Corporate Governance Statement 2020

Corporate Governance Statement 2020

Statement of corporate governance arrangement

For the financial year ended 31 December 2020


For the year ended 31 December 2020, under The Companies (Miscellaneous Reporting) Regulations 2018, the Company has applied the Wates Corporate Governance Principles for Large Private Companies (the Wates Principles) (published by the Financial Reporting Council (FRC) in December 2018 and available on the FRC website). 

Companies are able to adopt the Wates Principles as an appropriate framework when making disclosures regarding corporate governance arrangements. The Group have adopted the disclosure in the 31 December 2020 Consolidated Financial Statements and have set out below how the Wates Principles has been applied over the last 12 months, and how the Group intends to apply them further going forward as the strategy is developed and the business continues to grow.  

Principle 1: Purpose and leadership

The Group’s purpose is to be a leading global supplier of soda ash – in terms of scale, profitability, environmental responsibility, sustainability and governance. The Group’s mission is to challenge the status quo, to innovate and to excel in everything it does. The Group is focussed on delivering the highest quality naturally sourced product to its customers in an environmentally friendly, sustainable and socially responsible way. Solution mining of natural trona combined with an efficient global supply chain mean that the Group has the lowest carbon emissions (Scope I, II & III) of any soda ash producer worldwide, by a significant margin. The Group aims to improve its sustainability credentials at every stage of the product life cycle. 

The Group’s strategy is to maintain and extend its leadership position in the global soda ash industry in terms of production volumes, product quality and supply chain reliability, technology and process innovation and in safety and environmental standards. Our strategy is executed in a responsible and sustainable way, with the lowest impact on the environment whilst supporting and investing in the communities in which we operate and creating a positive impact with all stakeholders. 

Our corporate culture and values of accountability and transparency set the standard for our operations and guide our strategic direction. Our skilled, highly capable employees are critical to the Group’s success, each contributing to our vibrant performance-focused culture. Integrity and responsible business practices are encouraged, together with the development of long-term mutually beneficial partnerships with our distributors, customers and suppliers. The Group lives by its values and invests in its employees and local communities, providing support and resources which foster co-operation, development and economic independence. 

Over the last 12 months, a key area of focus has been to produce and implement various procedures, policies and guidance documents for employees, including a Health & Safety Policy, an Equal Opportunities Policy and a Code of Conduct, which amongst other policies, formed the WE Soda Employee Handbook. This was formally approved by the Board in January 2021. The Group has also established Supplier Codes of Conduct for all of its operations. 

Principle 2: Board composition

The Company’s Chairman, Gürsel Usta, was appointed on 6 December 2019. The roles and responsibilities of Chairman and Chief Executive Officer are separate and are clearly defined and documented to ensure that there is a balance of responsibilities, accountabilities and decision-making across the Company. The Chairman is responsible for the leadership and effective operation of the Board. 

The Board comprises the Chairman, three Non-Executive Directors, Chief Executive Officer, Chief Financial Officer, Executive Director and Chief Legal Officer. Board members have a range of skills, expertise, and experience, including experience in the fields of industrial operations, banking, insurance, energy and diplomacy. The size and composition of the Board is appropriate to the business. The Group acknowledges that there is a lack of diversity on the Board and has taken this into consideration during the most recent board recruitment process and will continue to do so when making future Board appointments. 

The Non-Executive Directors are responsible for bringing independent and objective judgment to the Board. The Non-Executive Directors participate fully in all Board commercial and strategic debates and provide significant advice and challenge in critical areas for the business.  

Principle 3: Director responsibilities

The Board has agreed a Board meeting calendar and meets formally at least six times a year. Relevant governance updates are given to the Board at Board meetings by Prism Cosec, as well as the executive management team.  
The Board receives regular information on many aspects of the business including financial and operating performance, strategy, market environment, health & safety, legal and compliance. 

The Board has approved a Schedule of Matters Reserved for the Board which will be reviewed on an annual basis. Over the last 12 months a significant amount of work has been undertaken to develop and embed an internal controls framework. A treasury and cash governance transformation plan was approved by the Board in January 2021 and the Group Financial Controller joined in January 2021. The business has since implemented a number of control changes: a Group Delegation of Authority was approved by the Board in March 2021 and has since been implemented; a global treasury management system will be implemented during 2021; and Group finance functions are being established, with senior finance personnel being recruited throughout 2021.  

Prism Cosec carried out a Governance Review of the Group in 2019 which was revisited in 2021 and updates on progress since the initial review were presented to the Board in May 2021. Significant progress has been made against the original actions, including the adoption of a Health & Safety Policy, the publication of a Modern Slavery Statement and the establishment of an annual calendar of formal Board meetings.  

Principle 4: Opportunity and risk

The Board discusses and reviews the Group’s strategic objectives at Board meetings, including discussion and consideration of long-term strategic opportunities. The Board reviews and approves the annual budget and the Five-Year Plan. The Five-Year Plan outlines the production forecast, the cost ambitions, the sales plans, the capital investment priorities and the resulting profit and cash flow forecasts. The debt facilities, repayment profile and covenants are assessed and stress-tested against the Five-Year Plan. Risks and mitigations are discussed, alongside the KPIs to be tracked through the year (from annual volumes all the way to OpCo-specific input costs) 

The annual budget is set with reference to the Five-Year Plan, with any deviation from the long-term strategy assessed and critically evaluated by the Board. 

Principle 5: Remuneration

The Board intends to form a remuneration committee during 2022, taking into consideration appropriate non-executive skill sets. Current remuneration structures are agreed between the Executive Directors and the Chair, taking into consideration experience, potential, skill level, external benchmarking and need to appropriately incentivise critical members of the management team. 

Principle 6: Stakeholders 

The Group builds positive relationships with all of its stakeholders and use various methods of engagement to ensure that the stakeholders are kept up to date with the Company’s activities. For more information on stakeholders and how the Group engages with them please see the Strategic ReportDirectors’ duties – s172(1) Companies Act 2006. 

The Group’s mining and processing operations are subject to strict regulations by local authorities with respect to protection of the environment. We have a rigorous compliance program to ensure that the facilities comply with all applicable laws and regulations.  

This statement is extracted from WE Soda Limited Annual Accounts 2020.