Corporate Governance Statement

RNS Number : 4090C

Range Resources Limited

01 October 2018

 

Corporate Governance Statement

Range is pleased to attach the Company's 2018 Corporate Governance Statement. The Company has chosen to adopt the Corporate Governance Principles and Recommendations (3rd Edition, March 2014) issued by the ASX Corporate Governance Council in respect of the financial year ended 30 June 2018 and complies with the majority of recommendations.

The Company's 2018 Corporate Governance Statement, Appendix 4G (Key to Disclosures of Corporate Governance Principles and Recommendations) and other ancillary corporate governance related documents can also 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 - Roles 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, operation and management of Board Committees, 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.

To assist the Board in carrying out its responsibilities, the following standing Committees of its members have been established:

·     Remuneration and Nomination Committee;

·     Audit and Risk Committee; and

·     Reserves and HSE Committee.

Each Committee has its own Charter that describes the roles and responsibilities delegated to the Committee by the Board, and those Charters are published on Range's website.

The Board delegates responsibility to the CEO for implementing the strategic direction and objectives and managing the day-to-day operations of Range. The CEO consults with the Chairman, in the first instance, on matters that are sensitive, extraordinary or of a strategic nature. The Board has approved specific limits of authority for management with respect to approval of expenditure, contracts and other matters, and regularly reviews those limits.

1.2 Company Board Appointments

Range is committed to upholding the highest standards in corporate governance. Range's corporate governance framework is underpinned by the appointment of high quality Board members.

The Company's Remuneration and Nomination Committee Charter (in the Company's Corporate Governance Plan) requires the Remuneration and Nomination Committee 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 Remuneration and 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 role, 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.

1.5 Diversity

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:

Category	Men	Women	% Women
Board	4	1	20%
Senior Management (excluding the CEO  captured above)	2	-	-
Whole organisation	6	1	20%

1.6 Performance Review and Evaluation of Directors

The Remuneration and Nomination Committee will arrange a performance review and evaluation of the Board, its Committees, and individual Directors. To assist in this process an independent advisor may be used.

The review will include:

·     Comparing the performance of the Board with the requirements of its Charter;

·     Examination of the Board's interaction with management;

·     The nature of information provided to the Board by management; and

·     Management's performance in assisting the Board to meet its objectives.

A similar review will be conducted for each Committee by the Board with the aim of assessing the performance of each Committee and identifying areas where improvements can be made.

No review was undertaken during the Reporting Period, however the Remuneration and Nomination Committee is intending to undertake a comprehensive review in early 2019.

1.7 Performance and Review and Evaluation of Senior Management

The Remuneration and Nomination Committee will oversee the performance evaluation of the executive team. This evaluation is based on specific criteria, including the business performance of the Company and its subsidiaries, whether strategic objectives are being achieved and the development of management and personnel.

No review was undertaken during the Reporting Period, however the Remuneration and Nomination Committee is intending to undertake a comprehensive review in early 2019.

Principle 2: Structure the Board to Add Value

2.1 Nomination for Board Appointment

The Board has established a Remuneration and Nomination Committee. The primary purpose of the Committee is to support and advise the Board in fulfilling its responsibilities to shareholders by:

·    Reviewing and approving the executive remuneration policy to enable the Company to attract and retain executives and Directors who will create value for shareholders;

·    Ensuring that the executive remuneration policy demonstrates a clear relationship between key executive performance and remuneration;

·     Recommending to the Board the remuneration of executive Directors;

·    Fairly and responsibly rewarding executives based on the performance of the Group, the performance of the executive and the prevailing remuneration expectations in the market;

·  Reviewing the Company's recruitment, retention and termination policies and procedures for senior management;

·  Reviewing and approving the remuneration of direct reports to the Chief Executive Officer, and as appropriate other senior executives; and

·     Reviewing and approving any equity based plans and other incentive schemes.

The Remuneration and Nomination Committee has three members, a majority of whom are independent directors, and is chaired by an independent Director.

The composition of Range's Remuneration and Nomination Committee was changed during the Reporting Period (as approved by the Board) and is summarised below:

Committee members (1 July 17 - 25 June 18)	Committee members (25 June 18 - present)
·     Zhiwei Gu, Non-executive Chairman (Chairman of the Committee) ·    Lubing Liu, Executive Director (Member of the Committee)	·  Zhiwei Gu, Non-executive Chairman (Chairman of the Committee) ·     Lubing Liu, Executive Director (Member of the Committee ·     Yi Zeng, Non-executive Director (Member of the Committee)

The Committee held three meetings during the Reporting Period and was attended by all Committee members eligible to attend at the time of the meeting.

