Corporate Governance Statement

Last updated 30 June 2021

The Board collectively recognises that implementing an effective corporate governance structure is of paramount importance to continue to deliver the Company’s strategy, create long-term value and maintain our licence to operate. In 2018, the Company elected to adopt and comply with the Quoted Companies Alliance Corporate Governance Code (“QCA Code”), to support a flexible and pragmatic approach to corporate governance regulations as being more appropriate for Bushveld.

The principles of the QCA Code are set out below, supplemented with details of how the Company is applying them and how the principles support the Company’s medium- to long-term success.

Deliver Growth

Principle 1:

Establish a strategy and business model that promotes long-term value for shareholders

Bushveld Minerals’ business strategy revolves around unlocking the value of assets in its diversified vanadium product portfolio and delivering returns to shareholders through effective management and efficient operations.

The strategy is clear and supported by a compelling investment case, both of which are fully described in various sections within the Business Overview of this report.

The overriding objective of the Board is to direct the business to ongoing success in delivering long-term shareholder value. To achieve this, an operating model has been adopted that defines how to deliver and execute the strategy by defining the structures in which to operate and the capabilities required.

Principle 2:

Seek to understand and meet shareholder needs and expectations

The Board is committed to providing effective communication with shareholders and attaches great importance to delivering clear and transparent information on the Company’s activities and strategy.

The Bushveld Minerals Investor Relations team is dedicated to communicating the Bushveld Minerals value proposition to both institutional and private investors, as well as the broader market. This is successfully achieved through active engagement with investors, research analysts and journalists via a combination of investor roadshows, proprietary webinars, attendance at conferences focused on the mining and energy storage sectors and engagement with selective media. These engagements are key as they provide valuable feedback in the Board’s decision-making process and determine how the Company can best meet shareholder expectations.

The Board views the Annual General Meeting (“AGM”) as the main forum for communicating directly with investors and it is attended by the Directors, in person (where circumstances allow) or via teleconference, who are available to answer any questions raised by shareholders. At the AGM, various resolutions are proposed and voted on by the shareholders, either by attending the meeting or appointing a proxy to vote on their behalf. The results of the voting are released to the market as soon as practicable after the AGM has closed.

Significant developments and regular operational updates are disseminated through stock exchange announcements via the Regulatory News Service (“RNS”) and can be

found on the Company’s website at http://www.bushveldminerals.com/regulatory-news-rns/ . The website also has a wealth of information for existing and potential shareholders, including a corporate video, project descriptions, investor presentations, financial and technical reports, analyst research, webcasts and certain shareholder information.

Any shareholder enquiries can be directed to info@bushveldminerals.com

Principle 3:

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

Bushveld Minerals recognises that successful execution of its business strategy requires it to build and maintain meaningful, well-functioning relationships with its multiple stakeholders. These include government, regulatory authorities, funders, partners, employees, contractors, customers and, very importantly, the communities in which our projects and operations are based. We see our socio-economic role going beyond the creation of jobs and revenue for South Africa, to acting as an agent for transforming these communities.

More information and detail on this can be found within our Sustainability Report on page 52 of the Annual Report.

Principle 4:

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

The Board has primary responsibility for establishing and maintaining the Company’s governance structures, internal controls and risk-management systems, which are designed to meet the particular needs of the Company and the risks to which it is exposed. The oversight responsibility for reviewing the adequacy and effectiveness of these governance structures, internal controls and risk-management systems has been delegated to the Audit Committee.

A key priority for the Audit Committee during 2019 was to initiate the recruitment process, in conjunction with Human Resources, and conclude the appointment  of the Group Head: Internal Audit and Risk, which was successfully completed in 2020. Pursuant to this appointment, and on recommendation from the Audit Committee, the Board has also formally mandated and given effect to the establishment of the Internal Audit & Risk function by approving the Internal Audit Charter, Internal Audit Manual, Internal Audit Code of Ethics and an Internal Audit Policy. These policies are fully aligned to the Institute of Internal Auditors, International Standards for the Professional Practice of Internal Auditing, consequently the main objectives of the Internal Audit and Risk function is to support Bushveld in accomplishing its objectives by bringing a systematic and disciplined approach to evaluating and improving the Company’s governance, risk management and systems of internal controls. To maintain its independence and objectivity, this role reports functionally to the Chairperson of the Audit Committee and administratively to the Finance Director. While the Board is aware that no system or any one individual can provide absolute assurance against material misstatement or loss, this appointment gives the Directors the required level of assurance that the risks of the Company are being proactively managed.

