Corporate Governance

The Board of Directors (the “Board”) recognizes that good corporate governance is of fundamental importance to the success of Cornish Metals  ("Cornish" or the “Company”). The Board is committed to sound corporate governance practices, both in the interests of its shareholders and to contribute to effective and efficient decision-making.

The Canadian corporate governance guidelines applied by the Company 

As a result of being incorporated under the federal laws of Canada, its listing on the TSX-V and being a reporting issuer in the Canadian provinces of British Columbia, Alberta and Ontario, the Company is subject to, among other laws and regulations, the CBCA, the TSX-V Rules and certain instruments and policies published by the Canadian Securities Administrators. These instruments and polices include NI 58-101, NP 58-201 and NI 52-110.

As the Company is a TSX-V listed issuer, the TSX-V Rules generally require the Company to comply with, among other things, NI 58-101, NP 58-201 and NI 52-110. NI 58-101 prescribes certain corporate governance disclosure requirements with which the Company is required to comply. NP 58-201, on the other hand, is a set of corporate governance focused guidelines (the “Canadian Guidelines”), which are not prescriptive and with which the Company is not bound to comply. NI 52-110 prescribes certain rules applicable to the audit committees of all reporting issuers in Canada.

Accordingly, the Company has established corporate governance practices and processes (the “Corporate Governance Standards”) it believes are appropriate for a publicly listed company of its size, industry and stage in business development and taking into account the requirements applicable to the Company under, among other laws and regulations, the CBCA, the TSX-V Rules, NI 58-101, NP 58-201 (as deemed by the Directors to be appropriate for the Company) and NI 52-110. While the Company had taken efforts to ensure the Corporate Governance Standards largely comply with the Canadian Guidelines established under NP 58-201, there are certain portions of the Canadian Guidelines which are not currently considered suitable for the Company. Therefore, not all of the Canadian Guidelines have been adopted and applied by the Company.

The general extent to which the Company’s Corporate Governance Standards will, following Admission, comply with, or depart from, the Canadian Guidelines is outlined below.

(a)    Management supervision by the Board
Although the Canadian Guidelines recommend that independent directors hold regularly scheduled meetings where management and non-independent directors are not represented, the Company considers that management is effectively supervised by the independent Directors on an informal basis. The size of the Company is such that all the Company’s operations are conducted by a small management team which is also represented on the Board and the independent Directors are actively and regularly involved in reviewing and supervising the operations of the Company and have regular and full access to management. The independent Directors are able to meet at any time without management or non-independent Directors being present. Further, the independent Directors meet from time-to-time with the Company’s auditors without management being in attendance. 

(b)    Board mandate and position descriptions 
The Board has adopted a policy on board mandate and audit committee organization in accordance with the Canadian Guidelines. The board mandate and committee organization policy explicitly acknowledges responsibility for the stewardship of the Company, and details position descriptions of the chair of the Board, the chair of the audit committee and the Chief Executive Officer. 

(c)    Orientation and continuing education 
The Canadian Guidelines recommend that the Board ensures that all new directors receive comprehensive orientation and provides continuing education opportunities for directors. The Board takes the following steps to ensure that all new directors receive orientation regarding the role of the Board, its committees and directors, and the nature and operations of the Company: 

• an assessment is made of the new director’s set of skills and professional background. This allows the orientation to be customised to that director’s needs since different information regarding the nature and operations of the Company’s business will be necessary and relevant to each new director. Once this is determined, one or more of the existing directors, who may be assisted by the Company’s management, provide the new director with the appropriate orientation through a series of meetings, telephone calls and other correspondence;
• technical presentations are conducted at most Board meetings to ensure that the directors maintain the skills and knowledge necessary for them to meet their obligations as directors of the Company. All Board members are encouraged to communicate with management, auditors and technical consultants; to keep themselves current with industry trends and developments and changes in legislation with management’s assistance; and to attend related industry seminars and visit the Company’s operations.

Further, Board members have full access to the Company’s records. 

