Corporate Governance Statement
Range Resources Limited
('Range' or 'the Company')
27 September 2019
Corporate Governance Statement and Appendix 4G
Range is pleased to attach the Company's 2019 Corporate Governance Statement and the Australian Securities Exchange ("ASX") Appendix 4G (Key to Disclosures of Corporate Governance Principles and Recommendations), in accordance with ASX listing rules 4.7 and 4.10.3.
This Corporate Governance Statement is current as at 27 September 2019 and has been approved by the Board of the Company.
The Directors of the Company and its controlled entities (the "Group") are committed to achieving and demonstrating robust corporate governance practices which are appropriate for the Group's size and stage of development and which facilitate the long-term performance and sustainability of the Company as well as protecting and enhance the interests of its shareholders.
The Board regularly reviews its governance practices to ensure they remain consistent with the needs of the Group. In addition, the Group monitors developments in governance market practice, expectations and regulations.
The Group complies with the majority of the recommendations set out in the Australian Securities Exchange ("ASX") Corporate Governance Council's Corporate Governance Principles and Recommendations 3rd Edition (the "ASX Principles"). This statement incorporates the disclosures required by the ASX Principles under the headings of the eight core principles. All of these practices, unless otherwise stated, were in place for the entire 2019 financial year and remain in place.
The Group's 2019 Corporate Governance Statement, Appendix 4G and other ancillary corporate governance related documents can be found on the Company's website: www.rangeresources.co.uk.
Principle 1: Lay Solid Foundations for Management and Oversight
1.1 Board of Directors - Role and Responsibilities
The Company has adopted a Board Charter that sets out the specific roles and responsibilities of the Board, the Chair and management and includes a description of those matters expressly reserved to the Board and those delegated to management. The Board Charter sets out the specific responsibilities of the Board, requirements as to the Board's composition, the roles and responsibilities of the Chairman and Company Secretary, the establishment, Directors' access to Company records and information, details of the Board's relationship with management, details of the Board's performance review and details of the Board's disclosure policy. A copy of the Company's Board Charter, which is part of the Company's Corporate Governance Plan, is available on the Company's website.
1.2 Company Board Appointments
The Company's Nomination Committee Charter (in the Company's Corporate Governance Plan) requires the Nomination Committee (or, in its absence, the Board) to ensure appropriate checks (including checks in respect of character, experience, education, criminal record and bankruptcy history (as appropriate)) are undertaken before appointing a person, or putting forward to security holders a candidate for election, as a Director.
When considering the appointment of a new Director, the Board may engage the services of an external executive search firm to identify suitable candidates for consideration and to carry out appropriate reference and background checks.
Under the Nomination Committee Charter, all material information relevant to a decision on whether or not to elect or re-elect a Director must be provided to security holders in the Notice of Meeting containing the resolution to elect or re-elect a Director.
1.3 Terms of Appointment
All Directors of the Company are required to sign a letter of appointment outlining the material terms of their appointment and the key roles based on their experience and skills. The remuneration of the Directors of the Company and Key Management Personnel are outlined in the Remuneration Report in the Company's latest Annual Report.
Under the Company's Constitution, the minimum number of Directors is three. At each Annual General Meeting, one third of the Directors (excluding the CEO) must resign, with Directors resigning by rotation based on the date of their appointment. Directors resigning by rotation may offer themselves for re-election.
The members of the Executive Team have written employment agreements with the Company setting out their key roles, obligations and remuneration. The remuneration is commensurate to the market rate and their experience and skills in the respective field.
1.4 The Company Secretary
The Board Charter outlines the roles, responsibility and accountability of the Company Secretary. In accordance with this, the Company Secretary is appointed by the Board and is responsible for developing and maintaining the information systems and processes that are appropriate for the Board to fulfil its role. The Company Secretary is responsible to the Board for advising on and monitoring compliance with Board procedures and governance matters. The Company Secretary is accountable directly to the Board, through the Chairman, on all matters to do with the proper functioning of the Board. The Company Secretary is also responsible for overseeing and coordinating disclosure of information to the ASX as well as communicating with the stock exchange as appropriate. Each Director is able to directly access the services and advice of the Company Secretary.
The joint Company Secretaries, their qualifications and experience are stated in the Company's latest Annual Report.
The Company recognises that diversity drives the Company's ability to attract, retain, motivate and develop talent, create an engaged workforce, and continue to grow the business. In view of the above, the Board has adopted a Diversity Policy, available on the Company's website.
Whilst the Company notes the ASX Principles and Recommendations, it recognises that the Company has a small team of Directors and employees, and as such the Board has determined that it will not set benchmarks for gender diversity, and will not report against its progress to achieve any measurable objective.
