Governance
Zephyr is committed to achieving the highest standards of corporate governance and follows the requirements of the QCA Corporate Governance Code (the “Code”) published by the Quoted Companies Alliance in November 2023, a full version of which is available at http;//www.theqca.com.
All members of the Board believe strongly in the value and importance of good corporate governance and in our accountability to all of Zephyr stakeholders, including Shareholders, staff, clients, suppliers and the Governments and regulators of the countries in which we operate.
The corporate governance framework which the Group operates, including Board leadership and effectiveness, Board remuneration, and internal control is based upon practices which the Board believes are proportional to the size, risks, complexity and operations of the business and is reflective of the Group’s values.
The Board continually assesses its corporate governance processes to ensure that Zephyr continues to comply with best practice as outlined in the Code.
As Chairman of the Company, I have overall responsibility for corporate governance and promoting high standards throughout the Group. No key corporate governance matters have occurred during the year. The Code is constructed around ten broad principles and a set of disclosures. The Code states what it considers to be appropriate arrangements for growing companies and asks companies to provide an explanation about how they are meeting the principles through the prescribed disclosures. We have considered how we apply each principle to the extent that the Board judges these to be appropriate in the circumstances, and we provide an explanation of the approach taken in relation to each principle on our website and a summary is set out below.
RL Grant
Non-Executive Chairman
Establish a strategy and business model which promote long-term value for shareholders
Zephyr’s purpose is to focus on hydrocarbon exploration, appraisal and production in the Rocky Mountain region of the U.S., a region of low sovereign risk where its specialist expertise lies, and with a clear objective to deliver Shareholder value over the medium and long term.
Zephyr is focused on maximising the potential returns to Shareholders through carefully targeted exploration, appraisal, development and production activities in established and highly prospective areas underpinned by detailed geological analysis.
Where appropriate, the Company will also consider undertaking value accretive acquisitions or divestitures of assets following careful analysis and, as appropriate, Shareholder engagement.
A summary of the Group’s business model and strategy can be found in the Strategic report within this Annual Report.
Key risks and mitigating actions are detailed in the Principal risks section of the Strategic report within this Annual Report.
Further details may be found in the latest Annual Report which can be found on this website here: https://zephyrplc.com/investors/reports-presentations.
Promote a corporate culture that is based on ethical values and behaviours
The Board spends a significant amount of time formulating and agreeing on the core principles and values under which Zephyr will operate. In short, Zephyr’s team will always strive to be responsible stewards of its investors’ capital and responsible stewards of the environment in which we work. We believe that good environmental performance, together with good governance practices, will translate into good business performance and we are therefore focused on delivering strong economic returns in the most environmentally responsible manner practical.
The Company’s corporate culture is defined by the Board of Directors and communicated throughout the organisation by the CEO and the senior management team.
The Company upholds a culture founded on ethical values and behaviours, ensuring that employees, consultants, and operational and financial stakeholders are treated fairly and with respect. This corporate culture and system of values guide and support the Company’s purpose, objectives, business model and strategy of the Company.
The Board communicates the desired corporate culture regularly with the CEO, and throughout the year in their interactions with staff. The CEO further implements the culture across the Company through regular weekly leadership team meetings, routine engagement with all staff at the individual level, emails and presentations, always advocating respectful dialogue with employees, consultants and other
stakeholders.
Reinforcing this culture, the Company has implemented a number of policies and procedures to drive ethical values and behaviours to every aspect of the business of the Company including a whistleblower, antibribery, anti-corruption policies, travel and expense policies.
During the year, no material deviations from the Company’s stated values were identified.
Seek to understand and meet Shareholder needs and expectations
The Board is committed to maintaining good communication and having dialogue with private and institutional Shareholders, as well as analysts who cover the Company.
The Company maintains an informative and regularly updated website through which Shareholders can obtain copies of the Company’s financial reports, and other regulatory documents and regulatory information service releases. The website includes copies of presentations made to Shareholders and the investment community, as well as providing key background information about the Company and its projects.
The Company’s progress on achieving its key targets is regularly communicated to investors via regulatory information services. In accordance with stock exchange regulations, the Company provides operational updates, publishes financial results on a half yearly basis, information releases relating to matters of material importance to the Company’s business, and releases of a regulatory nature.
The Company retains the services of a corporate communications firm which actively engages with the press, investors, analysts, and, as appropriate, with social media.
