(Adopted 29 March 2012)
In fulfilling its obligation and responsibilities to its various stakeholders, the Board of directors of the Company (Board) advocates the adoption of and adherence to a framework of rules, relationships systems and processes within and by which authority is exercised and controlled within the corporation. This manual outlines the Company’s principal corporate governance procedures. The Board supports a system of corporate governance to ensure that the management of the Company is conducted in a manner which is directed at achieving the Company’s objectives in a proper and ethical manner.
The Australian Securities Exchange (ASX) Corporate Governance Council published its Corporate Governance Principles and Recommendations in March 2003. In August 2007 it published its first revision (2nd Edition of) the Corporate Governance Principles and Recommendations. On 30 June 2010, the ASX Corporate Governance Council released amendments to the 2nd edition of the Corporate Governance Principles and Recommendations in relation to diversity, remuneration, trading policies and briefings. The Corporate Governance Principles and Recommendations with 2010 Amendments will apply to listed entities from 1 January 2011. The document, at the time of this manual being reviewed, appeared on the ASX website: www.asx.com.au.
Commencing at page 3 of this manual is a summary of the eight revised corporate governance principles and recommendations (ASX Recommendations).
Except to the extent indicated in the Company’s Annual Report, the Company has resolved that for so long as it is admitted to the official list of the ASX it shall abide by the ASX Recommendations.
These policies have been adopted on the basis that, in the circumstances of the Company, they reflect what is considered to reflect reasonable aspiration. Their object is to focus attention upon the issues they address and create awareness of those issues and the pitfalls that one could otherwise fall into inadvertently. This is to develop a culture conducive to good practices. Adhering to the following policies is a condition of each contract of employment.
The Board encourages all key management personnel, other employees, contractors and other stakeholders to monitor compliance with this Corporate Governance manual, especially in relation to observable departures from the intent of the policies. Suggestions for improvements or amendments to this Corporate Governance manual can be made at any time by providing a written note to the Chair.
ASX’s EIGHT CORPORATE GOVERNANCE PRINCIPLES AND RECOMMENDATIONS
1. Lay solid foundations for management and oversight
Companies should establish and disclose the respective roles and responsibilities of Board and management.
1.1 Companies should establish the functions reserved to the Board and those delegated to senior executives and diclose those functions.
1.2 Companies should disclose the process for evaluation the performance of senior executives.
1.3 Companies should provide the information indicated in the Guide to Reporting on Principle 1.
2. Structure the Board to add value
Companies should have a Board of an effective composition, size and commitment to adequately discharge its responsibilities and duties.
2.1 A majority of the Board should be independent directors.
2.2 The chair should be an independent director.
2.3 The roles of the chair and chief executive officer (or equivalent) should not be exercised by the same individual.
2.4 The Board should establish a nomination committee.
2.5 Companies should disclose the process for evaluating the performance of the Board, its committees and individual directors.
2.6 Companies should provide the information indicated in Guide to Reporting on Principle 2.
3. Promote ethical and responsible decision making
Companies should actively promote ethical and responsible decision-making.
3.2 Companies should establish a Code of Conduct and disclose the code or a summary of the code as to:
• the practices necessary to maintain confidence in the Company’s integrity;
• the practices necessary to take into account their legal obligations and the reasonable expectations of their stakeholders;
• the responsibility and accountability of individuals for reporting and investigating reports of unethical practices.
3.3 Companies should establish a policy concerning diversity and disclose the policy or a summary of that policy. The policy should include requirements for the Board to establish measurable objectives for achieving gender diversity and for the Board to assess annually both the objectives and progress in achieving them.
3.4 Companies should disclose in each annual report the measurable objectives for achieving gender diversity set by the Board in accordance with the diversity policy and progress towards achieving them.
3.5 Companies should disclose in each annual report the proportion of women employees in the whole organisation, women in senior executive positions and women on the Board.
3.6 Companies should provide the information indicated in Guide to Reporting on Principle 3.
4. Safeguard integrity in financial reporting
Companies should have a structure to independently verify and safeguard the integrity of their financial reporting.
4.1 The Board should establish an Audit Committee.
4.2 The Audit Committee should be structured so that it:
• consists only of non-executive directors;
• consists of a majority of independent directors;
• is chaired by an independent chair, who is not chair of the Board;
• has at least three members.
4.3 The Audit Committee should have a formal charter
4.4 Companies should provide the information indicated in Guide to Reporting on Principle 4.
5. Make timely and balanced disclosure
Companies should promote timely and balanced disclosure of all material matters concerning the Company.
5.1 Companies should establish written policies designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior executive level for that compliance and disclose those policies or a summary of those policies.
5.2 Companies should provide the information indicated in the Guide to Reporting on Principle 5.
6. Respect the rights of shareholders
Companies should respect the rights of shareholders and facilitate the effective exercise of those rights.
6.1 Companies should design a communications policy for promoting effective communication with shareholders and encouraging their participation at general meetings and disclose their policy or a summary of that policy.
6.2 Companies should provide the information indicated in the Guide to Reporting on Principle 6.
7. Recognise and manage risk
Companies should establish a sound system of risk oversight and management and internal control.
7.1 Companies should establish policies for the oversight and management of material business risks and disclose a summary of those policies.
7.2 The Board should require management to design and implement the risk management and internal control system to manage the company’s material business risks and report to it on whether those risks are being managed effectively. The Board should disclose that management has reported to it as to the effectiveness of the company’s management of its material business risks.
7.3 The Board should disclose whether it has received assurance from the chief executive officer (or equivalent) and the chief financial officer (or equivalent) that the declaration provided in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks.
7.4 Companies should provide the information indicated in Guide to Reporting on Principle 7.
8. Remunerate fairly and responsibly
Companies should ensure that the level and composition of remuneration is sufficient and reasonable and that its relationship to performance is clear.
8.1. The Board should establish a Remuneration Committee.
8.2. The Remuneration Committee should be structured so that it:
• consists of a majority of independent directors;
• is chaired by an independent director;
• has at least three members.
8.3. Companies should clearly distinguish the structure of non-executive directors’ remuneration from that of executive directors and senior executives.
8.4. Companies should provide the information indicated in Guide to Reporting on Principle 8.
LIST OF ADOPTED CHARTERS AND POLICIES
The Company has adopted the following Charters, Policies and Rules which have been or are to be placed on its website:
1. Board Charter
2. Audit Committee Charter
3. Remuneration Committee Charter
4. Nomination Committee Charter
5. Code of Conduct
6. Code of Conduct for Directors and Executives
7. Risk Management Policy
8. Shareholder Communication Policy
9. Continuous Disclosure Policy
10. Diversity Policy
11. Directors Independence Questionnaire
These charters, policies and rules are to be reviewed annually for audit compliance and to identify any changes required.
The Company Secretary is to maintain (and submit to the Board for adoption) compliance checklists to assist instil the culture contemplated by and compliance withthis.