The Company remains committed however, to ensuring that the best candidates both at a Board and employee level are appointed as opportunities arise regardless of gender, beliefs or racial background. The Company believes that while this is departure from the Principles and Recommendations, it does not diminish its commitment to ensuring gender diversity.
Total proportion of men and women on the Board, in senior positions (being Key Management Personnel and decision makers of the Group) and across the whole organisation is listed below:
Senior Management (excluding the CEO captured above)
1.6 Performance Review and Evaluation of Directors
The Company's Nomination Committee (or, in its absence, the Board) is responsible for evaluating the performance of the Board, its committees and individual Directors on an annual basis. It may do so with the aid of an independent advisor. The process for this is set out in the Company's Corporate Governance Plan, which is available on the Company's website.
The Board will disclose, in relation to each reporting period, whether a performance evaluation was undertaken. A formal performance evaluation of each individual Directors was not undertaken during FY2019. It is envisaged that once the Company is of a sufficient size to establish a nomination committee, that committee will be responsible for arranging the performance evaluation of the Board, its committees and individual directors on behalf of the Board.
1.7 Performance and Review and Evaluation of Senior Management
The Company's Nomination Committee (or, in its absence, the Board) is responsible for evaluating the performance of the Company's senior executives on an annual basis. The Company's Remuneration Committee (or, in its absence, the Board) is responsible for evaluating the remuneration of the Company's senior executives on an annual basis. A senior executive, for these purposes, means key management personnel (as defined in the Corporations Act) other than a non-executive Director. The applicable processes for these evaluations can be found in the Company's Corporate Governance Plan, which is available on the Company's website.
The Company's Corporate Governance Plan requires the Company to disclose whether or not performance evaluations were conducted during the relevant reporting period. A formal performance evaluation in respect of the senior executives was not undertaken during FY2019.
Principle 2: Structure the Board to Add Value
2.1 Nomination for Board Appointment
The Company does not have a Nomination Committee. The Company's Nomination Committee Charter provides for the creation of a Nomination Committee (if it is considered it will benefit the Company), with at least three members, a majority of whom are independent Directors, and which must be chaired by an independent Director.
The Company does not have a Nomination Committee as the Board considers the Company will not currently benefit from its establishment. In accordance with the Company's Board Charter, the Board carries out the duties that would ordinarily be carried out by the Nomination Committee under the Nomination Committee Charter, including the following processes to address succession issues and to ensure the Board has the appropriate balance of skills, experience, independence and knowledge of the entity to enable it to discharge its duties and responsibilities effectively:
(i) devoting time at least annually to discuss Board succession issues and updating the Company's Board skills matrix; and
(ii) all Board members being involved in the Company's nomination process, to the maximum extent permitted under the Corporations Act and ASX Listing Rules.
2.2 Skills, Knowledge and Experience
The Board considers the present composition, size and balance in respect of qualifications and experience of the Board to be appropriate and effective for the control and direction of the Group's business. Each Director is expected to bring to the Company their experience and skills in the respective fields, in particular their considerable industry experience, to add value to the performance of the Company.
The table below describes the combined skills, experience and expertise presently represented on the Board.
Combined skills, experience and expertise
Management and Leadership - Business Leadership, Public Listed Company Experience, International Sustainability, Stakeholder Management, Community Relations, Corporate Governance, Human Resources
Business and Finance - Finance Strategy, Competitive Business Analysis, Corporate Financing, Financial Literacy, Mergers and Acquisitions, Risk Management, Tax, Renumeration
Oil and Gas Experience - Technical Knowledge, Relevant Industry Experience, HSE, Reserves and Resources Assessment
The Board Charter requires the disclosure of each Board member's qualifications and expertise. Full details as to each Director and senior executive's relevant skills and experience are available in the Company's Annual Report.
2.3 Director Independence
The Board is currently comprised of one independent non-executive director (Dr Mu Luo) and two executive directors (Mr Zhiwei Gu and Mr Lubing Liu).
Dr Luo was appointed as a director of the Company on 11 January 2019.
Mr Gu was appointed as a director of the Company on 11 December 2014.
Mr Liu was appointed as a director of the Company on 16 June 2016.
A profile of each Director is set out in the Company's latest Annual Report.
The Board's charter provides that where practical, the majority of the Board is comprised of non-executive Directors and that, where practical, at least 50% of the Board will be independent. An independent Director is one who is independent of management and free from any business or other relationship, which could, or could reasonably be perceived to materially interfere with, the exercise of independent judgement. The Board will continue to assess the Company's needs as it grows in size and if appropriate, appoint additional non-executive and independent directors.
