// Corporate Governance
The Board of Directors is responsible for the corporate governance of the Company and has adopted a range of corporate governance policies consistent with the “Principles of Good Corporate Governance and Recommendations” released by the ASX Corporate Governance Council in March 2003 and revised in August 2007, to the extent that such recommendations are appropriate to the structure and operations of the Company.
A summary of the major policies is set out below.
Functions and Responsibilities of Board and Management
The role of the Board is to develop strategies for the growth of the Company and its assets and monitor and evaluate the implementation of those strategies against set performance objectives. The Board is responsible for the corporate governance of the Company and considers a wide range of corporate governance issues on a regular basis, including accountability and control, risk management, ethical conduct, financial stability, performance appraisal and human resource management. Each director has the ability, as agreed to by the Board, to seek independent professional advice at the Company’s expense on an Company related matter on an as required basis.
The Board of Directors is structured with the required mix of skills and experience to ensure that the Company’s growth strategies can be effectively implemented. The composition of the Board is continually monitored to ensure that it has the appropriate mix of skills and experience. The responsibility for the day-to-day operation and administration of the Company is delegated by the Board of Directors to the Managing Director.
The Company’s Management is responsible for implementing the Company’s strategy and managing the affairs of the Company on a day-to-day basis. The performance of the Managing Director and Management is measured against objectives and outcomes determined at the commencement of each financial year and against the requirements set out in the job descriptions for the members of Management.
Given the current size and nature of the Company’s operations, the Board of Directors has assumed the responsibilities that would ordinarily be assigned to a nomination committee with respect to the nomination, appointment, retention and removal of directors. When a vacancy or perceived deficiency in skill or experience exists at board level, the Directors are responsible for the recruitment and appointment of the most suitable candidate, who shall hold office until the next annual general meeting, where the appointee is required to stand for re-election.
No director shall hold office for a period of more than three years without having to stand for re-election (excluding the Managing Director). All board appointments will be made and maintained subject to the rules of the Company’s constitution.
Details of qualifications, experience, responsibilities and tenure of current directors are set out in the directors report. The Board is currently comprised of three directors: two Executive Directors, being Randal Swick (Managing Director and Chairman of the Board) and Michael Fry (Chief Operating Officer), and one Non-Executive Director, being Paul Hardie.
The Board is required to assess the independence of its Non-Executive Directors at least annually. In assessing independence, the Board considers all circumstances relevant to determining whether a Non-Executive Director is free from any interest and any business or other relationship, which could, or reasonably be perceived to, materially interfere with that Director’s ability to exercise unfettered and independent judgement on Company issues. The Board currently includes one Non-Executive Director. The Board has assessed that Paul Hardie is considered to be independent as he does not have any contractual relationships with the Company, or through a business affiliate which results in greater than 10% revenue of gross assets for either party.
Ethical Decision Making
All directors, executives, management and employees are expected to act with the upmost integrity and objectivity, striving at all times to enhance the reputation and performance of the Company. The Board of Directors is committed to the establishment of appropriate ethical standards for the Company.
All directors, executives, management and employees must comply with all relevant laws and regulations. The Board is required to be notified as soon as a conflict of interest arises so that an appropriate resolution can be determined.
As a measure to ensure that insider trading does not occur, all directors, executives, management and designated employees must notify the Managing Director in writing prior to being permitted to undertake any transaction that results in a change in their relevant interest in the securities of the Company. The Managing Director will assess the information available to the person wishing to trade in the securities of the Company and the information available to the market, and will then advise of the appropriateness of such a trade.
The Managing Director must advise the Board in writing prior to trading in the securities of the Company. The Board will assess the information available to the Managing Director and the information available to the market, and will then advise on the appropriateness of such a trade.
