.co.uk). In March 2007, African Eagle’s website became one of the first to comply fully with the new AIM Rule 26, which requires all AIM companies to disclose key prescribed information to investors online before 20 August 2007. The annual report, news releases and other information on African Eagle are available on the Group's website, which is regularly updated.

Going Concern

The directors are aware that the Group will need additional working capital in 2009 to fund the capital costs associated with the Mkushi Copper Project in Zambia as well as other project development finance and future exploration programmes. The directors have a reasonable expectation that they will secure additional resources when required to continue operating for the foreseeable future. For this reason, the directors continue to adopt the going concern basis in preparing the financial statements.