(d)    Ethical business conduct 
The Board views good corporate governance as an integral component to the success of the Company and to meet responsibilities to Shareholders. The Board has responsibility for the stewardship of the Company including responsibility for strategic planning, identification of the principal risks of the Company’s business and implementation of appropriate systems to manage these risks. In addition, the Board is responsible for succession planning and the integrity of the Company’s internal controls. The Board seeks to foster a culture of ethical conduct by striving to ensure that the Company conducts its business in line with high business and moral standards and applicable legal and financial requirements.

In light of the Canadian Guidelines, the Board:

• encourages management to consult with legal and financial advisers to ensure that the Company is in compliance with legal and financial requirements;
• is aware of the Company’s continuous disclosure obligations and reviews prior to their distribution such material disclosure documents including, but not limited to, the interim and annual financial statements and management’s discussion and analysis of the financial statements;
• relies on its audit committee to review and discuss the Company’s systems of financial controls with the external auditor;
• actively monitors the Company’s compliance with the Board’s directives to ensure that all material transactions are reviewed and authorised by the Board before being undertaken by management;
• has adopted a whistleblower policy which establishes procedures for confidential, anonymous submission of any concerns which employees may have regarding questionable accounting or auditing matters;
• has, in accordance with the Canadian Guidelines, adopted a written code of business conduct and ethics designed to promote integrity, and which establishes the standards and values which the Company expects its directors, officers and employees to follow in their dealings with stakeholders;
• has adopted an anti-bribery and anti-corruption policy to ensure that its directors, officers, employees and consultants adhere to anti-corruption laws affecting their activities;
• has adopted a corporate disclosure and insider trading policy, further details of which are set out in paragraph [19] of this Part II of this document; and
• has adopted an environmental policy, confirming the Company’s commitment to the development, implementation, maintenance and continual improvement of the Company’s environmental health and safety programme.

In addition, the Board must comply with the conflict of interest provisions of the CBCA in addition to applicable Canadian securities laws and the TSX-V Rules, in order to ensure that the Directors exercise independent judgement in considering transactions and agreements in respect of which a Director or executive officer has a material interest.

(e)    Nomination of Directors
At the Company’s present stage of development, the Board does not believe that a separate nominations committee is required, which is a departure from the Canadian Guidelines. Accordingly, the Board currently assumes responsibility for identifying potential Board candidates

(f)    Board assessments 
The Board will conduct informal annual assessments of the Board’s effectiveness, the individual directors and its audit and remuneration committees. Based on the Company’s size, the number of individuals serving on the Board and on its audit and remuneration committees, and the nature of the relationships among the Board members, the Board has determined that regular, formal assessments are not required at the present time, which is a departure from the Canadian Guidelines. 

The additional QCA corporate governance guidelines adopted by the Company after Admission to AIM

The QCA has published the QCA Code, a set of corporate governance guidelines, which include a code of best practice for growing UK companies, comprising principles intended as a minimum standard, and recommendations for reporting corporate governance matters.

With effect from Admission, the Board, in addition to the Canadian Guidelines, has regard to the recommendations set out in the QCA Code (and, where appropriate, the Remuneration Committee Guide published by the QCA) concerning the roles and responsibilities of directors, the independence of directors, the establishment and work of the remuneration committee and the appointment of new Directors and succession planning.

In particular, the Board intends to:

• follow the QCA’s guidance in terms of the assessment of the independence of, and the number of independent non-executive directors;
• operate an audit committee in line with instrument, NI 52-110, which sets forth rules applicable to the audit committees of reporting issuers in Canada;
• reconfigure its existing compensation committee as a remuneration committee and operate that committee in accordance with the QCA Code (and, where appropriate, the Remuneration Committee Guide published by the QCA);
• require the Board to consider the principles of the QCA Code on matters of nomination and succession in addition to its board and executive officer diversity policy and guidelines for the composition of the board of directors; and
• put in place letters of appointment for its chairman and non-executive directors which follow the general principles in the QCA Code on the roles and responsibilities of non-executive directors.