As a company with a Standard Listing, the Company is not required to comply with the provisions of the UK Corporate Governance Code. However, the Directors are committed to maintaining high standards of corporate governance and propose, so far as is practicable given the Company’s size and nature, to voluntarily adopt and comply with the QCA Code. At present, due to the size of the Company, the Directors acknowledge that adherence to certain other provisions of the QCA Code may be delayed until such time as the Directors are able to fully adopt them. In particular, action will be required in the following areas:
- As the Company grows, the Board will seek to appoint independent directors, one of whom will be appointed as senior independent director.
- Until an Acquisition is made the Company will not have separate audit, nomination or remuneration committees. The Board, as a whole, will instead review audit and risk matters, as well as the Board’s size, structure and composition, taking into account the interests of Shareholders and the performance of the Company. The Board will take responsibility for the appointment of auditors and payment of their audit fee, monitor and review the integrity of the Company’s financial statements and take responsibility for any formal announcements on the Company’s financial performance. Following the completion of an Acquisition, the Board intends to put in place audit and risk, nomination and remuneration committees.
- The QCA Code recommends that companies publish key performance indicators which align with strategy and feedback through regular meetings with shareholders and directors. The Company will not comply with this provision until after such time as it has made an Acquisition.
- Given the Company’s size, it has not yet developed a corporate and social responsibility policy. One will be put in place at the appropriate time.
- As a recently formed company, the Company has not published an annual report and therefore there has been no opportunity to comply with those elements of the QCA Code which relate to disclosure in the annual report. The Board does, however, intend to comply with this element of the QCA Code when it publishes its annual report.
To demonstrate the Company’s adherence to the QCA Code, the Board will hold timely board meetings as issues arise which require the Board’s attention. The Board is responsible for the management of the business of the Company, setting the strategic direction of the Company and establishing its policies. It is the Directors’ responsibility to oversee the financial position of the Company and monitor its business and affairs, on behalf of the Shareholders, to whom they are accountable. The primary duty of the Directors is to act in the best interests of the Company at all times. The Board also addresses issues relating to internal control and the Company’s approach to risk management.
Conflicts of interest
As at Admission, the Board is unaware of any existing conflicts of interest affecting any of the Directors. However, this does not mean that future potential conflicts of interest will not arise. Potential areas for Directors’ conflicts of interest in relation to the Company include (but are not limited to):
- The Directors are required to commit a limited amount of time to the Company’s affairs and, accordingly, they may have conflicts of interest in allocating time among various business activities.
- In the course of their other business activities, the Directors may become aware of investment and business opportunities which may be appropriate for presentation to Alteration Earth as well as the other entities with which they are affiliated. They may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
- The Directors are or may in the future become affiliated with entities, including other special purpose acquisition vehicles, engaged in business activities similar to those intended to be conducted by Alteration Earth, which may include entities with a focus on target companies or businesses similar to those being sought by the Company.
- The Directors may have a conflict of interest with respect to evaluating a particular acquisition opportunity if the retention or resignation of any of the Directors were included by a target company, business or asset(s) as a condition to any agreement with respect to the Acquisition.
Accordingly, as a result of these multiple business affiliations, each of the Directors may have similar legal obligations to present business opportunities to multiple entities. In addition, conflicts of interest may arise when the Board evaluates a particular business opportunity.
The Directors have, or may come to have, other fiduciary obligations, including to other companies on whose board of directors they presently sit or to other companies whose board of directors they may join in the future. To the extent that they identify business opportunities that may be suitable for the Company or other companies on whose board of directors they may sit, the Directors will honour any pre-existing fiduciary obligations ahead of their obligations to the Company. Accordingly, they may refrain from presenting certain opportunities to the Company that come to their attention in the performance of their duties as directors of such other entities unless the other companies have declined to accept such opportunities or clearly lack the resources to take advantage of such opportunities. Additionally, the Directors may become aware of business opportunities that may be appropriate for presentation to the Company as well as the other entities with which they are or may be affiliated.
To further minimise potential conflicts of interest, in the event that Alteration Earth intends to acquire an asset or entity which any of the Directors have an ownership interest in, whether it is an affiliate of any of the Directors or otherwise (e.g. an asset which any Director may own (whether in whole or in part) or an entity in which any Director is a director or significant shareholder), such Director shall not take part in any aspect of the Acquisition. Notwithstanding the provisions of the Articles, such Director shall not vote on any decisions in relation to the Acquisition (nor shall they form part of the quorum required for any such Board meetings).
The Directors are free to become affiliated with other entities engaged in similar business activities prior to the Company identifying and acquiring a target company, business or asset(s).
The Board as a whole will be responsible for sourcing Acquisitions and ensuring that opportunities are in conformity with the Company’s strategy. The Board will meet periodically to: (i) discuss possible Acquisition opportunities for the Company; (ii) monitor the deal flow and Acquisitions in progress; and (iii) review the Company’s strategy and ensure that it is up-to-date and appropriate for the Company and its aims.
In the event of a potential Acquisition being introduced to the Company by a Director where that Director has an interest or other conflict of interest, such potential Acquisition will be reviewed by the Acquisitions Committee, which will be comprised of all Independent Directors. In such circumstances, the Acquisitions Committee will have a full remit to negotiate the terms of such transaction (including engaging and liaising with professional advisers) and the interested or conflicted Director will not be invited to join or attend any meetings of the committee.