This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.
Corporate Governance
The Directors attach great importance to maintaining high standards of corporate governance to help achieve the Company’s goals.
To that end they have adopted the principles set out in the Quoted Companies Alliance Corporate Governance Code for Small and Mid-Size Quoted Companies (the ‘QCA Code’) 2018.
The QCA Code, which is constructed around 10 broad principles, sets out a standard of minimum best practice for small and mid-size quoted companies, including AIM companies.
Companies are required to disclose how the implementation of the QCA Code has been applied or, to the extent not done so, to explain any areas of departure from its requirements.
We have considered how we apply each principle to the extent that the Board judges these to be appropriate for our circumstances, and below we provide an explanation of the approach taken in relation to each. Our compliance with the QCA Code is based on the Company’s current practices and the improvements in its governance made since the last Annual General Meeting.
The QCA Code makes clear it is the prime responsibility of the Chairman to ensure the Company applies the QCA Code for the benefit of all the Company’s stakeholders. The Chairman and the Board accept their responsibility for setting the Company’s corporate culture, its values and for the behaviour of all its employees.
This report sets out our approach to the QCA Code and governance.
We have identified one principal area where we are not in full compliance:
In 2022 there were insufficient independent non-executive board members to form an Audit Committee which complied with best practice and comprised the Chair of the Company plus two non-executive directors as they were the most suitably qualified for the role. Following changes to the board in 2022 and 2023, the current composition of the Audit Committee does not follow the best practice guidance in that its membership comprises only one independent non-executive director who is the chair of the Audit Committee. The other members are executive directors, appointed for their financial and sector expertise. The composition of the Audit Committee may be reviewed and adjustments made as required.
The QCA Code allows cross reference to disclosures made on the website rather than repeating them all in this Report. The principal disclosures such as the Remuneration Committee and Directors’ Report will continue to be included in the Annual Report. However, for a full assessment of the Company, shareholders are encouraged to review the Company’s website for regulatory disclosures and for up-to-date information on activities.
QCA Principles
Powerhouse has a clear business model and growth strategy details of which are set out in the Strategic Report. Our objective is to be a leading technology provider, offering solutions to global pollution by converting non-recycled waste into sustainable energy whilst mitigating climate change impacts..
Details of the Company’s strategy and business model are set out in the Strategic Report. This describes progress to date, our commercial partnerships, our DMG™ development programme and our plans. Key challenges facing the Company and how they will be addressed are set out in the Strategic Report in the section headed Principal Risks and Uncertainties.
Powerhouse is committed to open communication with all its shareholders. The Company believes it is important to explain business development and financial results to its shareholders and to ensure that suitable arrangements allow the issues and concerns of shareholders to be heard and understood.
Since his appointment in January 2023, the Chair is primarily responsible for shareholder liaison. The Acting Chief Executive Officer and various Non-Executive Directors also support the Chair and have held meetings and discussions with the Company’s largest shareholders and its broker to understand shareholders’ needs and expectations.
Hard copies of the Annual Report and Accounts are issued to all shareholders who have requested them and these, together with the interim results are also published on the Company’s website at www.powerhouseenergy.co.uk. The Company makes full use of its website to provide information to shareholders, other stakeholders, potential customers, and other interested parties.
Shareholders are given the opportunity to raise questions at the Annual General Meeting (“AGM”) and the Directors are normally available both before and after the meeting for further discussion with shareholders. As a matter of policy, the level of proxy votes (for, against and votes withheld) lodged on each resolution is declared at the meeting. In the event there were a significant number of votes against a resolution, the Directors would seek to communicate with the shareholder(s) concerned to discuss their issues. There is normally a presentation to shareholders at the AGM to share the Company’s vision and discuss its progress and performance.
The Board receives regular share register analysis reports to monitor the Company’s shareholder base and help identify the types of investors on the register.
The Company regards its shareholders, employees, customers, contractors, consultants and advisors, business partners and suppliers as forming part of the wider stakeholder group. The Company recognises the contribution of each of these stakeholder groups and seeks to build meaningful and mutually beneficial relationships with them all.
