Corporate governance
We recognise that strong corporate governance is essential to support the long-term sustainable growth of the business and that the Board is accountable to the Company’s Shareholders for its governance, which is critical to business integrity and maintaining investors’ trust. You can read more in the latest Corporate Governance report here.
Governance Documents
On Thursday 29 June, Ceres graduated from AIM to the Main Market of the London Stock Exchange. This page is undergoing updates to reflect disclosure requirements commensurate with Main Market Listing.
We recognise that strong corporate governance is essential to support the long-term sustainable growth of the business and that the Board is accountable to the Company’s Shareholders for its governance, which is critical to business integrity and maintaining investors’ trust. The following table sets out how Ceres complies with each of the 10 principles of the updated 2018 Quoted Companies Alliance Corporate Governance Code (the 2018 QCA Code).
- Principle 1
- Principle 2
- Principle 3
- Principle 4
- Principle 5
- Principle 6
- Principle 7
- Principle 8
- Principle 9
- Principle 10
Strategy and business model which promote long-term shareholder value
Ceres is a world-leading technology company with the capability to deliver clean, scalable, combustion-free power.
Our growth strategy is driven by licensing our technology to global OEM partners, and generating royalties as those partners achieve full-scale commercialisation. We therefore benefit from an asset-light business model with a favourable margin.
Just as climate change and its threats are now being recognised by governments worldwide, so fuel cell technology is regarded as a key asset in mitigating the causes of climate change and air pollution. Our Ceres SteelCell™ product is a solid oxide fuel cell (SOFC) – a technology that has multiple applications providing decentralised electricity for offices, homes and powering datacentres as well as for electric vehicles.
The Company has significantly strengthened its balance sheet in the past year, raising more than £100 million from strategic and institutional investors. This places us in a strong position of being well-funded for our investment plans and frees the management team to focus on our strategy for growth.
The Board embodies and promotes a corporate culture based on sound ethical values and behaviours from the top down, and this guides the Group’s objectives and strategy. For more on Corporate Governance please click on the link below.
Key drivers
- The Paris Agreement, the push for clean air and leading global corporates are maintaining the momentum towards cleaner, distributed power generation
- The rise of data centres and electric vehicles will increase demand for electricity, while increased renewable generation destabilises the centralised power generation model
- The rapid reduction in cost of renewables, in particular solar and wind, as well as batteries, is accelerating deployment of these technologies far faster than analysts anticipated
- Advancements in the Ceres SteelCell™ technology have opened up opportunities to include sectors that are accelerating their deployment of low-carbon technologies, such as data centres, large corporates and transportation
- As demonstrated in residential field trials, Ceres SteelCell™ is a compelling low-carbon alternative to existing technologies
Shareholder engagement
Ceres actively communicates with its shareholders with public announcements and press releases through the London Stock Exchange’s Regulatory News Service (RNS), analyst briefings, face-to-face meetings with significant institutional shareholders, presentations at investor conferences and press interviews. Investors are encouraged to participate at the Annual General Meeting and any General Meetings.
Shareholders are welcome to make contact with the Company and wherever possible their concerns or questions are responded to by a Director in person. In particular the Senior Independent Director Julia King and CFO Eric Lakin would be happy to deal with any shareholder queries.
Stakeholder and social responsibilities
Ceres recognises the importance of and that its long-term success depends in great part on its relationship with various stakeholder groups including its employees, suppliers, customers and regulators. The Board acting through HR, procurement, the operations team, its advisers and the Employee Engagement Director (currently Trine Borum Bojsen, Non-Executive Director), considers and acts on stakeholder feedback. This overlaps with principle 4.
Additionally, the development of the Company’s SteelCell™ technology shows our commitment to a cleaner and greener environment.
Effective risk management
The Directors acknowledge their responsibility for establishing and maintaining the
Group’s systems of internal control. These are designed to safeguard the assets of
the Group and to ensure the reliability of financial information for both internal and
external use. The Group prepares detailed budgets and cash flow projections, which
are approved annually by the Board and updated regularly throughout the year.
Detailed management accounts and working capital cash flow projections are
prepared on a monthly basis and compared to budgets and projections to identify
any significant variances. The Board reviews, identifies, evaluates and manages the
significant risks that face the Group. Any system of internal control can only provide
reasonable, and not absolute, assurance that material financial irregularities will be
detected or that risk of failure to achieve business objectives is eliminated.
Directors’ up to date experience, skills and capabilities
The Board comprises nine Directors: the Non-Executive Chair, the Senior Independent Director, five other Non-Executive Directors, the Chief Executive Officer and the Chief Financial Officer. The Board considers that Warren Finegold, Tudor Brown, Trine Borum Bojsen, Aidan Hughes and Julia King are independent in accordance with the recommendations of the QCA Code and are independent of management and free of any relationship or circumstance which could materially influence or interfere with, or affect, or appear to affect, the exercise of their independent judgement. It is the opinion of the Board that Mr Glock and Mr Hao are not independent according to the QCA Code as they are nominees of Bosch and Weichai Power respectively. Caroline Brown and Karen Bomba are due to join the Board as Non-Executive Directors with effect from 1 June 2023.
