Corporate Governance Policies
The Board of Directors of BCD Resources NL is responsible for the corporate governance of the Consolidated Entity. The Board guides and monitors the business and affairs of BCD Resources NL on behalf of the shareholders by whom they are elected and to whom they are accountable.
The Company aims to comply with the recommendations of the Australian Securities Exchange Corporate Governance Council (“Council”) as contained in the “ASX Corporate Governance Council Principles of Good Corporate Governance and Best Practice Recommendations” to the extent that the Board believes they are practical and applicable to the Company. Entities are required to disclose corporate governance principles that they have not adopted and to state the reasons why specific principles have not been adopted. The corporate governance principles and policies of the Company have been structured with reference to the Council’s eight essential corporate governance principles. Relevant principles are described below.
Principle 1: Lay Solid Foundations for Management and Oversight.
The role of the Board is to represent shareholders, provide strategic guidance to and effective oversight of management, foster a culture of good governance, and promote a safe and healthy working environment within the Company.
In performing its role, the Board at all times will endeavour to act:
- in a manner designed to create and continue to build sustainable value for shareholders;
- in recognition of its overriding responsibility to act honestly, fairly and in accordance with the law in serving the interests of the Company, its shareholders, employees and, as appropriate, other stakeholders;
- in accordance with the duties and obligations imposed upon Directors by the Company’s Constitution and applicable law; and
- with integrity and objectivity, consistent with ‘best practice’ ethical, professional and related standards.
The Board has delegated responsibility for the operation and administration of the Company to the Chief Executive Officer and the executive management team. The Chief Executive Officer is accountable to the Board for the authority that is delegated by the Board.
The Board charter supports all delegations of responsibility by formally defining the specific functions reserved for the Board and its committees, and those matters delegated to management.
Principle 2: Structure the Board to Add Value.
The Board has established a number of Board Committees to facilitate the execution of its responsibilities. The Committees provide a forum for a more detailed analysis of key issues and interaction with management. Each Committee reports its deliberations to the following month’s Board meeting.
The current Committees are:
Remuneration and Appointments Committee.
Members: D. E. Clarke (Chairman), M. W. Trumbull, W. Tsingos.
Function: The Committee assists and advises the Board in relation to the remuneration of the CEO, his senior executive direct reports, employees of the Company, consultants/contractors who are engaged to perform management or executive responsibilities, and Non-Executive Directors.
Audit and Risk Management Committee.
Members: K. J. Perrin (Chairman), D. E. Clarke, M. W. Trumbull (appointed 22 August 2008)
Function: The Committee assists and advises the Board in discharging its responsibilities in relation to financial reporting, financial risk management, evaluating the effectiveness of the financial control environment and oversight of the external audit function. Matters relating to the assessment and supervision of non-financial business risks and compliance are covered.
Composition: As a result of the increase in the Board size from four directors to six, on 22 August 2008 Mr Trumbull was appointed to the Audit and Risk Management Committee. Whilst the Board comprised only four directors the Company considered it appropriate to have two members on the Audit and Risk Management Committee, rather than three as recommended by the ASX Corporate Governance Recommendations.
Board Composition.
The BCD Resources Board currently comprises six Non-Executive Directors.
The nomination of all new Directors is considered by the full Board. The Board assesses the nominees against a range of specific criteria, including their experience, professional skills, potential conflicts of interest, the requirement for independence and the existing collective skill sets of the Board.
Independence
It is Board policy that a majority of Non-Executive Directors, including the Chairman, should be independent and free of any relationship that may conflict with the interests of the Company. Dr Clarke, Mr Trumbull, Mr Tsingos and Mr Perrin are all independent. The Board defines ‘independence’ in accordance with the ASX Recommendations. In order to ensure that any interest of a Director in a matter to be considered by the Board is known, each Director has contracted with the Company to disclose any relationships, duties or interests held that may give rise to a potential conflict. Directors are required to adhere strictly to constraints on their participation and voting in relation to any matters in which they have or may have a conflict of interest.