As the needs and growth of the business evolves, management identifies key relationships and aims to ensure they are managed appropriately.
The Company’s internal stakeholders are its employees and its consultants. The Company is fully committed to promoting a working environment of equal opportunities for all without discrimination or harassment and regardless of part-time working, gender, sexual orientation, age, race, ethnicity, nationality, religion, or disability. The Company will report against this commitment in future annual reports.
The Company proactively seeks feedback to enable the management to make improvements and changes to products and processes. All stakeholders have access to contact information for communication with the Company. Feedback is respectfully acknowledged by the Company and appropriately dealt with.
The Board believes that investment in the wider stakeholder network assists the achievement of its long-term goals and helps create an environment of trust which will promote the long-term success of the Company.
There are further details of the Company’s approach to corporate social responsibility in the Environmental, Social and Governance Review in this Annual Report and Financial Statements.
Risk assessment and evaluation is an essential part of the Company’s planning and an important aspect of the Company’s internal control system.
The Board had established a comprehensive risk register relating to significant aspects of the Company’s business. Given the level of Board changes in 2022 and early 2023, the Board will complete a comprehensive revalidation and reassessment of the risks and mitigations within the register in quarter three and continue to review regularly thereafter.
Standards and policies
The Board is committed to maintaining appropriate standards for all the Group’s business activities and ensuring that these standards are set out in written policies. Key examples of such standards and policies include:
- Policy for Authorities and Approvals
- Share Dealing Code
- Social Media Policy
- Terms of Reference for the Board Committees
- Business Ethics Policy
- Environmental, Social and Governance Policy
- Health and Safety Policy
- Employment Policy
Approval process
All significant contracts are required to be reviewed and signed by a Director of the Company.
For further details of the Company’s approach to risk and its management, please refer to the Principal Risks and Uncertainties section of the Strategic Report in this Annual Report and Financial Statements.
The Board comprises two executive and five non-executive Directors and it oversees and implements the Company’s corporate governance programme.
Following the departure of Russell Ward in June 2022, Non-Executive Director Keith Riley was appointed as Interim Chair until the appointment of Antony Gardner-Hillman as Non-Executive Chair in January 2023, Keith Riley remains on the board in the role of Interim Chief Executive Officer until a permanent Chief Executive Officer is appointed.
The executive Directors are Keith Riley and Paul Emmitt. The non-executive Directors are Antony Gardner-Hillman, Hugh McAlister, Tony Gale, David Hitchcock and Karol Kacprzak.
The Chairman is responsible for the Company’s approach to corporate governance and the application of the principles of the QCA Code. Following new board appointments in 2023, the Chairman and the Non-Executive Directors – Hugh McAlister, Tony Gale, David Hitchcock and Karol Kacprzak – are the Company’s independent Directors and, as such, are independent of management and any business or other relationships which would interfere with the exercise of their independent judgement.
Each Board member commits sufficient time to fulfil their duties and obligations to the Board and the Company. They attend board meetings, join ad hoc board calls and are available for consultation when needed. The contractual arrangements between the Directors and the Company specify the minimum time commitments which are considered sufficient for the proper discharge of their duties. When exceptional circumstances arise all Board members understand the need to commit additional time.
Board packs include information on business developments, progress and risks faced as well as financial performance and are circulated ahead of board meetings. Key issues are highlighted and explained, providing board members with sufficient information to enable full discussion in the board meeting. From time to time, members of the Company’s senior management present to the Board to update them on issues and developments. The Board is supported by the Interim Chief Financial Officer, its Audit Committee and its Remuneration Committee.
Board and committee meetings
Attendances of Directors at Board and committee meetings convened in 2022, and which they were eligible to attend, are set out below:
| Director | Board Meetings Attended | Remuneration Committee Attended | Audit Committee Attended |
|---|---|---|---|
| Number of meetings in year | 8 | 1 | 1 |
| Keith Riley | 8/8 | N/A | N/A |
| Paul Emmitt* | 6/6 | N/A | N/A |
| Hugh McAlister* | 7/7 | N/A | N/A |
| Myles Kitcher | 6/8 | 1/1 | 1/1 |
| Gillian Weeks* | 5/8 | 1/1 | N/A |
| Paul Drennan-Durose* | 5/5 | N/A | N/A |
| James Greenstreet* | 5/6 | N/A | N/A |
| Russell Ward* | 3/4 | N/A | 1/1 |
*Notes:
Hugh McAlister was appointed to the Board on 4 February 2022.
