Corporate Governance Statement
- Introduction
- The Board of Directors
- Board Committees
- Risk Management
- Promoting Ethical Behaviors
- Corporate Social Responsibility
- Audit
- Communicating with Shareholders
Introduction
This Corporate Governance Statement outlines the corporate governance policies and practices that have been formally adopted by the Board of Yilgarn Infrastructure Limited. The Board is committed to implementing corporate governance policies and practices that are relevant to the Company and consistent with the ASX Corporate Governance Council’s principles and recommendations.
The Board of Directors
Membership and expertise of the Board
The board members have a broad range of skills, experience and expertise.
Roles and Responsibilities of the Board
The Board has the following overall responsibilities:
charting the direction, strategies and financial objectives for the Company and monitoring the implementation of those policies, strategies and financial objectives; and monitoring compliance with regulatory requirements and ethical standards.
In addition to matters expressly required by law to be approved by the Board, the Board has the following specific responsibilities:
To oversee the Company’s control and accountability systems;
To appoint the CEO and the Company Secretary and determine the terms and conditions of their appointment (including remuneration), and to set criteria for, and evaluate at least annually, their performance;
To monitor and assess management’s performance in carrying out any strategies, meeting any objectives and observing any budgets approved by the Board, and to ensure that sufficient resources are available to management for those purposes;
To ratify the appointment, and where appropriate, the removal of the Chief Financial Officer (or equivalent);
To approve and monitor financial and other reporting;
To monitor the Company’s disclosure policy and procedures, and to ensure the policy and procedures are complied with, and adequately reviewed and updated;
To ensure that appropriate internal and external audit arrangements are in place and operating effectively;
To issue any shares or other securities of the Company;
To approve commitments in excess of discretionary limits (Annexure A )that it may have from time to time delegated to the CEO and senior management;
To approve each of the following:
- The strategic plan and performance objectives, at least annually;
- The budget, at least annually;
- The remuneration and conditions of service including financial incentives for any Executive Directors, at least annually;
- Significant change to organizational structure;
- The acquisitions, establishment, disposal or cessation of any significant business of the Company;
- Any public statements which reflect significant issues of the Company’s policy or strategy; and
- Any changes to the discretions delegated from the Board;
To review on a regular and continuing basis:
- Senior executive succession planning
- Senior executive development activities.
In performing the responsibilities set out above the Board should at all times be guided by the objective of maintaining and building the Company’s capacity to generating value for shareholder; and act in accordance with the duties and obligations imposed upon them by the Company’s Constitution and by law.
The Board may delegate its responsibilities to Committees and senior management
Board Composition
The Company must have at least 3 and no more than 7 Directors. The Board currently comprises of 2 Executive Directors and 1 Non-Executive Director.
The Governance and Remuneration Committee assesses the Board Composition and size and recommends to the Board changes to the Board composition and size. The Governance and Remuneration Committee also assesses the skills required to discharge the Board’s duties, having regard to the Company’s business.
The Board considers that its current structure, size, focus and experience enable it to operate effectively and add value to the Company.
Chairperson of the Board
Until the time the Company is listed, the chairperson of the Board shall be Dr John Saunders. From the time the Company is listed, the Chair of the Board of Directors shall be elected in accordance with Clause 57 of the Company Constitution.
The duties and responsibilities of the Chairperson are as set out in the Board Charter
Independence of Directors
The independence of Directors is defined as independent of management and any business or other relationship that could materially interfere with the exercise of objective, unfettered or independent judgment by the Director’s ability to act in the best interests of the Company. Materiality is assessed on a case-by-case basis by reference to each Director’s individual circumstances.
On appointment, each Director is required to provide information for the Board to assess and confirm their independence as part of their consent to act as a Director. Directors re-affirm their independence annually.
Avoidance of Conflict of Interests
The Board is conscious of its obligations to ensure that Directors avoid conflict of interests between their duties as a Director of Yilgarn and their other interests and duties.
All directors are required to disclose any actual or potential conflict of interest on appointment as a Director and are required to keep these disclosures up to date. The Board has developed procedures to assist Directors to disclose potential conflicts of interest.
Where the Board believes that a significant conflict of interest exists for a Director on a Board matter, the Director concerned does not receive the relevant board papers and is not present at the meeting while the item is considered.
In addition, it is Company policy that any contract for the supply of goods or services to the Company with a value of $5 million or more must be put to tender unless special circumstances apply.
Appointment and Terms in office
The Governance and Remuneration Committee considers and makes recommendations for nominations of new Directors to the Board as a whole.
If the Board appoints a new Director during the year, that person will stand for election by shareholders at the next Annual General Meeting (AGM). Shareholders are provided with relevant background information on the candidates for election.
The Company’s Constitution requires one third of the Directors to retire from office at the Annual General Meeting each year. Retiring Directors are eligible for re-election. When a vacancy is filled by the Board during a year, a new Director must stand for election at the next Annual General Meeting.
The requirements relating to retirement from office do not apply to the Executive Chairman.
Remuneration
Total remuneration for the Directors is to be an amount not exceeding a fixed sum per annum determined by the Directors. Directors’ fees can only be increased by resolution passed at a General Meeting.
