About us Corporate Governance
We are committed to applying the updated 2018 Quoted Companies Alliance Corporate Governance Code (the 2018 QCA Code) and its 10 principles from 28th September 2018. We recognise that this 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 Index below sets out how we comply with each of the 10 principles of the code.
The following table sets out how Ceres Power complies with each of the 10 principles of the updated 2018 Quoted Companies Alliance Corporate Governance Code (the 2018 QCA Code).
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 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.
- 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 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, SteelCell™ is a compelling low-carbon alternative to existing technologies
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 Mr Stephen Callaghan and CFO Mr Richard Preston 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 and its advisers considers and acts on stakeholder feedback. In addition the operations team is considering the likely impact of Brexit. This overlaps with principle 4.
Additionally the development of the Company’s SteelCell technology shows our commitment to a cleaner and greener environment.Sustainability
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 the Non-Executive Chairman, the Senior Independent Director, the Chief Executive Officer, Chief Finance Officer and three Non-Executive Directors. The Board considers that the Senior Independent Director and the Non-Executive Directors are independent in character and judgement and meet the criteria for independence set out in the Code. It is noted that one of the Non-Executive Directors is independent although he represents a significant shareholder.
The Company’s articles of association require that all Directors are subject to election by shareholders at the first Annual General Meeting (‘AGM’) following their initial appointment, and at each AGM one-third of the Directors retire by rotation and offer themselves for re-election.
The Company maintains directors’ and officers’ liability insurance cover, the level of which is reviewed annually.Read about our Board
Board performance evaluation and succession planning
External board reviews 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 purposeful 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 regularly visit the Horsham site, 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.
Acting on the conclusions of the external Board effectiveness review in November 2016, the Board has moved from monthly to quarterly meetings to improve the focus of the main plc Board. The Executive Board continues to meet monthly. The Board’s agendas and papers were refined to ensure that it concentrates on the key strategic issues and risks; specifically, those relating to managing conflicts of interest and the move towards commercialisation. The Board recognises that risk is an area that needs further consideration given the changing focus of the Group as it moves closer to commercialisation.
The Board recognises that diversity in succession planning is an area that can be given further consideration. The Nominations and Governance Committee regularly considers succession planning and, in combination with the Remuneration Committee, continually consider senior management retention. In September 2019, Caroline Hargrove was appointed Chair of the Nominations and Governance Committee.
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.Sustainability
Governance structures and decision making
Roles and Responsibilities
Alan Aubrey is the Company’s Chairman appointed in December 2012. The role of the Chairman 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. He sets 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 Chairman and the Chairmen 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 Chairman 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
Stephen Callaghan was appointed Senior Independent Director (SID) with effect from March 2014. He also chairs the Remuneration Committee 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 Chairman, taking into account the views of executive directors. The SID’s role is to act as a sounding board for the Chairman and a trusted intermediary for the other Directors.
The Company Secretary
Tim Anderson was appointed Company Secretary with effect from December 2018. Under the direction of the Chairman, 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 Chairman 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.Board Committees