The Company's Remuneration and Nomination Committee Charter is available on the Company's website.

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.

Director's Background and Experience	Name of Director who falls within the categories
Finance	Yan Liu, Juan Wang
Oil and Gas Experience	Lubing Liu, Yi Zeng, Yan Liu
Management and Leadership	Zhiwei Gu, Yan Liu, Lubing Liu
Risk Management and Board Governance	Zhiwei Gu, Yan Liu, Juan Wang

In appointing new members to the Board, consideration is given to the ability of the appointee to contribute to the ongoing effectiveness of the Board, to exercise sound business judgement, to commit the necessary time to fulfil the requirements of the role effectively and to contribute to the development of the strategic direction of the Company.

2.3 Director Independence

The composition of the Board is reflected in the table below:

Name	Date First Appointed	Independent
Zhiwei Gu	11 December 2014	Yes
Yi Zeng	16 June 2016	Yes
Juan Wang	30 November 2014	No (due to being a shareholder representative)
Yan Liu	11 December 2014	No (due to being an Executive Director)
Lubing Liu	16 June 2016	No (due to being an Executive     Director)

A profile of each Director is set out in the Company's latest Annual Report.

2.4 Director Independence

The Company's Board has 5 Directors, including 2 independent Non-executive Directors (including the Chairman).

Whilst the Company notes the ASX Principles and Recommendations stating that the majority of the Board of Directors should be independent Directors, the Company believes that this departure does not diminish its commitment to ensuring the Board composition is appropriate and effective for the control and direction of the Group's business.

2.5 Chairman

The Board Chairman is responsible for the leadership, operations and governance of the Board and Board Committees. The Chairman shall also undertake the role as leader in chairing all Board and shareholder meetings.

A profile of the Chairman of the Company, Zhiwei Gu is stated in the Company's latest Annual Report. Zhiwei Gu is an independent Non-executive Director. The Company has a separate CEO.

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, Committees 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 Board has established an Audit and Risk Committee. The primary purpose of the Committee is to assist the Board in fulfilling its statutory and fiduciary responsibilities relating to:

·     The quality and integrity of the Company's financial statements, accounting policies and financial reporting and disclosure practices;

·     Compliance with all applicable laws, regulations and Company policy;

·     The effectiveness and adequacy of internal control processes;

·     The performance of the Company's external auditors and their appointment and removal;

·     The independence of the external auditor and the rotation of the lead engagement partner;

·    The identification and management of business, economic, environmental and social sustainability risks; and

·    The review of the Company's risk management framework at least annually to satisfy itself that it continues to be sound.

The composition of Range's Audit and Risk Committee was changed during the Reporting Period (as approved by the Board) and is summarised below:

Committee members (1 July 17 - 25 June 18)	Committee members (25 June 18 - present)
·     Yan Liu, Executive Director (Chairman of the Committee) ·     Zhiwei Gu, Non-executive Chairman (Member of the Committee) ·     Nick Beattie, Chief Financial Officer (Member of the Committee) ·     Yi Zeng, Non-executive Director (Member of the Committee) ·     Juan Wang, Non-executive Director (Member of the Committee)	·  Juan Wang, Non-executive Director (Chairman of the Committee) ·   Zhiwei Gu, Non-executive Chairman (Member of the Committee) ·     Yi Zeng, Non-executive Director (Member of the Committee)

The Company notes the ASX Principles and Recommendations stating that the Audit and Risk Committee should be chaired by an independent Director. The Committee was structured to represent the best mix of Board skills to manage the risk function. The Company believes that while this is departure from the Principles and Recommendations, it does not diminish its commitment to safeguarding integrity in corporate reporting.

The Committee held one meeting during the Reporting Period. The meeting was attended by the following Committee members eligible to attend at the time of the meeting: Zhiwei Gu, Nick Beattie, Yi Zeng, and Juan Wang. Yan Liu did not attend the meeting.

The Company's Audit and Risk Committee Charter is available on the Company's website.