The Board considers that the frequency of Board meetings and the level of detail presented to the Board for its consideration in relation to the operations of the Company provide an appropriate process to identify, evaluate and manage significant risks relevant to the operations on a continuous basis. This is coupled with the reports received from the Company’s external, independent auditor, via the Audit Committee, on the state of its internal controls and whether any perceived gaps in the control environment require remedial action.

There is currently no internal audit function, however, to align with the Company’s growth trajectory the Audit Committee will be appointing an internal auditor in due course.

Consequent to the appointment of the Internal Audit and Risk role, the development of an enterprise Risk Management Framework (“ERMF”), incorporating Risk Appetite and Tolerance levels, has been expedited. The aim is to approve and implement the ERMF during 2021: Q2/Q3. Notwithstanding, the ongoing development of a formal risk-management framework, the company identifies, evaluates and manages risk throughout its operations and has completed detailed risk assessments, together with risk mitigation strategies. These detailed risk assessments are consolidated and have resulted in the identification of principal risks that could impact the Company’s ability to deliver on its long-term strategic objectives. The principal risks are detailed on page 47 of the Annual Report.

Over and above the work being performed by the Internal Audit and Risk function, the Board considers that the frequency of Board meetings, and the level of detail presented to the Board for its consideration in relation to the operations of the Company, provides an additional process to identify, evaluate and manage significant risks relevant to its operations. Additionally, the reports received from the Company’s external, independent auditor, via the Audit Committee, on the state of Bushveld’s internal controls is of course another valuable tool.

 

Maintain a dynamic management framework

Principle 5:

Maintaining the Board as a well-functioning, balanced team led by the Chair

The 2020 Board consisted of a Non-Executive Chairman (Ian Watson), a Senior Non-Executive Director (Michael Kirkwood), three additional Non-Executive Directors (Jeremy Friedlander, Dolly Mokgatle and Anthony Viljoen) and two Executive Directors (the Chief Executive Officer and the Finance Director, Fortune Mojapelo and Tanya Chikanza, respectively). The Board was of the view that the Chairman and three of the four non-Executive Directors, being Michael Kirkwood, Jeremy Friedlander and Dolly Mokgatle, were deemed to be independent for the purposes of Corporate Governance and are of independent character and judgement.The Board was satisfied that it had achieved a suitable balance between independence, on the one hand, and knowledge of the Company on the other, enabling it to discharge its duties effectively. It was with great sadness that the Board learnt of the untimely passing of Dolly Mokgatle in January 2021 and, as a result, is, through the Nomination Committee, actively searching for a suitably qualified replacement.

The Board holds formal quarterly meetings and meets outside those events as and when necessary. The Executive Directors work full-time for the Company and the expectation is that the Non-Executive Directors will spend approximately 30 days per annum on work for the Company.

The Board met formally four times during the year ended 31 December 2020, with an additional three meetings held to consider matters falling outside of the quarterly cycles. Attendance was as follows:

Ian Watson7
Michael Kirkwood7
Jeremy Friedlander7
Athony Viljoen7
Dolly Mokgatle (appointed 19 March 2020)5
Fortune Mojapelo7
Tanya Chikanza (appointed 1 October 2019)7

The Board is supported by Audit, Remuneration, Nomination and Disclosure Committees which operate within specific terms of reference and are described further in Principle 9 below.

Principle 6:

Ensure that the Directors pool the necessary up-to-date experience, skills, and capabilities

The Directors of Bushveld Minerals have been appointed to the Company because of the varied skills and experience that they offer, as well as their personal qualities and capabilities. Full biographical details of the Directors are included on pages 62 and 63 of the Annual Report, which provides an indication of their breadth of skills and experience. The Board is also able to engage independent advisors should the need arise.

The Board is determined to ensure that it continues to have the right balance of directors. This is a continuous process, with the Nomination Committee regularly reviewing the composition of the Board to ensure that it has the necessary breadth and depth of skills to support the ongoing strategy of Bushveld Minerals. In addition to this, at least one-third of directors retire by rotation and offer themselves for re-election every year, which is voted on by shareholders at the AGM.