Given the current size and nature of the Company’s operations, the Board of Directors in not in a position to justify the establishment of an audit committee. The Board has assumed the responsibilities that would ordinarily be assigned to an audit committee. Such matters include reviewing the annual report, financial report and other information to be externally distributed, reviewing external audit reports and the performance of external auditors, monitoring the internal control framework, evaluating Company performance, monitoring legal compliance and maintaining budgeting control and responsible accounting procedure. The external auditor will be requested to attend the annual general meeting of the Company, where shareholders will be able to discuss with the external auditor the conduct of the external audit and the preparation and content of the audit report.
Prior to the consideration of the financial report by the Board of Directors, the Managing Director and the Financial Controller are required to represent in writing to the Board that the Company’s financial report:
- Presents a true and fair view, in all material respects, of the Company’s financial condition and operational results; and
- Has been prepared in accordance with relevant accounting standards.
The Managing Director and Financial Controller are also required to represent in writing to the Board that:
- The above statement made by the Managing Director and Financial Controller pertaining to the Company’s financial report is founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the Board; and
- The Company’s risk management and internal compliance and control system is operating efficiently and effectively in all material aspects.
Such representations do not diminish the ultimate responsibility of the Board to ensure the integrity of the Company’s financial reporting.
The Company will adhere to the disclosure requirements of the Corporations Act 2001 and ASX Listing Rules. The Board will aim to identify all price sensitive information and ensure that it is disclosed to ASX in a timely and efficient manner. All ASX releases shall be reviewed for accuracy and completeness by a director prior to release to the market.
The Company’s website will be updated for all ASX releases, shareholder notifications, media and analyst briefings and other general information useful to investors. The Company has established an email subscription service for distribution of ASX releases to interested stakeholders. Shareholders will be encouraged and given the opportunity to ask questions at general meetings, as well as directly to the Company at any other time during the year.
The Company keeps shareholders and the market regularly informed through annual, half-year and quarterly reports and other required statutory information. The Company discloses material information to the ASX and media as required and regularly provide updates to the ASX on operational matters.
Risk Assessment and Management
The Board of Directors is responsible for putting in place practices and monitoring procedures designed to identify significant areas of business risk, both internal and external. The effectiveness of these practices and procedures in identifying risk will be reviewed at least annually. All risks identified pertaining to the Company will be incorporated into a risk profile that will be regularly reviewed and updated by the Board.
The Board is responsible for the effective management of any risks identified. Where considered appropriate, the Board will draw upon the expertise of appropriately qualified external consultants to assist in identifying, dealing with or mitigating risk.
The Board of Directors has established a Remuneration Committee for the purposes of reviewing and making recommendations with respect to remuneration practices of the Company. Board of Directors prepared and approved a Remuneration Committee Charter as the basis on which the committee was constituted and is operated. The role of the Remuneration Committee is to provide an independent mechanism for the determination and assessment of the remuneration practices of the Company, including remuneration packages and incentive schemes for executive directors and senior management, and fees payable to non-executive directors. The aim of the committee is to ensure that the remuneration practices of the Company are commensurate with industry standards and companies of similar operational and financial position.
The Remuneration Committee has the ability, as agreed to by the Board, to seek independent professional advice at the Company’s expense on any matter on an as required basis, such as acquiring available information which measures the remuneration levels in the various labour markets in which the Company competes.
The Remuneration Committee should ensure that the Board of Directors is provided with sufficient information to ensure informed decision making. Formal recommendations of the committee are not binding on the Board, however the Board is encouraged to comply with such recommendations to ensure that the integrity of the Company’s corporate governance procedures and Remuneration Committee is maintained.
Directors, officers, employees and contractors of the Company are prohibited from trading Securities whilst in possession of Inside Information, and should never communicate Inside Information to any person, including family members and associates.
Consistent with ASX Listing rules 12.9 – 12.12, all of the Company’s directors, officers and Key Management Personnel are also prohibited from trading in Securities during black-out periods five (5) trading days prior to the date of release of financial results, quarterly activity and cash-flow reports and the Company’s annual general meeting.
Any director, officer, employee or contractor of the Company wanting to deal in Securities, including buying and selling, must obtain written approval from the Chairman (or in the case of the Chairman, the Board) prior to doing so.