Corporate Governance

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Code of Ethics


I. PURPOSE AND APPLICATION OF THIS CODE

This Code of Ethics and Business Conduct (this "Code") applies to all senior officers of the Company (including, but not limited to, the Chief Executive Officer, President, Chief Financial Officer, Chief Operating Officer and Controller of the Company) and persons performing similar functions (collectively, the "Senior Officers" and each a "Senior Officer") along with all directors, other officers and employees of the Company and independent contractors and consultants providing services to the Company (the Senior Officers, directors, other officers and employees of the Company and independent contractors and consultants providing services to the Company are hereinafter collectively referred to as the "Employees"). This Code covers a wide range of business practices and procedures and is not intended to be exhaustive, but is instead intended to guide all Employees as to the standards of honest and ethical conduct expected of them.

Any Employee who has any inquiries about this Code or its application should consult with their manager or the Chairman of the Governance Committee. The Company has adopted this Code for the purpose of:

1. promoting honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

2. promoting avoidance of conflicts of interest, including disclosure to an appropriate person of any material transaction or relationship that reasonably could be expected to give rise to such a conflict;

3. promoting full, fair, accurate, timely and understandable disclosure in all reports and documents that the Company files with, or submits to any securities commissions (including, but not limited to, the Securities and Exchange Commission and the British Columbia Securities Commission), any exchanges upon which the Company's securities are traded (including, but not limited to, the TSX Venture Exchange), government bodies, self-regulating industry associations or other regulatory agencies (collectively, the "Regulators") and in other public communications made by the Company;

4. promoting compliance with applicable governmental laws, rules and regulations;

5. promoting the prompt internal reporting to an appropriate person of violations of this Code;

6. promoting accountability for adherence to this Code;

7. providing guidance to employees, officers and directors to help them recognize and deal with ethical issues;


8. providing mechanisms to report unethical conduct; and

9. helping foster the Company's longstanding culture of honesty and accountability.

At all times the Company expects all its employees, officers and directors to comply with and act in accordance with the principles stated above and the more detailed provisions provided hereinafter. Violations of this Code by an employee or officer or director are grounds for disciplinary action up to and including immediate termination of employment, officership or directorship.


II. WORKPLACE

1. A Non-discriminatory Environment

The Company (and its subsidiaries and affiliates) fosters a work environment in which all individuals are treated with respect and dignity. The Company is an equal opportunity employer and does not discriminate against employees, officers, directors or potential employees, officers or directors on the basis of race, color, religion, sex, national origin, age, sexual orientation or disability or any other category protected by Canadian federal and provincial laws and regulations and, in addition, in accordance with the laws or regulations applicable in the jurisdiction where such employees, officers or directors are located. The Company will make reasonable accommodations for its employees in compliance with applicable laws and regulations. The Company is committed to actions and policies to ensure fair employment, including equal treatment in hiring, promotion, training, compensation, termination and corrective action and will not tolerate discrimination by its employees and agents.

2. Harassment-Free Workplace

The Company will not tolerate harassment of its employees, customers or suppliers in any form.

3. Sexual Harassment

Sexual harassment is illegal and all employees, officers and directors are prohibited from engaging in any form of sexually harassing behaviour. Sexual harassment means unwelcome sexual conduct, either visual, verbal or physical, and may include, but is not limited to, unwanted sexual advances, unwanted touching and suggestive touching, language of a sexual nature, telling sexual jokes, innuendoes, suggestions, suggestive looks and displaying sexually suggestive visual materials.

4. Substance Abuse

The Company is committed to maintaining a safe and healthy work environment that is free of substance abuse. Employees, officers and directors are expected to perform their responsibilities in a professional manner and, to the degree that job performance or judgment may be hindered, be free from the effects of drugs and/or alcohol.

5. Workplace Violence

The workplace must be free from violent behaviour. Threatening, intimidating or aggressive behaviour, as well as bullying, subjecting to ridicule or other similar behaviour toward fellow employees or others in the workplace will not be tolerated.

6. Employment of Family Members

Employment of more than one family member at a Company office or other premises is permissible but the direct supervision of one family member by another is not permitted unless otherwise authorized by the Chairperson of the Company's Audit Committee. Except for summer and co-op students, indirect supervision of a family member by another is also discouraged and requires the prior approval of the Chairperson of the Company's Audit Committee. If allowed, any personnel actions affecting that employee must also be reviewed and endorsed by the forenamed executive.