Independent professional advice and access to Company information.
Directors have right of access to all relevant Company information and to the Company’s executives and, subject to prior consultation with the Chairman, may seek independent advice from a suitably qualified adviser at BCD Resources’s expense.
Principle 3: Promote Ethical and Responsible Decision Making.
The Board and the Company’s employees are expected to uphold the highest levels of integrity and professional behaviour in their relationships with all the Company’s stakeholders. Below is a summary of BCD Resources’s core codes and policies that apply to Directors and employees.
Code of Conduct
The Code of Conduct sets ethical and governance standards for directors and senior management reporting to the Chief Executive Officer. The Code requires Directors and senior management to pursue the highest standards of ethical conduct in the interests of shareholders and others with an interest in the Company and seek to conform to the Best Practice Recommendations of the ASX Corporate Governance Council.
Code of Ethics
The Code of Ethics commits all Company employees to the highest standards of ethical behaviour and honesty and with full regard for the safety and health of its employees, customers, the wider community and the environment.
Trading in BCD Resources shares
To safeguard against insider trading, the Company’s Share Trading Policy prohibits Directors and employees from trading BCD Resources securities if they are aware of any information that would be expected to have a material effect on the price of Company securities.
The Company discloses to the ASX any transaction conducted by the Directors in BCD Resources securities, in accordance with ASX Listing Rules.
Principle 4: Safeguard Integrity in Financial Reporting.
The Chief Executive Officer and Chief Financial Officer have each declared in writing to the Board that the financial records of the Company for the financial year have been properly maintained and present a true and fair view of the Company’s financial condition and operating results, in accordance with the Corporations Act and the relevant accounting standards. The Audit and Risk Management Committee is governed by its own Charter.
Principle 5: Make Timely and Balanced Disclosure.
The Company seeks to provide relevant up-to-date information to its shareholders and the broader investment community in accordance with the continuous disclosure requirements under the ASX Listing Rules.
The Board has implemented a Continuous Disclosure Policy to ensure that information considered material by the Company is immediately lodged with the ASX. Other relevant information, including Company presentations and updates by senior management, is also disclosed to the ASX and through the Company’s website.
Principle 6: Respect the Rights of Shareholders.
The Board, in adopting a Continuous Disclosure Policy, ensures that shareholders are provided with up-to-date Company information. Communication to shareholders is facilitated by the publication of the Annual Report, Half Year Report, Quarterly Reports, other announcements and the posting of ASX releases on BCD Resources NL’s website immediately after their disclosure on the ASX. In addition, all shareholders are encouraged to attend the Annual General Meeting of Shareholders and use the opportunity to ask questions. The external auditor attends the meeting and is available to answer questions on the Financial Report.
Principle 7: Recognise and Manage Risk.
The Board believes that risk management and compliance are fundamental to sound management and that overseeing such matters is an important responsibility of the Board.
The Company is developing its risk and opportunity management strategies, including comprehensive reporting and control mechanisms, which are designed to ensure that strategic, operational, legal, reputational and financial risks and opportunities are identified, assessed and managed.
The reporting and control mechanisms support the annual written certifications given by the Chief Executive Officer and the Chief Financial Officer to the Board that the Company’s financial reports are based on a sound system of risk management and internal control.
Principle 8: Remunerate Fairly and Responsibly.
Board remuneration.
The total annual remuneration paid to Non-Executive Directors may not exceed the limit set by the shareholders at the Annual General Meeting (currently $300,000). The remuneration of the Non-Executive Directors is fixed rather than variable.
Executive remuneration.
The Remuneration and Appointments Committee provides recommendations and direction for the Company’s remuneration practices. The Committee ensures that a significant proportion of each senior manager’s remuneration is linked to his or her performance and the Company’s performance. Performance reviews are conducted at least annually to determine the proportion of remuneration that will be ‘at risk’ for the upcoming year. BCD Resources executives participate in the Company’s employee option scheme.