Statement of Corporate Governance
Ten Essential Corporate Governance Principles and Best Practice Recommendations
Principle 1: Lay solid foundations for management and oversight
Recognise and publish the respective roles and responsibilities
of Board and management.
Recommendation 1.1:
- Formalise and disclose the functions reserved to the Board and those delegated to management.
- Formalise directors appointments in writing.
Principle 2: Structure the Board to add value
Have a Board of effective composition, size and commitment to adequately
discharge its responsibilities and duties
Recommendation 2.1:
A majority of the Board should be independent directors.
Recommendation 2.2:
The chairperson should be an independent director.
Recommendation 2.3:
The roles of the chairperson and chief executive officer (or equivalent)
should not be exercised by the same individual.
Recommendation 2.4:
The Board should establish a Nomination Committee.
Recommendation 2.5:
Provide the information indicated in Guide to Reporting on Principle 2.
Principle 3: Promote ethical and responsible decision-making
Actively promote ethical and responsible decision-making
Recommendation 3.1:
Establish a Code of Conduct to guide the directors, the chief executive
officer (or equivalent), the chief financial officer (or equivalent) and
any other key executives as to:
3.1.1 the practices necessary to maintain confidence in the Company’s
integrity
3.1.2 the responsibility and accountability of individuals for reporting
and investigating reports of unethical practices.
Recommendation 3.2:
Disclose the policy concerning trading in Company securities by directors,
officers and employees.
Recommendation 3.3:
Provide the information indicated in Guide to reporting on Principle 3.
Principle 4: Safeguard integrity in financial reporting
Have a structure to independently verify and safeguard the integrity of
the Company’s financial reporting
Recommendation 4.1:
Require the chief executive officer (or equivalent) and the chief financial
officer (or equivalent) to state in writing to the Board that the Company’s
financial reports present a true and fair view, in all material respects,
of the Company’s financial condition and operational results and are
in accordance with relevant accounting standards.
Recommendation 4.2:
The Board should establish an Audit Committee
Recommendation 4.3:
Structure the Audit Committee so that it consists of:
- only non-executive directors
- a majority of independent directors
- an independent chairperson, who is not chairperson to the Board
- at least three members.
Recommendation 4.4:
The Audit Committee should have a formal charter.
Recommendation 4.5:
Provide the information indicated in Guide to reporting on Principal 4.
Principle 5: Make timely and balanced disclosure
Promote timely and balanced disclosure of all material matters concerning
the Company
Recommendation 5.1:
Establish written policies and procedures designed to ensure compliance
with ASX Listing Rule disclosure requirements and to ensure accountability
at a senior management level for that compliance.
Recommendation 5.2:
Provide the information indicated in Guide to reporting on Principle 5.
Principle 6: Respect the rights of shareholders
Respect the rights of shareholders and facilitate the effective exercise
of those rights
Recommendation 6.1:
Design and disclose a communications strategy to promote effective communication
with shareholders and encourage effective participation at general meetings.
Recommendation 6.2:
Request the external auditor to attend the annual general meeting and be
available to answer shareholder questions about the conduct of the audit
and the preparation and content of the auditor’s report.
Principle 7: Recognise and Manage risk
Establish a sound system of risk oversight and management and internal control
Recommendation 7.1:
The Board or appropriate Board committee should establish policies on risk
oversight and management.
Recommendation 7.2:
The chief executive officer (or equivalent) and the chief financial officer
(or equivalent) should state to the Board in writing that:
7.2.1 the statement given in accordance with best practice recommendation
4.1 (the integrity of financial statements) is founded on a sound system
of risk management and internal compliance and control which implements
the policies adopted by the Board
7.2.2 the Company’s risk management and internal compliance and control
system is operating efficiently and effectively in all material respects.
Recommendation 7.3:
Provide the information indicated in Guide to reporting on Principle 7.
Principle 8: Encourage enhanced performance
Fairly review and actively encourage enhanced Board and management effectiveness
Recommendation 8.1:
Disclose the process for performance evaluation of the Board, its committees
and individual directors, and key executives.
Principle 9: Remunerate fairly and responsibly
Ensure that the level and composition of remuneration is sufficient and
reasonable and that its relationship to corporate and individual performance
is defined
Recommendation 9.1:
Provide disclosure in relation to the Company’s remuneration policies
to enable investors to understand (i) the costs and benefits of those policies
and (ii) the link between remuneration paid to directors and key executives
and corporate performance.
Recommendation 9.2:
The Board should establish a Remuneration Committee.
Recommendation 9.3:
Clearly distinguish the structure of non-executive directors’ remuneration
from that of executives.
Recommendation 9.4:
Ensure that payment of equity-based executive remuneration is made in accordance with thresholds set in plans approved by shareholders.
Recommendation 9.5:
Provide the information indicated in Guide to reporting on Principle 9.
Principle 10: Recognise the legitimate interests of stakeholders
Recognise legal and other obligations to all legitimate stakeholders
Recommendation 10.1:
Provide the information indicated in Guide to reporting on Principle 9.