7. Health and Safety

The Company is committed to providing a healthy and safe workplace in compliance with applicable laws, rules and regulations. Employees must be aware of the safety issues and policies that affect their job, other employees, and the community in general. Managers, upon learning of any circumstance affecting the health and safety of those in the workplace or the community, must act immediately to address the situation. Employees must immediately advise their managers of any workplace injury or any circumstance presenting a dangerous situation to themselves, other co-workers, or the community in general, so that timely corrective action can be taken.

III. THIRD PARTY RELATIONSHIPS

1. Ethical Conduct and Conflicts of Interest

Every Employee owes a duty to the Company to act with integrity. Integrity requires, among other things, being honest and candid. Employees must adhere to a high standard of business ethics and are expected to make decisions and take actions based on the best interests of the Company, as a whole, and not based on personal relationships or benefits. Generally, a "conflict of interest" occurs when an Employee's personal interests are, or appear to be, inconsistent with, interfere with or are opposed to the best interests of the Company or give the appearance of impropriety.

Business decisions and actions must be made in the best interests of the Company and should not be influenced by personal considerations or relationships. Relationships with the Company's stakeholders (for example, suppliers, competitors and customers) should not in any way affect an Employee's responsibility and accountability to the Company. Conflicts of interest can arise when an Employee or a member of his or her family receives improper gifts, entertainment or benefits as a result of the Employee's position in the Company.

Specifically, each Employee must:

a) act with integrity, which includes, but is not limited to, being honest and candid, while maintaining the confidentiality of information in a manner consistent with the Company's policies;

b) avoid violations of this Code, including, but not limited to, actual or apparent conflicts of interest with the Company in personal and professional relationships;

c) disclose to the Board or the Audit Committee any material transaction or relationship that could reasonably be expected to give rise to a breach of this Code, including actual or apparent conflicts of interest with the Company;

d) obtain approval from the Board or Audit Committee before making any decisions or taking any actions that could reasonably be expected to involve a conflict of interest or give the appearance of a conflict of interest;

e) observe both the form and spirit of all laws, regulations and rules of any Regulators that are applicable to the Company and the accounting standards and policies of the Company;

f) maintain a high standard of accuracy and completeness in the Company's financial records;

g) ensure full, fair, timely, accurate and understandable disclosure in the Company's periodic reports required by any Regulator;

h) report any violations of this Code to the Chairman of the Governance Committee;

i) proactively promote ethical behavior among peers in his or her work environment; and

j) maintain the skills appropriate and necessary for the performance of his or her duties.

2. Facilitation Payments

No unlawful or otherwise improper payment or gift is to be made or offered with a view to assisting the Company or its subsidiaries to obtain or retain business, to affect the enactment or enforcement of any laws, or otherwise to obtain favors.

3. Public Relations

The Company's President, Chief Executive Officer, and Chief Operating Officer are responsible for all public relations, including all contact with the media. Unless an employee, officer, or director is specifically authorized to represent the Company to the media, employees may not respond to inquiries or requests for information. This includes newspapers, magazines, trade publications, radio and television as well as any other external sources requesting information about the Company. If contacted by any member of the media about any topic, employees, officers, or directors immediately refer the call to one of the CEO, President, or IRO.

Employees must be careful not to disclose confidential, personal or business information through public or casual discussions to the media or others.

4. Directorship

Employees of the Company shall not act as directors or officers of any other corporate entity or organization, public or private, without the prior written approval of the Chief Executive Officer or the Chief Operating Officer. Directorships or officerships with such entities will not be authorized if they are considered to be contrary to the interest of the Company. The Chief Executive Officer or the Chief Operating Officer may provide authorizations for directorships/officerships that are necessary for business purposes or for directorships/officerships with charitable organizations or other entities that will further the Company's profile in the community.

IV. INFORMATION AND RECORDS

1. Disclosure of Corporation Information

As a result of the Company's status as a public company, it is required to file periodic and other reports with Regulators, including various securities commissions and stock exchanges. The Company is committed to ensuring that these reports provide the marketplace with full, fair, accurate, timely and understandable disclosure regarding the financial and business condition of the Company, and, as such, all disclosures contained in any reports and documents filed with, or submitted to, any Regulators on behalf of the Company or contained in other public communications made by the Company must be complete and correct in all material respects and understandable by the intended recipient.

Each Senior Officer, in respect of his or her area of responsibility, must be committed to providing timely, consistent and accurate information, in compliance with all legal and regulatory requirements, which disclosure must be maintained consistently and must be communicated in such a manner as to ensure that all parties in the marketplace have equal or similar access to this information.

