The Board is committed to the highest standards of ethical behaviour and an effective system of corporate governance commensurate with the size of the Company and the scope of its business operations. The key features of the Company’s system of corporate governance are set out below.
The Board regularly reviews their systems and policies to ensure they operate effectively in the best interests of the Company’s shareholders and take appropriate account of existing and emerging standards and regulatory guidelines such as the ASX Corporate Governance Principles.
The full extract from the Annual Report on Corporate Governance and the Company's Corporate Principles of Conduct are available.
The Board's role and Board membership
The Board has established an Investment Committee to make Investment decisions to support the Company's Corporate Objective.
Members of the Investment Committee are BB Teele (Chairman), DR Argus, RE Barker, TA Campbell, J Paterson, FD Ryan, CM Walter and PJ Williams.
The Audit Committee meets periodically to review the Company’s accounting policies; the content of financial statements; issues relating to the controls applied to the Company’s activities; the content, effectiveness and independence of the external audit; risk management issues; governance issues; compliance issues and other related matters. Meetings of the Audit Committee are regularly attended by a partner from the Company’s auditors, PricewaterhouseCoopers.
Members of the Audit Committee are PJ Williams (Chairman), DR Argus, FD Ryan and CM Walter.
The Remuneration Committee advises the Board on remuneration and related issues. In particular it reviews the level of Director fees, it also reviews the Managing Director’s remuneration package and the remuneration policy guidelines for other Senior Executives. The Committee also evaluates the performance of the Managing Director and Senior Executives and recommends to the Board the level of any short and long term performance based compensation.
Members of the Remuneration Committee are DR Argus (Chairman), BB Teele, J Paterson and CM Walter.
The Nomination Committee considers matters relating to the orderly renewal of the Board, Board performance and how to attract and retain Directors of high calibre with the appropriate experience and skill to contribute successfully to the oversight of the Company.
Consideration of potential Directors to fill vacancies is also undertaken by the Nomination Committee. Matters considered by the Committee include the ability of the proposed Director to contribute towards achievement of the Company’s goals, breadth of business experience and knowledge of the Australian investment scene.
Members of the Nomination Committee are J Paterson (Chairman), FD Ryan, BB Teele and PJ Williams.
Compliance and Continuous Disclosure
The Company is committed to maintaining the utmost standards of integrity and seeks to ensure all its activities are undertaken with efficiency, honesty and fairness. We also maintain a high level of transparency regarding our actions consistent with the need to maintain commercial-in-confidence material confidential, and where appropriate, to protect our shareholders interests.
As a listed entity, the Company has an obligation under the ASX Listing Rules to maintain an informed market with respect to its securities. Accordingly, we keep the market advised of all information required to be disclosed under the rules which we believe would have material affect on the price or value of the Company’s securities.
In addition to the half yearly and annual reporting requirements, there is a continual stream of information being provided to the Securities Exchange. Of particular note is the disclosure after each month-end of the Company’s net asset backing per share. All important Securities Exchange announcements are also posted on the Company’s internet website.
Continuous Disclosure Policy
Directors and Employees Securities Dealing Policy
The Company has adopted a Risk Management Framework which is in accordance with the Recommendation 7.1 of the ASX Corporate Principles of Good Corporate Governance.
The Board is assisted in its Risk Management Activities by the Audit Committee. Co-ordination of Risk Management activities is done by the CFO, who reports to the Audit Committee on such matters.
There are two main areas of risk that have been identified :
- Investment Risk
- Operational Risk
Risk Management Framework
The Company addresses Investment Risk through the careful selection of companies that it invests in, diversification of investments across sectors and industries and by being a long-term investor. Concentration and value-at-risk reports are part of the Company’s review.
The Trading Portfolio is held for short-term opportunities, and options are written over part of this portfolio. The Trading Portfolio is never more than 10% of the assets of the Company. Through the Investment Committee, close control is maintained of options transactions which are only written over stocks held in that portfolio and designed to enhance returns.
Credit and settlement risk are also reviewed as part of the Risk Management Framework.
The Company has a set of internal controls and review processes to mitigate against systems and process risk and error and fraud. These internal controls include, inter alia, peer review, reconciliations, different authority levels and sign-offs and dual signatories. The Company also has a Disaster Recovery Programme to mitigate the effects of any disaster and enable the business of the Company to continue.
Legal, regulatory and reputational risk are also part of the Risk Management framework, and considered by the Audit Committee. As well as experienced staff and directors, the Company utilizes external advisors to mitigate these risks.
The Board is accountable to its shareholders as owners of the Company. As such we seek to maintain active communication with them as far as practicable. In addition to the Annual and Half Year Reports sent to shareholders and the AGM, we conduct regular shareholder meetings in the mainland Australian capitals to provide shareholders the opportunity to meet with representatives of the Board and Management, to learn more about the Company’s activities and particularly to provide an opportunity to question the Board and Management about any aspect of the Company’s activities. We also maintain this website on which are our ASX announcements, Annual Reports, Half Yearly Reports, presentations to shareholders, and related material for shareholders and investors.