Russell Ward joined the Board on 4 February 2022 and resigned from the Board on 10 June 2022.
Paul Drennan-Durose joined the Board on 14 February 2022 and resigned from the Board on 12 August 2022.
Paul Emmitt was appointed to the Board on 22 March 2022.
James Greenstreet resigned from the Board on 30 June 2022.
Myles Kitcher resigned from the Board on 8 November 2022.
Gillian Weeks was appointed to the Board on 18 January 2022 and resigned from the Board on 8 November 2022.
2022 was a year of many Board changes. There was only one formal meeting of the Remuneration Committee before two of its members resigned from the Board and the remaining non-executive Director managed matters in conjunction with other Board members for the remainder of the year.
There was only one formal meeting of the Audit Committee in 2022 in which the audit of the financial statements for the year ended 31 December 2021 was discussed. The same financial statements were discussed by the full Board with the auditors before being approved by the Directors of the Company in June 2022. Two of the non-executive directors of the Audit Committee resigned from the Board during the year and the remaining non-executive Director managed matters in conjunction with other Board members.
Appointment and tenure
The Board makes decisions regarding the appointment and removal of Directors. There is a formal, rigorous and transparent procedure for appointments, some of which have been delegated to the Remuneration Committee which, when needed, also acts as Nomination Committee, to make recommendations to the Board about the appointment of Directors and senior executives. Appointments are made on merit, taking account of the balance of skills, experience and knowledge required.
As part of its commitment to improve accountability to shareholders, the Board has decided that, in future, any director who is over the age of 70 or has been on the board for eight years at the date of the Annual General Meeting will submit themselves for re-election annually, in addition to those Directors retiring by rotation in accordance with our Articles of Association.
The Board comprises two executive Directors and five non-executive Directors, including the Chair, who are all considered to be independent. Details of the Directors are set out in the Directors’ Report of this Annual Report and Financial Statements.
The Chair believes that the Board should always have a suitable mix of skills and competencies covering all essential disciplines bringing a balanced perspective that is beneficial both operationally and strategically.
The nature of the Company’s business requires the Directors to keep their skillset up to date. Periodic advice on regulatory matters is given by the Company’s professional advisers. Directors joining the Board and new employees are offered full familiarisation briefings with the Company’s technology, the development programme and the current status of technology risk. New Directors are invited to attend familiarisation visits to the Company’s facilities. In addition, the Company periodically holds board meetings at the site of the facilities.
The Board is supported by senior management and by its key partners and professional advisers. The advice provided to the Board is often commercially sensitive. It is used by the Board to inform their decisions but typically will not be disclosed.
The Company Secretary supports the Board and reports directly to the Chair on governance matters.
The Board is supported and advised by an Interim Chief Financial Officer, a chartered accountant with extensive experience, who works closely with the Board and manages financial procedures and controls.
Board performance effectiveness process
The assessment of the Board’s performance has to date been largely focused on its contribution to the achievement of the Company’s financial and strategic goals. As the Company moves towards full commercial operation the Board intends to consider how to make the evaluation of its own performance more formal and rigorous.
Each Board member is subject to a review by the Remuneration Committee based on their professional contribution as well as their contribution to the performance of the Company.
The terms and conditions of the arrangements, including remuneration are set by the Remuneration Committee.
Board appointments
The Remuneration Committee, which acts as Nomination Committee as needed, meets when necessary to consider the appointment of new Directors. Board members all have appropriate notice periods so that if a board member indicates his or her intention to step down, there is sufficient time to appoint a replacement, whether internal or external.
Board appointments are made after consultation with advisers in all cases. The Nomad undertakes due diligence on all new potential board candidates.