All of the Company's books, records, accounts and financial statements must be maintained in sufficient detail so as to accurately and completely reflect the nature of the Company's business, financial condition and transactions, and must conform to both applicable legal requirements and to the Company's system of internal controls. Unrecorded or "off-the-book" funds, assets or liabilities should not be maintained unless authorized by the Audit Committee and permitted by applicable laws or regulations. Senior Officers involved in the preparation of the Company's financial statements must prepare those statements in accordance with generally accepted accounting principles, consistently applied, and any other applicable accounting standards and rules so that the financial statements materially, fairly and completely reflect the business transactions and financial statements and related condition of the Company.

Without limiting the generality of the foregoing, each Senior Officer must:

a) familiarize himself or herself with the disclosure requirements applicable to the Company;

b) not knowingly misrepresent, or cause others to misrepresent, facts about the Company to other persons, including, but not limited to, Regulators and the Company's external auditors;

c) to the extent that he or she participates in the creation of the books and records of the Company, promote the accuracy, fairness and timeliness of those records; and

d) in relation to his or her area of responsibility, properly review and critically analyze proposed disclosure for accuracy and completeness.

2. Confidentiality of Corporate Information

Employees must maintain the confidentiality of all confidential information of the Company and of its customers, suppliers, joint venture partners and other parties with whom the Company is considering a business or other transaction, except when disclosure of such is authorized by the Chief Executive Officer, President or Board of Directors or required or mandated by laws or regulations. Confidential information includes, but is not limited to, all information that has not been generally disclosed to the public (i.e. disseminated to the public by way of news release together with the passage of a reasonable amount of time which is generally 24 hours). It also includes information that has not been generally disclosed to the public that suppliers, customers and other parties have disclosed to the Company in confidence. An Employee's obligation to preserve the confidentiality of confidential information continues for an indefinite period of time after that Employee's office and/or employment with the Company is ended or terminated, for any reason whatsoever.

Records containing personal data about employees or private information about customers and their employees are deemed to be confidential information. They are to be carefully safeguarded and kept current, relevant and accurate and they should be disclosed only to authorized personnel, as designated from time to time, or as required by law.

All inquiries regarding the Company from non-employees, such as financial analysts, journalists and Regulators, should be directed to the Chief Executive Officer, President or Chairman of the Audit Committee. The Company's policy is to cooperate with every reasonable request for information from Regulators. At the same time, the Company is entitled to all the safeguards provided by law for the benefit of persons under investigation or accused of wrongdoing, including, but not limited to, legal representation. If a representative of any Regulator seeks an interview or requests access to data or documents of the Company or its employees, suppliers and customers for the purposes of an investigation, the Employee should refer the representative to the Chief Executive Officer, President or Chairman of the Audit Committee. Employees should preserve all materials, including, but not limited to, documents, communications and correspondence, that might relate to any pending or reasonably possible investigation.

V. LEGAL COMPLIANCE

1. Compliance with all Laws, Rules and Regulations

Employees, officers, and directors are expected to comply in good faith at all times with all applicable laws, rules and regulations and behave in an ethical manner.

Employees, officers, and directors are required to comply with the Company's Insider Trading Procedures and all other policies and procedures applicable to them that are adopted by the Company from time to time.

Employees, officers, and directors must cooperate fully with those (including the Chief Financial Officer and the Corporate Secretary) responsible for preparing reports filed with the securities regulatory authorities and all other materials that are made available to the investing public to ensure those persons are aware in a timely manner of all information that is required to be disclosed. Employees, officers and directors should also cooperate fully with the independent auditors in their audits and in assisting in the preparation of financial disclosure.

Senior officers of the Company must comply with the Company's procedures on Timely Disclosure of Material Information and provide full, fair, accurate, understandable and timely disclosure in reports and documents filed with, or submitted to, securities regulatory authorities and other materials that are made available to the investing public.

Employees who have access to, or knowledge of, material non-public information concerning the Company are prohibited from buying, selling or otherwise trading in the Company's stock or other securities. "Material non-public information" includes any information concerning the Company or its suppliers and customers, whether positive or negative, that has not yet been generally disclosed to the public and that might be of material significance to an investor in deciding whether to buy or sell stock or other securities of the Company or its suppliers and customers.

Employees also are prohibited from, either directly or indirectly, disclosing material non public information concerning the Company or its suppliers and customers, to any other person, including family members, other relatives and friends, which may be used by any person in the buying and selling of stock or other securities of the Company or its suppliers and customers.

2. Fair Dealing

Each employee, officer and director should endeavour to deal fairly with the Company's customers, suppliers, competitors, officers and employees. None should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts or any other unfair dealing practice. Improperly accessing or stealing company information, misusing information that was obtained without the owner's consent, or inducing such disclosures by past or present employees of other companies is prohibited.