The Board is determined to ensure that it continues to have the right balance of Directors. This is a continuous process, with the Nomination Committee regularly reviewing the composition of the Board to ensure that it has the necessary breadth and depth of skills to support the ongoing strategy of Bushveld Minerals. In addition to this, at least one-third of directors retire by rotation and offer themselves for re-election every year, which is voted on by shareholders at the AGM.

As noted above, in March 2020 the Board appointed Dolly Mokgatle, whose extensive expertise in South Africa’s power network, coupled with her in-depth knowledge of energy policy, was considered very valuable for the Company’s energy strategy. In addition, with her corporate experience on numerous company boards over the years, the Company’s governance was strengthened. Since Dolly’s passing, efforts are under way to find a suitable replacement.

Principle 7:

Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement

The Board recognises the importance of regularly reviewing the effectiveness of its performance and the ability of the members to work together to achieve the Company’s objectives, as well as that of its committees and the individual directors.

Responsibility for assessing and monitoring the performance of the Executive Directors lies with the independent Non-Executive Directors, using agreed key performance indicators. Further detail can be found in the Remuneration Report on page 77 of the Annual Report.

The Board as a whole evaluates its own performance internally, and that of the committees, and uses the process to identify opportunities for improvement.

The Nomination Committee is responsible for reviewing the structure, size, and composition (including skills, knowledge, experience and diversity) of the Board and making recommendations to the Board on any changes. Succession planning for Directors and other senior executives is also the responsibility of the Nomination Committee and is front of mind.

Principle 8:

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

Bushveld is committed to the highest standards of transparency, accountability and conducting business in an honest and ethical manner, in accordance with sound governance principles. In building a strong and sustainable governance framework, the Company’s aspiration is to ensure that ethical values and behaviours are fully embedded throughout the Company, supporting the ethical culture of Bushveld. The Board and senior management is fully committed in establishing an honest and ethical culture and is conscious that the tone it sets will impact all aspects of the Group and the way that employees behave and operate.

The Company seeks to ensure that responsible business practices are fully integrated into the management of its operations, which is essential for operational excellence and to deliver Bushveld’s strategy.

Bushveld has the following policies in place:

Conflicts of Interest, Anti-Corruption and Bribery Policy

It is the Company’s policy to conduct all of its business in an honest and ethical manner. We take a zero-tolerance approach to bribery and corruption and are committed to acting professionally, fairly and with integrity in all our business dealings and relationships, wherever we operate. The purpose of this policy is to provide clear guidelines and acceptable practices to all employees to avoid potential and perceived conflicts and interest. The policy further sets out firm rules and regulations regarding the receipt of gifts, entertainment and business courtesies. Bribery and corruption in any form or shape is strongly discouraged and employees found in contravention of these polices may be subject to disciplinary proceedings.

Fraud Prevention and Fraud Investigation Policies

The purpose of these policies is to detail the Company’s expectations with respect to managing fraud-risk, to develop awareness of that risk in the organisation, to provide guidance to those who find themselves having to deal with fraud, and for establishing procedures and assigning responsibility for the investigation of fraud and related offences. These policies are in the process of finalisation.

Whistle-blowing Policy

This policy will help break the cycle of silence and inaction and assist in preventing corruption within Bushveld and the broader public sector in which it operates. The policy is to encourage employees and stakeholders to feel confident in raising breaches and concerns and to ensure that whistle-blowers will be protected from possible reprisals or victimisation,  if disclosures are made in good faith.

Share Dealing Policy

The Company has adopted a policy for dealing in its shares, which incorporates all obligations under both  Rule 21 of the AIM Rules for Companies and Article 19 of the Market Abuse Regulations.

The policy explains the circumstances under which shares in the Company can be bought or sold by Directors and relevant employees, along with the requirements and procedures that have to be followed when dealing in the Company’s shares. In addition to this, the Company has a Memorandum on Inside Information providing additional information on applicable laws and possible sanctions, market-abuse provisions and communication requirements.

Social Media Policy

While the Company recognises the benefits that social media engagement can have in helping it reach out to stakeholders, this policy is in place to facilitate the responsible use of social media and minimise the risks  to the Company through its misuse, which can bring a company into disrepute.

Principle 9:

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

The Board’s role is to provide strategic leadership to the Company within a framework of prudent and effective controls, enabling risk to be assessed and managed.