2.4 Director Independence
Currently, independent directors do not form a majority of the Board as only Dr Mu Luo is considered an independent director. The Board will continue to assess the Company's needs as it grows in size and if appropriate, appoint additional nonexecutive and independent directors.
The Company does not currently have an independent Chairman. The Executive Chairman assumes the role of Chairman at the Company's board and shareholder meetings. The Board will continue to assess the Company's needs as it grows in size and if appropriate, appoint an additional director to act as Independent Chairman of the Company.
A profile of the Executive Chairman of the Company, Mr Zhiwei Gu is stated in the Company's latest Annual Report.
2.6 Induction and Professional Development
The Company has a process to educate new Directors about the nature of the business, current issues, corporate strategy and the Company's expectations of Directors. All directors are made aware of their rights to access employees, information and resources. Directors are encouraged to visit the Group's locations and meet with management to gain a better understanding of the Group's operations. Directors are given access to continuing education opportunities to update and enhance their skills and knowledge base.
All Directors have unrestricted access to the Company records and information except where the Board determines that such access would be adverse to the Company's interests.
The Board, or individual Directors may seek independent external professional advice as considered necessary at the expense of the Company, subject to prior consultation with the Chairman. A copy of any such advice received is made available to all members of the Board.
Principle 3: Promote Ethical and Responsible Decision-Making
3.1 Code of Conduct
The Company has developed a Code of Conduct (the Code) which has been fully endorsed by the Board and applies to all Directors and employees. The Code is regularly reviewed and updated as necessary to ensure it reflects the highest standards of behaviour and professionalism and the practices necessary to maintain confidence in the Company's integrity. The purpose of the Code is to provide a framework for decisions and actions in relation to ethical conduct in employment. It underpins the Company's commitment to integrity and fair dealing in its business affairs and to a duty of care to all employees, clients and stakeholders.
The Code can be found in the corporate governance section of the Company's website.
Principle 4: Safeguard Integrity in Financial Reporting
4.1 Audit and Risk Committee
The Company does not have an Audit and Risk Committee. The Company's Corporate Governance Plan contains an Audit and Risk Committee Charter that provides for the creation of an Audit and Risk Committee (if it is considered it will benefit the Company), with at least three members, all of whom must be independent Directors, and which must be chaired by an independent Director who is not the Chair.
The Company does not have an Audit and Risk Committee as the Board considers the Company will not currently benefit from its establishment. In accordance with the Company's Board Charter, the Board carries out the duties that would ordinarily be carried out by the Audit and Risk Committee under the Audit and Risk Committee Charter including the following processes to independently verify and safeguard the integrity of its financial reporting, including the processes for the appointment and removal of the external auditor and the rotation of the audit engagement partner:
(i) the Board devotes time at annual Board meetings to fulfilling the roles and responsibilities associated with maintaining the Company's internal audit function and arrangements with external auditors; and
(ii) all members of the Board are involved in the Company's audit function to ensure the proper maintenance of the entity and the integrity of all financial reporting.
4.2 CEO and CFO Declarations
The Company's Audit and Risk Committee Charter requires the CEO and CFO (or, if none, the person(s) fulfilling those functions) to provide a sign off on these terms. The Company intends to obtain a sign off on these terms for each of its financial statements in each financial year.
4.3 External Auditor
The Company's external auditor (Auditor) is selected for its professional competence, reputation and provision of value for professional fees. The Auditor attends the Company's AGMs (in person or by teleconference) and is available to answer shareholders' questions about the conduct of the audit and the preparation and content of the Auditor's Report.
Principle 5: Make Timely and Balanced Disclosure
5.1 Continuous Disclosure
The Company must comply with continuous disclosure requirements arising from legislation and the ASX Listing Rules. The general rule, in accordance with ASX Listing Rule 3.1, is that once the Company becomes aware of any information concerning it that a reasonable person would expect to have a material effect on the price of value of the Company's securities, the Company must immediately disclose that information to the ASX.
The Company has in place a written policy on information disclosure and relevant procedures, which can be accessed at the Company's website.
Principle 6: Respect the Rights of Securityholders
6.1 Market and Shareholder Communications
The Company keeps shareholders and other interested parties informed of performance and major developments via communications through its website. Information about the Company and its governance is available in the Corporate Governance Plan which can be found on the Company's website.
6.2 Investor Relations
The Company has adopted a Shareholder Communications Strategy which aims to promote and facilitate effective two-way communication with investors. The Strategy outlines a range of ways in which information is communicated to shareholders and is available on the Company's website as part of the Company's Corporate Governance Plan.
