Corporate governance statement
The directors of Wattyl Limited aspire to the highest standards of corporate
governance,
which are fundamental to business integrity and performance.
In determining what is best practice governance for Wattyl, the Board has
taken into account the Australian Stock Exchange (ASX)
'Corporate Governance Council, Principles of Good Corporate Governance and
Best Practice Recommendations' of March 2003, the
Corporations Act 2001 (including CLERP 9 amendments) and other related best
practice guidelines. The Board's philosophy is to adopt
principles, practices and recommendations that are in the best interests of
Wattyl's stakeholders.
Consistent with the ASX Best Practice Recommendations, Wattyl's corporate
governance practices are regularly reviewed and are available
in the Corporate Governance section on Wattyl's website www.wattyl.com.au.
An outline of the main Corporate Governance Principles and Practices Wattyl
has had in place during the year is set out below.
Board mission and responsibilities
The role of the Board is to provide strategic direction and good governance of the company. The Board also reviews the company’s control
and accountability framework.
The directors are responsible to the shareholders for the performance of the
company in both the short and the longer term and seek to
balance these sometimes competing objectives in the best interests of the company
as a whole. Their focus is to enhance the interests of
shareholders and other key stakeholders and to ensure the company and its controlled
entities are properly managed.
Day to day management of the company’s affairs and implementation of
corporate strategy and policy initiatives are delegated by the
Board to the Managing Director and senior executives.
The Board takes ultimate responsibility for Corporate Governance. The functions
reserved for the Board are to:
•
review and approve corporate strategic direction, business plans, budgets and
financial policies;
•
oversee and monitor organisational performance and reporting including approval
of the annual and half-year financial reports and
liaison with the company’s auditors;
•
select, monitor and evaluate the Managing Director and oversee and monitor
the performance of other senior management;
• approve and monitor the progress of major capital expenditure, capital
management, and major corporate initiatives;
• oversee risk management policies, practice and performance;
• oversee compliance and governance policies and practices and ensure
the company’s business is conducted legally,
ethically and responsibly;
•
regularly assess the objectives, composition and performance of the Board,
its sub-committees and each of its members; and
•
represent the interests of and report to shareholders.
Established procedures at Board, Corporate and Business Unit level are designed
to safeguard the company’s assets and interests as well
as ensuring the integrity of its reporting. These include accounting, financial
reporting and internal control policies and procedures, which
are set by the Board. To ensure an efficient and timely reporting process,
the Board meets at least 10 times a year. The Board receives
regular and detailed monthly and financial reports in the format agreed to
by the Board.
The company’s Board responsibilities as set out above comply with ASX Corporate Governance Recommendation 1.1.
Board composition
The Board presently consists of six (6) directors, four (4) of whom are non-executive
directors, the fifth director being the Managing Director
and the sixth being the Finance Director. The Chair is an independent director
who has been elected by the full Board. It is the policy of the
Board that the majority of its members are independent non-executive directors.
Director First appointed Non-executive Independent Seeking election
or re-election at 2007 AGM
John Ingram
(Chairman) 2001 yes yes yes
John Nolan
(Managing Director) 2005 no no n/a
Urs Meyerhans
(Finance Director) 2004 no no no
Michael Brown 2003 yes yes yes
Patricia Akopiantz 2005 yes yes no
Mark Luby 2007 yes yes yes
The Board has two (2) executive directors, the Managing Director and the Finance
Director, who both have a contract of employment with
the company that sets out their respective job descriptions.
The contracts of employment for the Managing Director and the Finance Director
comply with ASX Corporate Governance
Recommendations 1.1.
The Board is cognisant of the need to have Board members with a mix of different
abilities and experience who will make a positive
contribution to the company. The composition of the Board is structured to
provide expertise in all facets of management and corporate
governance. Wattyl believes the Board should be an active partner with management
in delivering value to shareholders. Board members from time to time as requested
provide advice and counsel to management on a range of strategic and organisational
matters. With the
exception of the Audit and Organisation & Remuneration committees, the full
Board, during the year and where necessary, acted as a
committee on all other matters which are not otherwise dealt with as usual Board
business.
Details of the Board of Directors are provided on page 17. The composition
of the sub-committees of the Board is provided on
pages 21 to 22.
The composition of the Board as set out above complies with ASX Corporate Governance Recommendation 2.1, 2.2 and 2.3.
Director independence
The Board has adopted the following materiality thresholds and specific criteria to assess directors’ independence:
Materiality thresholds
•
Sales or purchases with companies with common directors – 5% of Wattyl
group’s relevant transaction category annual total.
•
Nature of any interest which may affect a director’s ability to act in
the interests of the company – 5% of Wattyl group’s relevant
transaction category annual total.
•
Substantial shareholding – 5% of the company’s issued shares (as
defined in the Corporations Act).
Specific criteria
•
Within the last three years, the director has not been employed in a permanent
executive capacity by the company or another group
member, or been a director after ceasing to hold any such employment.
•
Within the last three years, the director has not been a principal of a material
professional advisor or a material consultant to the
company or another group member, or an employee materially associated with
the service provided.
•
The director is free from any interest and any business or other relationship
which could, or could reasonably be perceived to,
materially interfere with the director’s ability to act in the best interests
of the company.
The Board regularly assesses the independence of each director and has determined
that the majority of directors are independent. Each
director is required to provide to the Board all relevant information to assist
the Board in this regard.
The Managing Director is Chairman of Australian Aluminium Finishing Holdings
Pty Ltd. As the Board considers that there is no conflict of
interest in the Managing Director holding this position, the Board has consented
to the Managing Director retaining this position. The
Finance Director does not hold any outside directorships.
The Board will continue to monitor developments and consider any guidelines
that maybe issued with respect to the maximum tenure of
directors in order to meet ‘independence’ requirements.
The independence of directors as set out above complies with ASX Corporate Governance Recommendation 2.1.
Director qualifications
Directors should possess qualifications, experience and expertise which will
assist the Board in fulfilling its responsibilities. The skills,
experience and relevant expertise of each director is summarised on page 17.
Director tenure
Each director (excluding the Managing Director) who has held office without
re-election either beyond the third annual general meeting
following the director’s appointment or last election, or for at least
three years, shall retire at an Annual General Meeting and be eligible for
re-election. If neither of these circumstances are applicable, then the director
to retire shall be the director who has served office longest
without re-election. If there are two or more directors who have been in office
an equal length of time, then in default of agreement the
director to retire shall be determined by lot. No director (other than the
Managing Director) shall remain in office for a period exceeding
three years without submitting himself, or herself, for re-election.
The directors may at any time appoint any other qualified person as a director
to fill a casual vacancy or as an addition to the directors but
so that the total number of directors does not exceed seven (7) as set by the
Board at its meeting in March 2004. Any director appointed
in this manner shall hold office until the next Annual General Meeting of the
company and shall then be eligible for re-election.
Director commitment
On average, non-executive directors spend more than thirty (30) days per annum
on Board and Committee Meetings. This includes
preparation and visits to operating divisions and associated travel.
Director share qualification
The share qualification for a director shall be the holding of two thousand
(2,000) ordinary shares in the company. Details of directors’
shareholdings in the company are set out on page 24 of this report.
Review of board and key executive performance
Board, committees, directors
The Board has implemented a formal process for the regular review and assessment
of the overall performance of the Board, its
Committees and individual directors. The Board reviews the following areas:
-Board dynamics;
-length of service;
-capability and performance of Board members;
-Board structure;
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