The Company also retains two Corporate Brokers and a Nominated Adviser (“NOMAD”), to ensure compliance with stock exchange regulations as well as to ensure communications to Shareholders are suitable for them to understand the Company’s operations and activities.
The Company regards the AGM as an important opportunity to communicate directly with Shareholders.
In addition, the Company also proactively hosts regular webinars which are open to all Shareholders and interested parties. The Company also undertakes investor roadshows and analyst meetings, as and when appropriate.
Over the past year, the Company considers that it has communicated with a significant portion of its Shareholder base and has a clear understanding of Shareholder expectations.
In all communications with Shareholders and the general market, the Company maintains strict compliance with the requirements of the AIM Rules and Market Abuse Regulations. Contact details are provided on the Company’s website and within public documents, should Shareholders wish to communicate with the Company.
Take into account wider stakeholder interests, including social and environmental responsibilities, and their implications for long-term success
This Annual Report includes a section 172 statement which discusses how the Company considers the interests of Shareholders and other relevant stakeholders in its decision making.
Directors and employees adopt a broad view during decision making to take meaningful account of the impact of the business on all key stakeholder groups.
The Company recognises that long-term success relies upon good relations with a range of different stakeholder groups, and as such recognises their responsibilities to stakeholders within the areas it operates.
Given the current size of the Company, stakeholders are able to communicate directly with management and staff members, allowing the Board to receive reports of such interactions and act appropriately on any such feedback.
The Company is conscious of its impact on the geological, archaeological, cultural and biological resources in its operating environment, and has implemented measures to ensure that each person working on our projects, including company personnel, contractors and subcontractors, are informed of the environmental, social and cultural concerns, as well as health and safety measures that relate to that person’s job, so that we can minimise any negative impacts.
For example, prior to any major field operation, the Company holds training sessions with the contracting crew assigned to the project to relay the Company’s policies related to cultural, environmental, and safety conscious operations.
The Company seeks to conduct its activities in a way that keeps its environmental and social impacts to a minimum.
Stakeholders can contact the Company via the website or can contact the Company’s retained corporate communications advisers when required. Additionally, the Company has a whistleblower policy whereby employees or stakeholders can raise concerns in confidence, knowing there are processes in place to ensure such matters are carefully considered and, where appropriate, actions can be taken.
At present, the Board does not use Key Performance Indicators (KPIs) or defined forward-looking targets for tracking performance on environmental and social issues that the Board considers material to the Group, as these have not been areas of significance raised by the Company’s Shareholders to date, although the Company will consider the need for this going forward should there be a material expectation from Shareholders for this.
Embedding effective risk management internal controls and assurance activities considering both opportunities and threats, throughout the organisation
The Board operates a comprehensive system of internal controls designed (to the extent considered appropriate) to safeguard the Group’s assets and protect the business from identified risks, including reputational risk.
As well as tight oversight exercised by the Executive Directors, and appropriately trained and qualified staff, the Board engages appropriate auditors and consultants to assist in identifying and managing risk.
The Company’s approach to the management and identification of risk is set out in the Principal risks and uncertainties section of the Strategic report. The Company’s key risks centre around the geological, operational and engineering risk associated with drilling and testing wells at the Paradox project, and the implications of disappointing results, together with the financial costs of drilling such wells.
Prior to undertaking any major operational activities, the Company carefully estimates costs (including contingency), which provides an estimate of the financial risk associated with that particular activity. The Company carefully assesses that risk and undertakes a formal approval process for such expenditures, representing the maximum financial (cash) risk associated with an activity, and these expenditures are approved prior to committing to that expenditure.
As part of its risk management process, the Company also considers potential impacts on the broader asset position resulting from the outcome of that activity.
Given the Company’s current size, the Board considers that the executive management team, with consultation and feedback from the Non-Executive Directors and relevant advisers, to be sufficient to identify risks applicable to the Company and its operations and to implement an appropriate system of controls.
Accepting that no systems of control can provide absolute assurance against material misstatement or loss, the Directors believe that the established systems for internal control within the Company are appropriate to the size and cost structure of the business.
Establish and maintain the board as a well-functioning, balanced team led by the Chair
The Board comprises the Non-Executive Chair, two Executive Directors and two Non-Executive Directors (both of which are considered by the Board to be independent). One of the Non-Executive Directors, GB Stein, acts as the Group’s Senior Independent Director.