The Company’s articles of association require that all Directors are subject to annual re-election by shareholders at each Annual General Meeting (‘AGM’).
The Company maintains directors’ and officers’ liability insurance cover, the level of which is reviewed annually.
Board performance evaluation and succession planning
Externally facilitated board evaluations take place every three years and internally each year. Collectively and individually, the Directors monitor Board and Directors’ performances on a range of measures and KPIs which align with a Company of its size and at its stage in its journey.
The Board agrees that the Chair continues to provide strong and effective leadership. It further agrees that it has the right balance of skills, experience and independence to evolve strategy and that it works effectively as a team.
The Board and Non-Executive Directors make a point of visiting the two UK Company sites, holding meetings with senior management and tracking progress against KPIs, identifying potential risks and reputational issues with a view to ensuring that the Company remains on track to grow and deliver in its market and maximises shareholder value.
The Committees also carry out their own annual internal evaluations taking into consideration their terms of reference which in the past year confirmed that their compositions, skills and experience are still considered effective for understanding and supporting the Company to implement its commercial strategy.
An external Board effectiveness review was conducted in 2021 which considered the culture and composition of the Board, which was deemed to be healthy with a robust and balanced set of skills and experiences. It also considered areas including strategy, risk and risk management and the effectiveness of Board meetings and committees. Recommendations to maintain and enhance the effectiveness of the Board were enacted during 2022 along with an internal evaluation which identified further actions to be implemented during 2023.
The Board recognises the benefits that diversity brings and actively considers it in succession planning, which the Remuneration and Nominations Committee continuously reviews.
The Board received updates on AIM rules, GDPR and other governance, regulatory and financial matters as published during the year.
Ethical values and behaviours
Statement of Compliance with Criminal Finances Act 2017
As a Company, we value our reputation for ethical behaviour and for financial probity and reliability. We recognise that over and above the commission of any crime, any involvement in the facilitation of tax evasion will also reflect adversely on our image and reputation.
We do not tolerate tax evasion, or the facilitation thereof in any circumstances, whether committed by or facilitated by a client, personnel or associated persons/companies.
We are committed to working towards preventing tax evasion and have rigorous policies and procedures in place to detect and prevent the facilitation of tax evasion offences.
We provide training to appropriate personnel on the requirements of the Criminal Finances Act 2017.
We require all personnel to demonstrate the highest standards of honesty at all times and appropriate disciplinary action will be taken wherever tax evasion or the facilitation thereof by any personnel has been proven.
We undertake due diligence on all associated persons/companies to mitigate the risk of facilitation of tax evasion offences and, as part of our due diligence procedures, all agreements with third parties contain suitable provisions to enable termination of such agreements where associated persons/companies are not complying with the provisions of the Criminal Finances Act 2017.
Governance structures and decision making
Roles and Responsibilities
The Chair
Warren Finegold is the Company’s Chair appointed in June 2020. The role of the Chair is to lead and manage the business of the Board to provide direction and focus, while ensuring that there is a clear structure for the effective operation of the Board and its Committees. They set the agenda for Board discussions to promote effective and constructive debate and to support a sound decision-making process, ensuring that the Board receives accurate, timely and clear information, in particular about the Company’s performance.
The Chair and the Chairs of the Board committees communicate regularly with the CEO and other Board and committee members. The Company is very clear that there is a division of responsibilities between the role of Chair and the CEO.
The Chief Executive Officer
Phil Caldwell is the Company’s CEO appointed in September 2013. The CEO is responsible for the executive management of the Company’s operations in charge of the management team and to whom all other executive managers’ report. The CEO is answerable to the Board for the way the business is run and its performance.
The Senior Independent Director
Julia King was appointed Senior Independent Director (SID) with effect from 18 May 2023 and is the Point of Contact for whistle-blowers in the Company.
The SID is available as an additional point of contact for shareholders and leads the non-executive directors who are responsible for assessing the performance of the Chair, taking into account the views of executive directors. The SID’s role is to act as a sounding board for the Chair and a trusted intermediary for the other Directors.
The Company Secretary
Deborah Grimason was appointed Company Secretary with effect from January 2022. Under the direction of the Chair, the Company Secretary’s responsibilities include ensuring good information flows within the Board and its committees and between senior management and non-executive directors, as well as facilitating induction and assisting with professional development as required. The Company Secretary is responsible for advising the Board through the Chair on all governance matters. All directors have access to the advice and services of the Company Secretary, who is responsible to the Board for ensuring that Board procedures are complied with.