3. Management Cannot Override Controls

No employee who exercises supervision or influence over another employee shall direct, request or encourage that other employee to do anything or omit to do anything; the doing of which or the omission of which is contrary to the Code, any other policy, procedure or rule of the Company or any applicable law. You are required to immediately report to the Chairman of the Governance Committee any situation in which any person attempts to direct, request or encourage you to violate the Code, or any other policy, procedure or rule of the Company or any applicable law.

It should be noted that not every instance in which a policy is overridden or an exception to policy is taken will constitute a breach of the Code. To ensure that any decision to depart from Company policy is not inconsistent with the Code, any manager or supervisor who directs another employee to disregard Company policy, procedure, or internal control will report the matter directly to the Chairman of the Governance Committee together with a brief explanation as to why they took the view that the departure from policy was warranted in the circumstances. The Chairman of the Governance Committee will maintain a log of all instances of override reported and provide a summary on a quarterly basis to the Audit Committee.

Examples of inappropriate management override include but are not limited to:

  • a manager requests that a payment be made to a vendor without the authorized approvals.

  • a manager requests that a significant journal entry is made or not made without basis or without adequate documentation.

  • a manager requests a vendor payment without a supporting invoice.

  • a manager makes unsupported allowances, judgments or estimates to manipulate earnings.

  • a manager does not disclose a potential conflict of interest before the Company enters into a business transaction with the related party.

VI. COMPANY ASSETS

1. Protection and Proper Use of Company Assets

All employees, officers and directors should protect the Company's assets (including, but not limited to, physical assets, intellectual property, trade secrets, trademarks, patents, goodwill, etc.) and ensure their efficient use. All Company assets should be used for legitimate Company business purposes. The Company permits the incidental and occasional personal use of computers and internet access provided that business use of these items is not affected.

VII. FINANCIAL

1. Financial Reporting and Records

The Company maintains a high standard of accuracy and completeness in its financial records. These records serve as a basis for managing our business and are crucial for meeting obligations to employees, customers, investors and others, as well as for compliance with regulatory, tax, financial reporting and other legal requirements. Employees, officers, and directors who make entries into business records or who issue regulatory or financial reports, have a responsibility to fairly present all information in a truthful, accurate and timely manner. No employee, officer or director shall exert any influence over, coerce, mislead or in any way manipulate or attempt to manipulate the independent auditors of the Company.

2. Improper Influence over Audit Process by External Auditor
The Company personnel must never improperly influence or attempt to improperly influence any person acting as an external auditor of Shoreham Resources Ltd.

VIII. REPORTING ACTUAL AND POTENTIAL VIOLATIONS OF THIS CODE AND ACCOUNTABILITY FOR COMPLIANCE WITH THIS CODE

The Board and the Audit Committee are responsible for applying this Code to particular circumstances and each has the authority, in consultation with the other, as applicable, to interpret this Code in respect of any particular circumstance.
Each Employee must:

1. communicate any existing or potential violation of this Code to the Chairman of the Governance Committee. Failure to do so is, itself, a breach of this Code.

2. not retaliate, directly or indirectly, or encourage others to do so, against any Employee for reports, made in good faith, of any misconduct or violations of this Code.

The Board and the Audit Committee have designated the Chairman of the Governance Committee to be responsible for the receipt, retention and treatment of reports of violations of this Code. Reports will be investigated under the direction of the Audit Committee.

The Board and the Audit Committee will take all such actions as either may consider appropriate in the circumstances to fully investigate any breach of the Code. All Employees are required to fully cooperate with any such investigations and to provide truthful and accurate information. If the Board or the Audit Committee determines that a breach has occurred, it must take or authorize any disciplinary or preventative action it deems appropriate after consultation with the Company's counsel, if appropriate, up to and including termination of employment and the pursuit of legal action against the offending Employee(s) involved. In some circumstances, the Board or the Audit Committee may have a legal or ethical obligation to bring violations of this Code to the attention of appropriate Regulators.
Compliance with this Code may be monitored by audits performed by the Board, Governance Committee, Audit Committee, the Company's legal counsel and/or by the Company's external auditors. All Employees are required to cooperate fully with any such audits and to provide truthful and accurate information.

Any waiver of this Code for any Employee may be made only by the Board or the Audit Committee and must be promptly disclosed to stockholders and others, as required by any applicable laws and regulations. The Company must disclose changes to this Code in accordance with all applicable laws and regulations.

IX. AMENDMENT, MODIFICATION AND WAIVER

This Code may be amended, modified or waived by the Board of Directors, subject to the disclosure and other provisions of Canadian security regulations, and the rules thereunder and the applicable rules of the Securities Act.

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