The Board is constantly reviewing its makeup to ensure that it has a sufficient blend between independence on the one hand, and knowledge of the Group on the other, to enable it to discharge its duties and responsibilities effectively.
Directors are encouraged to use their independent judgement and to challenge all matters, whether strategic or operational. The Chair holds regular update meetings with each Director to ensure they are performing as they are required. Board meetings take place, on average, every four weeks, normally held by video conference owing to the diverse geographic locations of the Board members.
The Board is satisfied that, between the Directors, it has an effective and appropriate balance of skills and experience, including in the areas of exploration, development and production of oil and gas assets. All Directors receive regular and timely information on the Group’s operational and financial performance. Relevant information is circulated to the Directors in advance of meetings. All Directors retire by rotation at regular intervals in accordance with the Company’s Articles of Association.
The Board makes decisions regarding the appointment and removal of Directors, and there is a formal, rigorous procedure for appointments. The Company’s Articles of Association require that one-third of the Directors must stand for re-election by Shareholders annually in rotation; that all Directors must stand for re-election at least once every three years; and that any new Directors appointed during the year must stand for election at the AGM immediately following their appointment.
All Directors are able to take independent professional advice in the furtherance of their duties, if necessary, at the Group’s expense. In addition, the Directors have direct access to the advice and services of the Company Secretary and Finance Director.
The Chair continually assesses the contribution of each member of the Board to ensure that:
- Their contribution is relevant and effective
- That they have a commitment to progressing the Group’s objectives in order to increase Shareholder value
- Where relevant, they have maintained their independence.
Maintain appropriate governance structures and ensure that individually and collectively the Directors have the necessary up-to-date experience, skills and capabilities
The Board meets regularly for both formal Board meetings and for informal
discussions.
The Board sets the direction of the Group through a schedule of matters reserved for its decision. The Board and its committees receive appropriate and timely information prior to each meeting; a formal agenda is produced for each meeting, and Board and committee papers are distributed several days before meetings take place. Any Director may challenge the Group’s proposals and decisions are taken democratically after discussion. Any Director who feels that any concern remains unresolved after discussion may ask for that concern to be noted in the minutes of the meeting, which are then circulated to all Directors. Any specific actions arising from such meetings are agreed by the Board or relevant committee and then followed up by the Group’s management.
The Executive Directors consists of the Chief Executive Officer and the Group Finance Director with input from the other Directors. They are ultimately responsible for formulation of the proposed strategic focus for submission to the Board, the day-to-day management of the Group’s businesses and its overall trading, operational and financial performance in fulfilment of that strategy, as well as plans and budgets approved by the Board of Directors. They also manage and oversee key risks, management development and corporate responsibility programmes. The Chief Executive Officer reports to the Board on issues, progress and recommendations for change. The controls applied by the Executive Directors to financial and nonfinancial matters are set out earlier in this document, and the effectiveness of these controls is regularly reported to the Audit Committee and the Board.
The Board is supported by the Audit and Remuneration Committees. Each Committee has access to such resources, information and advice as it deems necessary, at the cost of the Group, to enable the Committee to discharge its duties.
The Audit Committee is Chaired by the Senior Non-Executive Director, GB Stein. The Non-Executive Director, TH Reynolds, is the other member of the Committee.
The Remuneration Committee is Chaired by the Non-Executive Director, TH Reynolds. The Non-Executive Chair, RL Grant, is the other member of the Committee.
In relation to the cybersecurity incident in April 2026 the Board retained third-party consultants to assist the Company in determining the full nature of the incident and to advise the Company on how it could strengthen its internal controls to mitigate the risk of any further incidents of this nature in the future.
The Remuneration Committee uses FIT Remuneration Consultants, a third-party organisation to advise on Board and senior management remuneration.
Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement
The Company regularly considers Board effectiveness and continues to build its effectiveness and self-awareness through discussions with its stakeholders, advisers and Shareholders as well as with the Company’s senior management team.
The Company’s non-executive Directors have expertise in a number of key areas including public corporate finance, project and debt finance, geology, and government and regulation. This expertise is essential when considering the needs of the Board and in monitoring the overall performance of the Company.
When reviewing the structure of the Board, consideration is given to current Board composition and skill sets, recent performance, and filling gaps and potential blind spots.
Engaging outside expertise (such as discussions with the Company’s advisers or consultants) requires the Board to participate in Company selfevaluation and assessment to ensure that the appropriate skill sets, values, and personal attributes needed for Company success are appropriately identified.