4.2 CEO and CFO Declarations

The Chief Executive Officer and the Chief Financial Officer will provide declarations to the Board in relation to the preparation of the consolidated financial statements, in accordance with section 295A of the Corporations Act.

These declarations state that, in their respective opinions, the financial records of the Company have been properly maintained, that the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of the Company, and that the opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.

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 continuous disclosure and relevant procedures, which can be accessed on the Company's website www.rangeresources.co.uk.

Principle 6: Respect the Rights of Securityholders

6.1 Market and Shareholder Communications

Range's website contains information about the Company including media releases, key policies and the terms of reference of the Board Committees. All relevant announcements made to the market and any other relevant information will be posted on the website as soon as they have been released to ASX.

6.2 Investor Relations

The Company places significant importance on effective communication with shareholders.  Information is communicated to shareholders through the annual and half yearly financial reports, quarterly reports on activities, announcements through the ASX, media, the Company's website and through the Chairman's address at the Annual General Meeting. After the Annual General Meeting, Chairman of the meeting is available to meet with any shareholders and answer questions. Shareholders are encouraged to contact Range and to submit any questions via email [e-mail].

As part of the Company's developing investor relations programme, shareholders can register on the Company's website to receive email notifications of 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.

The Company will, wherever practicable, take advantage of new technologies that provide greater opportunities for more effective communications with shareholders.

The Company's shareholder communications strategy can be accessed on the Company's website www.rangeresources.co.uk.

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

Range's website (www.rangeresources.co.uk) contains the following information for the benefit of shareholders:

·     All market announcements and related information (posted immediately following release to the ASX);

·     Details relating to the Company's Directors and key executives;

·     Details of key person for shareholders' queries; and

·     Board and Board Committee Charters and other corporate governance documents.

In order to facilitate shareholder engagement, the Company may webcast and/or provide copies of investor presentations, general meeting results and selected analyst and media briefings on the Company's website.

Principle 7: Recognise and Manage Risk

7.1 Risk Committee

The Board does not have a stand-alone Risk Committee. However, the Company's Audit and Risk Committee oversees the Company's risk management and compliance function, with key responsibilities being to ensure that an appropriate risk management framework is in place and is operating properly and reviewing and monitoring legal and policy compliance systems and issues.

The composition, the number of times that the Audit and Risk Committee met during the Reporting Period, and the individual attendances of the Committee members at those meetings are disclosed in section 4.1 above.

The Company notes the ASX Principles and Recommendations stating that the Audit and Risk Committee should be chaired by an independent Director. The Committee was structured to represent the best mix of Board skills to manage the risk function. The Company believes that while this is departure from the Principles and Recommendations, it does not diminish its commitment to recognising and managing risk.

The Board Audit and Risk Committee Charter is available on the Company's website.

7.2 Internal Control and Risk Management

No risk review took place during the period, however the Audit and Risk Committee is intending to undertake a comprehensive review in early 2019.

7.3 Internal Audit

Range does not have an internal audit function due to the size of the organisation, and relies on the controls testing and recommendations to the Board from the external auditor.

The Range Board and the Audit and Risk Committee will have primary responsibility for ensuring that the significant risks facing the Company have been identified and adequate control, monitoring and reporting mechanisms are in place.

7.4 Risk Exposures

The Board has identified principal business risks and adopted mitigating strategies which can be found in the Company's Annual Report 2018.

Principle 8: Remunerate Fairly and Responsibly

8.1 Remuneration and Nomination Committee

The Board has established a Remuneration and Nomination Committee to consider and make recommendations to the Board on, among other things, remuneration policies applicable to Board members and senior management.

The Committee has three members, a majority of whom are independent directors, and is chaired by an independent director.

The Committee members, the number of times the Committee met during the Reporting Period and the individual attendances of the Committee members at those meetings are disclosed in section 2.1 above.

8.2 Remuneration Policy

Information regarding the Group's remuneration policies and practices is set out in the remuneration report which is included in the Annual Report 2018 (available at www.rangeresources.co.uk).

8.3 Share Trading Policy

The Board has adopted a specific trading policy in relation to all Directors of the Company and all employees of the Range Group. The Company's Security Trading Policy is provided to each new employee. The Directors are satisfied that the Company has complied with its policies on ethical standards, including trading in securities.

The Company's trading policy was last updated on 26 July 2016 and a copy can be found on the Company's website www.rangeresources.co.uk.

 

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