Corporate Governance

As a private company, Stemcor is not required to comply with the provisions of the Combined Code. However, the board of directors is committed to the principles of openness, integrity and accountability embodied in the Code and complies with those aspects which it considers relevant to the Group’s size, circumstances and future aspirations.

Board of Directors

The Board, now comprising thirteen executive members and one non-executive member, is responsible for the overall performance of the Group.

The executive chairman is responsible for overseeing the running of the Board, ensuring that no individual or group dominates the Board’s decision making and ensuring that the non-executive director is properly briefed. The non-executive director is considered by the Board to be independent of management and free of any relationship which could materially interfere with the exercise of his independent judgement.

The Board meets three or four times a year to discuss key areas of the Group’s affairs, including operational and financial performance, risk management and the decisions and recommendations of the various Board committees.

The Board delegates specific responsibility to Board committees, which all operate within written terms of reference.

Committees of the Board

Management Committee

The main committee of the Board is the Management Committee, which is responsible for enhancing the efficiency and quality of operational decision-making within the Company and providing a forum for discussing and recommending to the Board, and, if approved, implementing, strategic and other business initiatives for the Company. The Management Committee consists of the executive chairman (Chair), the deputy chairman, the group managing directors, the finance director and the director for North America. It meets at least once every two weeks, often weekly, by telephone conference call. At these meetings there is a discussion on the market and commercial policies and attention is focused on specific problem areas or policy changes.

Remuneration Committee

The Remuneration Committee comprises the executive chairman (Chair), finance director, non-executive director and HR Director. It meets at least twice a year to review matters relating to remuneration policy, share options, performance-related pay schemes and executive directors’ rewards.

All executive directors are employed on a rolling contract basis with no more than 12 months’ notice. Their remuneration package consists of:

• A basic salary, subject to annual review, reflecting the individual director’s experience and responsibilities;
• An annual discretionary bonus which takes account of both individual performance and the Group’s results after charging for the use of shareholders’ funds;
• Benefits in kind;
• A non-contributory pension scheme related to basic salary; and;
• Share options – the Company operates various share option schemes.

Benefits in kind for executive directors are essentially the same as those awarded to senior permanent employees in the locations where each respective executive director is employed.

Audit Committee

It is the Board’s responsibility to establish systems of internal financial control. To the extent permitted by law, this responsibility is delegated to the Audit Committee. The members of the Audit Committee are the non-executive director (Chair) and the finance director. The Audit Committee is responsible for the relationship with the Group’s external auditors (currently Deloitte LLP) and the review of the Group’s financial reporting and internal controls. It also reviews the independence and objectivity of the external auditors. The Committee meets at least twice a year. The Group internal auditor reports to this committee.

Investment Committee

The investment Committee meets under the chairmanship of the trade finance director whenever a new investment proposal is being considered. Its other members are the executive chairman, the finance director and the Group general counsel. It has authority to approve investments up to the value of GBP3 million. Investments of a higher value are referred by the Investment Committee to the main board with a recommendation to proceed or not.

Risk Committee

The Risk Committee is made up of seven Board members representing business units and the Group’s legal and financial operations, together with a structured finance specialist. It is chaired by the risk director and meets on a monthly basis.  It is charged with overseeing the management of all business risks across the Group with a particular view to ensuring that mitigating actions are being performed and overall risks are minimised. It covers supplier prepayment limits, customer trading and credit limits, unsold position limits, significant projects and structured trade finance deals. The Committee sets risk exposure limits (where appropriate) in line with the Group’s risk appetite as laid down by the main Board.

Capital Raising Committee

The Capital Raising Committee comprises the executive chairman (Chair), the Group treasury director, the finance director, the Group financial controller, the Group general counsel, the communications director and one of the Group managing directors. It is entrusted with raising equity or debt capital for the Group.

Compliance Committee

The Compliance Committee was established following the recommendations of, inter alia, the Woolf Report to encourage the highest standards of business dealings and business ethics within the Group. Its members are: the Group general counsel (Chair), executive chairman, finance director, company secretary and director for the Middle East and South Asia. The remit of the Committee is to consider matters of corporate governance including good business practice, anti money laundering procedures, compositions of boards of subsidiaries and dissemination of information about laws and regulations.

IT Committee

The IT Committee comprises the executive chairman (Chair), Group treasury director, Group IT director and three senior members of the Group IT function. It is responsible for the implementation of a new ERP system.

Internal controls

It is the Board’s responsibility to establish systems of internal financial control. Although no system of internal financial control can provide absolute assurance against material misstatement or loss, the Group’s systems are designed to provide reasonable assurance that problems are recognised on a timely basis and dealt with accordingly.