The Board intends to implement an annual performance review process and will consider the use of external advisors periodically where appropriate. As the Company continues to grow, the Board will review each Director’s performance and effectiveness and will add additional resources where appropriate.
The Company will continue to liaise with its advisors as to the most appropriate composition and effectiveness of the Board and executive management team. The Company intends to implement a formal self-assessment process of evaluation during the 2026 calendar year.
Establish a remuneration policy which is supportive of long-term value creation and the Company’s purpose, strategy, and culture
The Remuneration Committee meets regularly to review and consider the Company’s remuneration arrangements, ensuring they effectively incentivise the executive management team while supporting the long-term enhancement of Shareholder value.
The compensation framework for the executive team has been designed to be clear, transparent and aligned to the Company’s purpose, strategy and culture, given its stage of development. Further details are provided in the Remuneration Committee report.
The Company puts forth its remuneration report to a non-binding
Shareholder vote in order to be fully compliant.
Communicate how the company is governed and is performing by maintaining a dialogue with Shareholders and other key stakeholders
The Group communicates with Shareholders through the Annual Report, full-year and half-year announcements, the AGM and one-to-one meetings with large existing or potential new Shareholders.
The Group also keeps Shareholders updated on progress and developments through its regular market announcements. The CEO remains a key part of encouraging Shareholder interaction and listening to feedback. A range of corporate information (including all group announcements and presentations) is available to Shareholders, investors and the public on the Company’s website www.zephyrplc.com.
The Board receives regular updates on the views of Shareholders through briefings and reports from the Chief Executive Officer, Group Finance Director and the Group’s brokers. The Group communicates with institutional investors frequently through briefings with management. In addition, analysts’ notes and brokers’ briefings are reviewed to achieve a wide understanding of investors’ views.
Please refer to extensive reporting of Shareholder and stakeholder engagement comments under QCA Code 3 and Code 4, above.
The Board and its committees
The name of each director and brief biographical details, including details of those who are independent are available in the ‘Leadership’ section of the website.
The Board is responsible for the operational and financial direction and overall strategy of the Group with an emphasis on funding, business development, financial performance and major operational issues.
Formal Board meetings are scheduled, on average, every four weeks with regular contact between meetings as required. During the year there were more than ten formal Board meetings, in addition to regular informal Board discussions, and each of the formal meetings was attended by every Director. The meetings are held to monitor and implement strategy, to review performance (including cash forecasts and ESG compliance), potential acquisitions, fundraising activity and to consider communications to the London Stock Exchange and Shareholders.
During the year, the matters reserved for the Board’s decision have been reviewed and reaffirmed. Specific matters for the Board’s consideration include:
- Approval of the Group’s strategic plan;
- Review of the performance of the Group’s strategy, objectives, business plans and budgets;
- Review and assess the Group’s sustainability and ESG goals;
- Approval of the Group’s operating and capital expenditure budgets and any material changes to them
- Review of material changes to the Group’s corporate structure and management and control structure
- Review of changes to governance and business policies;
- Monitoring efforts related to community and stakeholder engagement;
- Ensuring an effective system of internal control and risk management;
- Ensure that appropriate succession planning procedures are in-place;
- Approval of annual and interim reports and accounts, and preliminary announcements of year-end results; and
- Review of the effectiveness of the Board and its committees.
There is also an established procedure for all Directors to take independent professional advice, if necessary, at the Group’s expense. Additionally, all Directors have access to the advice of the Group’s advisers. The Group maintains Directors’ and Officers’ liability insurance.
The Board members are mindful of the need to keep skills and experience up to date which is done through a combination of training, continuing professional development through professional bodies, reading and on the job experience.
All Directors are expected to devote such time as is necessary for the proper performance of their duties. Directors are expected to prioritise and attend Board meetings and any additional meetings wherever possible.
Details of Directors who served during the year are set out in the Directors’ report. The Board is currently comprised of two Executive Directors and three Non-Executive Directors, one of whom acts as Chair. There are separate roles for the Chair and the Chief Executive Officer.
The Board has established an Audit Committee, which comprises of two Non-Executive Directors. The Audit Committee meets two or three times a year and the Group’s external auditor is invited to meetings where appropriate. The main responsibilities of the Audit Committee are to review and report to the Board on matters relating to:
- The integrity of the financial statements of the Group, including its annual and interim accounts;
- The effectiveness of the Group’s internal controls and risk management systems;
- The accounting policies and practices of the Group;
- Audit plans and the Auditor’s report, including any significant concerns the external auditor may have arising from their audit work; and
- The terms of appointment, remuneration and independence of the auditor.