6.3 Shareholders' Meetings
Shareholders have the ability to communicate with Directors through various means including:
· Having the opportunity to ask questions of Directors at all general meetings;
· The presence of the Auditor at AGMs (in person or by teleconference, as practicable and appropriate) to take shareholder questions on any issue relevant to their capacity as Auditor; and
· The Company making Directors and selected executives available to answer shareholder questions submitted by telephone, email and other means (where appropriate).
Traditionally, the key forum for two-way communication between the Company and its shareholders is its AGM. The Board encourages shareholder participation at the Company's AGM and other general meetings of shareholders, and the Chairman encourages questions and comments from shareholders and seeks to ensure that shareholders are given ample opportunity to participate. Shareholders who are unable to attend the AGM or a general meeting may submit questions and comments before the meeting to the Company and or to the Auditor (in the case of the AGM).
6.4 Electronic Communications
The Shareholder Communication Strategy provides that security holders can register with the Company to receive email notifications when an announcement is made by the Company to the ASX, including the release of the Annual Report, half yearly reports and quarterly reports. Links are made available to the Company's website on which all information provided to the ASX is immediately posted. Shareholders queries should be referred to the Company Secretary in the first instance.
Principle 7: Recognise and Manage Risk
7.1 Risk Committee
The Company does not have an Audit and Risk Committee. The Company's Corporate Governance Plan contains an Audit and Risk Committee Charter that provides for the creation of an Audit and Risk Committee (if it is considered it will benefit the Company), with at least three members, all of whom must be independent Directors, and which must be chaired by an independent Director. A copy of the Corporate Governance Plan is available on the Company's website. The Company does not have an Audit and Risk Committee as the Board considers the Company will not currently benefit from its establishment. In accordance with the Company's Board Charter, the Board carries out the duties that would ordinarily be carried out by the Audit and Risk Committee under the Audit and Risk Committee Charter including the following processes to oversee the entity's risk management framework:
(i) the Board devotes time at quarterly Board meetings to fulfilling the roles and responsibilities associated with overseeing risk and maintaining the entity's risk management framework and associated internal compliance and control procedures; and
(ii) all members of the Board are involved in the Company's risk assessment function and ensure the proper maintenance of the entity and the integrity of all risk management initiatives.
7.2 Internal Control and Risk Management
The Audit and Risk Committee Charter requires that the Audit and Risk Committee (or, in its absence, the Board) should, at least annually, satisfy itself that the Company's risk management framework continues to be sound. The Company's Corporate Governance Plan requires the Company to disclose at least annually whether such a review of the company's risk management framework has taken place. A risk review was not undertaken during FY2019.
7.3 Internal Audit
The Audit and Risk Committee Charter provides for the Audit and Risk Committee to monitor the need for an internal audit function. The Company does not have an internal audit function. Due to its small size, lack of complexity and given that it is in a project exploration phase of its lifecycle, the Company does not currently have an in-house internal audit function. Instead reports and reviews into the effectiveness of internal controls are commissioned as required using internal and external specialist resources. It is expected that the requirement for an internal audit function will be considered by the Board in the future.
7.4 Risk Exposures
The Audit and Risk Committee Charter requires the Audit and Risk Committee (or, in its absence, the Board) to assist management determining whether the Company has any material exposure to economic, environmental and social sustainability risks and, if it does, how it manages or intends to manage those risks. The Company's Corporate Governance Plan requires the Company to disclose whether it has any material exposure to economic, environmental and social sustainability risks and, if it does, how it manages or intends to manage those risks. The Company will disclose this information in its Annual Report and on its ASX website as part of its continuous disclosure obligations.
Principle 8: Remunerate Fairly and Responsibly
8.1 Remuneration and Nomination Committee
The full Board is responsible for the determination of the remuneration of directors and senior executives and ensuring that such remuneration is appropriate and not excessive. Where considered necessary, the Board may engage a remuneration consultant to assist with setting and reviewing the Company's executive and non-executive remuneration policies to ensure the Company attracts and retains executives and Directors who will create value for shareholders. As the Company grows in size, it is planned that the Company will establish a separate remuneration committee with its own remuneration committee charter.
8.2 Remuneration Policy
The Company's policies and practices regarding the remuneration of executive and non-executive directors and other senior executives are disclosed in the Annual Report.
8.3 Group Trading Policy
The Company has established a Group Trading Policy which outlines, among other things, when Directors, senior management and other employees of the Company may deal in the Company's securities. This policy also prohibits key management personnel from entering into certain hedging arrangements of the nature referred to in Recommendation 8.3. For further details, refer to the Group Trading Policy available on the Company's website.
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