No Non-Executive Director may be paid as part or whole of his remuneration a commission or a percentage of profits or a commission or a percentage of operating revenue.
No Executive Director may be paid as part or whole of his remuneration a commission or a percentage of operating revenue.
The Company does not pay retirement benefits to directors.
The fees paid to Directors take into account what is paid by comparable companies and what is necessary to attract high-calibre people to consider Board appointment. In line with general industry practice, the Board reviews its remuneration strategies in relation to Non-Executive Directors from time to time.
Succession Planning
The Board considers Directors succession in conjunction with the Governance and Nomination Committee. Together they are responsible for developing and implementing succession planning for Non-executive Directors.
The Board is responsible for CEO succession planning. The Board is actively involved with management succession.
Board Committees
The Board has four committees. They are: the Investment Committee, the Governance and Remuneration Committee, the Audit and Risk Committee and the Social and Environmental Accountability Committee. The Committee charters describe their roles and responsibilities, as approved by the Board.
The Board Committees meet regularly and each committee is entitled to the resources and information it requires and has direct access to employees and advisors. Directors, senior executives, external advisors and selected employees are invited to attend Committee meetings as necessary.
At the next Board meeting following each Committee meeting, the Board is given a report (verbal or written) by the Chair of the Committee.
The performance of Committees is discussed and reviewed initially within each Committee and then reviewed as part of the Board’s performance review.
Risk Management
Approach to risk management
All business activities contain an element of risk. The Company’s philosophy toward risk is to identify the risks in advance, determine potential risk mitigation strategies, assess the risk in terms of the risk/reward equation and then determine how to proceed.
Appropriate policies and procedures have been developed to assist in the management of these risk areas. The Board is responsible for approving the Company’s risk management strategy and policies. Executive management is responsible for the implementation of the strategy and developing policies, processes and procedures to identify and manage risks.
Internal control framework
The Board acknowledges that it is responsible for the overall internal control framework, but recognises that no cost effective internal control system will preclude all errors and irregularities. To assist in discharging this responsibility, the Board has instigated an internal control framework that can be described under five headings.
- Financial reporting - there is a comprehensive budgeting system with an annual budget approved by the directors. Monthly actual results are reported against budget or some other benchmark (where considered appropriate) and revised internal forecasts for the year are prepared regularly.
- Quality and integrity of personnel - the Company’s human resource related policies and procedures are directed towards achieving the highest levels of service and integrity.
- External advice - the Company engages external experts, particularly in the areas of legal, tax and valuation matters to support management in performing their duties.
- Operating controls - procedures including information systems controls are detailed in procedure manuals. Exception and corrective action reports highlight any departures from these procedures.
- Functional specialty reporting - at various times the Board may request additional ad-hoc information to address a particular area of concern or risk.
Health, Safety and the Environment
The Company is committed:
To ensuring that its activities present a high level of protection for the health and safety of its employees, customers, the public and the environment; and to compliance with all applicable laws, rules and regulations.
The Company will ensure it has safe working conditions, define safe work practices, train its employees, and provide the information necessary for the control of hazards in the workplace and for protection of the environment.
Supervisors and managers will be held accountable for the safety and occupational health of their people and for the environmental protection measures in activities over which they have control.
The Company’s objective is to carry out its business with no adverse effect on its people, the community and the environment, and to strive for sustainable development and continual improvement. Of particular concern to the Company are the environment, heritage and native title rights of others.
Promoting Ethical Behaviors
The Company recognises the need for Directors and employees to observe the highest standards of behaviour and business ethics in conducting its business, and intends to maintain a reputation of integrity
The Board’s policy is that the Company and employees must observe both the letter and spirit of the law and adhere to high standards of business conduct and strive for best practice.
The Company’s Directors, managers and employees are encouraged to participate in active discussion about and to establish appropriate and consistent responses to difficult ethical issues. They are also encouraged to establish standards of behaviour which, where appropriate, exceed minimum legal requirements.
The Company encourages open communication that allows difficult and sensitive issues to be raised and to be resolved without fear of reprisal.
Corporate Social Responsibility
The Company believes that corporate social responsibility is an important element of developing and managing its business because it is a long-term driver of performance and shareholder value. The Company aims to maximise financial as well as social and environmental value from its activities.
Audit
The Board has adopted a policy that the Company’s external auditor must not provide non-audit services that may detract from the external auditor’s independence and impartiality or be perceived as doing so.
The Board considers the provision by the external auditor’s firm of taxation services relating to compliance and general taxation advice is consistent with this policy.
Any other services provided by the external auditor are reviewed on a case by case basis and must be approved by the Board in advance.
It is a Company policy that the lead external auditor partner and review partner are each rotated periodically.
Communicating with Shareholders
The Board aims to ensure that shareholders are informed in a timely and readily accessible manner of all major developments affecting the Company’s state of affairs.
Information is provided to shareholders by way of regular reports and the Annual Report.
The Annual General Meeting provides an excellent opportunity for shareholders to express views, to respond to Board proposals, to meet the Directors and to receive the most updated report on the Company’s activities.
The Company invites the Company’s 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.
Date Adopted: February 2008