Matters reserved for the attention of the Board include, inter alia:

  • Board membership and powers, including the appointment and removal of Board members and determining the terms of reference of the Board;
  • Establishing the overall control framework, including the operating model that defines how to deliver and execute strategy by defining the structures in which to operate;
  • Key commercial matters, including the approval of the budget and financial plans, changes to the Company’s capital structure, the Company’s business strategy, acquisitions and disposals of businesses and capital expenditure;
  • The approval of financial statements, dividends and significant changes in accounting practices; and
  • Stock exchange-related issues, including the approval of the Company’s announcements and communications with both shareholders and the stock exchange.

To that end, the Board is supported by committees that have the necessary skills and knowledge to discharge their duties and responsibilities effectively. These committees are primarily made up of Non-Executive Directors. Descriptions of the various committees are provided below.

Audit Committee

The Audit Committee, comprising Michael Kirkwood as chair, Jeremy Friedlander, Dolly Mokgatle (up until 9 January 2021) and Anthony Viljoen, has responsibility for monitoring the integrity of the financial statements of the Company, including its annual and half-yearly reports, interim management statements, preliminary results announcements and any other announcements relating to financial performance before they are presented to the Board for approval. In addition to this, its duties include reviewing and reporting on the Company’s internal financial controls, risk-management initiatives and governance structures.

The Audit Committee is responsible for recommending the appointment of the auditors and reviewing and monitoring their independence and objectivity. The Committee has unrestricted access to the auditors.

To assist the Audit Committee in executing its responsibilities, an Internal Audit and Risk function was established, as described more fully under Principle 4 above.

Meetings are held at least three times a year at appropriate intervals in the financial reporting and audit cycle, and as otherwise required.

The role of the Audit Committee and the duties it fulfilled during 2020 are more fully described in the Report of the Audit Committee on page 75 of the Annual Report..

Upon the appointment of a replacement Independent Non-Executive Director for Dolly Mokgatle, the Audit Committee will again have three members considered independent.

Remuneration Committee

The Remuneration Committee, comprising Michael Kirkwood, as chair, Ian Watson and Jeremy Friedlander, determines the framework for the remuneration of the Company’s Chairman and Executive Directors and, as appropriate, other senior management, including pension entitlements, share-option schemes and other benefits. Remuneration of Non-Executive Directors is a matter for the Board. No Directors or senior managers are involved in any decisions on their own remuneration.

A comprehensive Remuneration Report can be found on page 77 of the Annual Report.

Disclosure Committee

The purpose of the Disclosure Committee is oversight of the implementation of the governance and procedures associated with the assessment, control, and disclosure of inside information in relation to the Company. Ian Watson is Chairman of the Disclosure Committee, with Jeremy Friedlander and Fortune Mojapelo as members.

Nomination Committee

The Nomination Committee is responsible for reviewing the structure, size and composition of the Board, making recommendations to the Board with regard to any changes, succession planning for Directors and senior management, preparing a description of the role and capabilities required for a particular appointment and nominating candidates to fill Board positions as and when they arise. The Committee also makes recommendations to the Board concerning membership of the Audit, Remuneration and Disclosure Committees, in consultation with the Chairman of each of those committees. The Nomination Committee comprises Ian Watson, Michael Kirkwood and Fortune Mojapelo, with Ian Watson as chair.

Principle 10:

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

The Board is committed to providing effective communication with shareholders and attaches great importance to delivering clear and transparent information on the Company’s strategy, activities and financial position.

Results of the Annual General Meeting, significant developments and regular operational updates are disseminated through stock exchange announcements via RNS and can be found on the Company’s website at http://www.bushveldminerals.com/regulatory-news-rns/

The Company’s website has a wealth of corporate information, including a corporate video, project descriptions, investor presentations, financial and technical reports, analyst research, webcasts and certain shareholder information.

As more fully described under Principle 2, the Bushveld Minerals Investor Relations team is dedicated to communicating the Bushveld Minerals’ value proposition to shareholders, as well as the broader market. This is successfully achieved through active engagement with investors, research analysts and journalists via a combination of investor roadshows, proprietary webinars, attendance at conferences and engagement with selected media.

The Head of Investor Relations is the primary point of contact for shareholders and plays a key part in encouraging shareholder interaction and listening to feedback.

Any shareholder enquiries can be directed to info@bushveldminerals.com

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