Each Director is required to offer themselves for re-election at least once every three years as per the Company’s articles of association. In addition, any Director who is over the age of 70 or has been on the board for eight years at the date of the Annual General Meeting will submit themselves for re-election annually, in addition to those Directors retiring by rotation in accordance with our Articles of Association.
Succession planning
Succession planning was undertaken by the then Chairman and then by the Interim Chairman in consultation with the Board in 2022. However, with recent Board changes, succession planning is to be a responsibility of the Remuneration Committee which acts as a Nominations Committee as needed.
Consistent with Principle 3 above, the Company operates an inclusive, transparent and respectful culture.
The Board places particular emphasis on operating to the highest ethical and environmental standards. HS&E is a specific agenda item at every board meeting. Sustainability is placed at the heart of all decision-making and business activities. The Company’s objectives include observing the highest level of health and safety standards, developing our employees to their highest potential and being a good corporate citizen. A health and safety management system was developed for operation in 2021 with policies for healthy and safety, environment and quality which remain in place.
Management engages with independent environmental and safety engineering specialists to review the Company’s product and demonstrate that it will have minimal environmental and safety impact on the communities in which the Company operates.
The Company’s employment policies follow best practice, based on equal opportunities for all employees, irrespective of ethnic origin, religion, political opinion, gender, marital status, disability, age or sexual orientation.
The Company strives to create a diverse and inclusive working environment where every employee feels welcome and can do their best work. Powerhouse believes in the benefits of diversity and the importance of bringing a wide range of skills, experience and perspectives into our business. The Directors continually work with senior management to promote the Company’s values and to monitor attitudes and behaviours to ensure that they are consistent with its culture.
The Board has undergone significant change in the last two years and is now working to ensure that its processes and culture are appropriate for the Company’s current size and complexity. It continues to review its practices as the Company evolves and grows as part of its commitment to improve accountability to stakeholders.
The Non-Executive Chair is responsible for the Board, corporate governance, investor relations and PR. The Acting Chief Executive Officer has overall responsibility for managing the day-to-day operations of the Company and business development. The Board as a whole is responsible for implementing the Company’s strategy.
The Company has established an Audit Committee and a Remuneration Committee with formally delegated duties and responsibilities.
Audit Committee
The duties of the Audit Committee include reviewing, in draft, form the Company’s annual and half-yearly report and accounts and providing advice to the Board. Members of the Audit Committee are also responsible for reviewing and supervising the financial reporting process and internal control systems of Powerhouse. The Audit Committee is comprised of three independent non-executive Directors.
Remuneration Committee
The Remuneration Committee is responsible for determining the policy for Directors’ remuneration and setting remuneration for the Company’s chair, executive Directors and senior management including share option schemes and any bonus arrangements. The Remuneration Committee also acts as a Nomination Committee as needed. No director plays any role in determining his or her own remuneration.
2022 and early 2023 was a time of many Board changes. Two of the non-executive Directors of the Remuneration Committee resigned from the Board during the year and the remaining non-executive Director managed matters in conjunction with other Board members. In 2023, two new non-executive Directors, including the Chairman of the Board, have been appointed to the Remuneration Committee and normal Committee activities have resumed.
The Board also established its Environmental, Social and Governance (ESG) Committee in 2023, chaired by Keith Riley and supported by Paul Emmitt and Tony Gale. The report of this Committee is set out in this annual report and financial statements.
The Company maintains a regular dialogue with stakeholders including shareholders to enable interested parties to make informed decisions about the Company and its performance. Regular communication enables the Board to receive shareholders’ views by various means as set out in Principle 2 above.
The Company regularly releases appropriate price sensitive information regarding its activities and progress to the market.
The Board discloses the result of general meetings by way of announcement and discloses the proxy voting numbers to those attending the meetings. In order to improve transparency, the Board has committed to announcing proxy voting results in future and disclosing them on the Company’s website. In the event that a significant portion of voters have voted against a resolution, an explanation of what actions it intends to take to understand the reasons behind the vote will be included.