The Board also has an established Remuneration Committee, which comprises the Non-Executive Chair and one Non-Executive Director.
The Remuneration Committee meets at least twice a year and reviews the performance of the Executive Directors and the scale and structure of their remuneration having due regard to the interests of our Shareholders. The Committee is also responsible for awards under the Group’s share option and incentive plans. No Director is involved in any decision relating to their own remuneration.
The remuneration of the Non-Executive Directors is determined by the Board.
Role, Responsibilities and Functions of Each Director
|
Name |
Role |
Key responsibilities and functions |
Contribution to strategy and commercial objectives |
Contribution to risk management |
|
Rick Grant |
Non-Executive Chair |
Leads the Board and is responsible for its overall effectiveness. |
Chairs Board discussion and approval of the Group’s strategic plan and oversees the balance of challenge and support given to the executive team in delivering it. |
Oversees the Board’s governance framework and satisfies himself, together with the rest of the Board, that the systems of internal control in place are appropriate to the size and risk profile of the Group. |
|
Colin Harrington |
Chief Executive Officer (Executive Director) |
Responsible, with the Group Finance Director, for formulating the Group’s proposed strategic focus for submission to the Board. |
Leads execution of the Board-approved strategy and plans and budgets and is accountable to the Board for delivery of the commercial objectives that sit under it. |
Manages and oversees key operational and commercial risks day to day, escalating matters to the Board and Audit Committee as required. |
|
Chris Eadie |
Group Finance Director and Company Secretary (Executive Director) |
Jointly responsible with the Chief Executive Officer for formulating the Group’s proposed strategic focus for Board approval. |
Translates strategic and commercial objectives into financial plans, budgets and forecasts, and reports performance against them to the Board. |
Operates and reports on the Group’s financial controls and, as Company Secretary, supports compliance with the AIM Rules and other regulatory obligations. |
|
Gordon Stein |
Senior Independent Non-Executive Director |
Chairs the Audit Committee (with Tom Reynolds as the other member). |
Brings independent, sector-relevant financial challenge to the Board’s consideration of strategic and commercial proposals, drawing on his experience as CFO of other AIM and listed E&P companies. |
Provides independent oversight, through the Audit Committee, of the Group’s principal financial and internal control risks. |
|
Tom Reynolds |
Independent Non-Executive Director |
Chairs the Remuneration Committee (with Rick Grant as the other member). |
Draws on prior public E&P executive and investment experience to challenge and test the commercial rationale of Board strategy, including M&A, IPO and financing matters. |
As Remuneration Committee Chair, ensures reward structures support long-term value creation without incentivising excessive risk-taking; as an Audit Committee member, contributes to oversight of financial and control risk. |
Investor Relations: communication with shareholders
The Board encourages regular and transparent dialogue with the Group’s Shareholders. All Shareholders are invited to the AGM at
which Directors are available for questioning. The notice of AGM is sent to all Shareholders at least 21 clear days before the
meeting. The number of proxy votes received for and against each resolution is disclosed at the AGM and a separate resolution is proposed on each item.
Internal controls
The Board is responsible for establishing the Group’s system of internal controls and for reviewing its effectiveness. Reflecting
the size of the Group, a key control procedure is the close day-to-day supervision of the business by the Executive Directors, supported by the senior management with responsibility for key tasks and operations.
The key procedures that have been established, and which are designed to provide effective internal control are as follows:
- Each of the Group’s subsidiaries is managed by an Executive Director and there is a management reporting process in place to enable the Board to monitor the performance of the Group on a regular basis;
- Monthly cash forecasts are prepared and formally reviewed by the Board;
- The Board reviews the major business risks faced by the Group and determines the appropriate course of actions required to manage those risks;
- The Board approves proposals for the acquisition of assets or new businesses and sets guidelines for the development of new properties. Capital expenditure is regulated and written proposals must be submitted to the Board for any expenditure above specified levels;
- Consolidated management information is prepared on a regular basis; and
- The Board has regular briefings from the Company’s Nominated Adviser and Legal Counsel.
The Board reviews the effectiveness of the system of internal controls and the control environment. The Board has reviewed the need for an independent internal audit function and has concluded that, at the current time, the Group is not yet large enough to warrant this.
UPDATED 11 August 2026