Corporate governance statement (continued)
-strategic direction; and
-general Corporate Governance issues.
To improve a director’s knowledge of the business, the Board undertakes
site visits to meet with operational line management and each
director is provided with materials and regular briefing papers that are relevant
to a director understanding the business for the fulfilment of
the directors’ duties.
Managing director
In relation to the performance of the Managing Director, the non-executive
directors of the Board as a whole evaluate the Managing
Director through set key performance indicators, and after considering the
recommendation of the Organisation & Remuneration
Committee. As a result of this evaluation, the Organisation & Remuneration
Committee, having regard to comparative remuneration and
independent advice, recommends the compensation of the Managing Director for
approval by the Board.
Finance director and other senior executives
For the Finance Director and other senior executives, performance evaluation
is set out in the company’s Policy and Procedures Manual. A
performance evaluation is carried out by the executive’s immediate manager.
The performance management system sets goals and
objectives for senior executives and managers, provides a framework for assessing
and measuring standards of performance as set out in
the executive’s position description and sets performance targets for
the coming year. The Organisation & Remuneration Committee
reviews and recommends the reward for the Managing Director’s direct
reports.
The review of the performance of the Board, its individual directors, the
Managing Director, the Finance Director and senior executives is
consistent with ASX Corporate Governance Recommendation 8.1.
Share trading by directors and senior executives
Directors are subject to the Corporations Act 2001 which restricts their buying,
selling or subscribing for securities in Wattyl Limited if they
are in possession of inside information. The Board has also adopted a formal
policy for share dealings by directors and senior executives.
According to the policy, directors and senior executives must advise the Board
before dealing in Wattyl Limited shares. Apart from cases of
exceptional circumstances, permission to directors and senior executives to
deal in the company’s shares is restricted to periods of six
weeks following the release of annual and half-yearly results and within six
weeks following the Annual General Meeting of the company
shareholders. A waiting period of one business day will apply after each of
those events. The Board will not authorise trading in Wattyl
Limited shares by directors or senior executives if, in its opinion, that director
or executive has knowledge of any fact that may affect the
share price. The Board also accepts responsibility for reviewing any transactions
between the company and directors or any interests
associated with directors, to ensure the structure and the terms of the transaction
are in compliance with the Corporations Act 2001 and
are appropriately disclosed.
Any director must notify the Company Secretary of any change in the director’s
legal or beneficial interest in company securities so as to
ensure compliance with the disclosure requirements of the ASX Listing Rules.
The policy on share trading by directors and senior executives as set out
above complies with ASX Corporate Governance
Recommendation 3.2.
Independent professional advice
Directors have the right, in connection with their duties and responsibilities
as directors, to seek independent professional advice at the
company’s expense. Prior approval of the Chairman is required, which
will not be unreasonably withheld.
This procedure is consistent with ASX Corporate Governance Recommendation 2.1 in relation to independence of directors.
Board access to management
Non-executive directors have reasonable access to all employees of the company.
Risk management & compliance
The Board views risk management as integral to its objective of creating and
maintaining shareholder value and the successful execution of
its strategies. The Board has determined it will retain responsibility for
Risk Management and Compliance and considers that given its size,
with four (4) directors who currently are non-executive, the Board can as a
whole discharge the processes as set out in ASX Corporate
Governance Recommendation 7.1.
The Board is responsible for the oversight of the risk management framework
and has delegated responsibility for the implementation of
the risk framework to management. The board confirms Wattyl’s Risk Management
policy and strategy based on quarterly updates
provided by management. The Board are appraised on Wattyl’s ‘Risk
Profile’ and review the adequacy and effectiveness of the risk
management system at least annually. The Board review the Risk Assessment Report
submitted by management on a regular basis.
Management has responsibility for implementation of the risk management framework
and have delegated day-to-day responsibility for
implementation of the risk management framework to the Executive Risk and Compliance
Committee. The role of the Committee is to
provide management assurance that the major business risks are being identified
and consistently assessed and that management plans
are in place to address risk. The Committee, comprising the senior management
of the company, reviews and monitors the day-to-day risk
activities, and reports to management and the Board on such matters.
Located on the company’s website www.wattyl.com.au in the Corporate
Governance section is the company’s Risk Management Policy
which clearly sets out the roles and respective accountabilities of the Board
and management.
The company’s risk management procedures are consistent with ASX Corporate Governance Recommendations 7.1 and 7.3.
The company also recognises the importance of environmental and occupational
health and safety (OH&S) and is committed to the highest
levels of performance. To help meet this objective, the company has a programme
in place to ensure these issues are managed in a
structured manner, which will allow the company to:
• monitor its compliance with all relevant legislation;
• continually assess and improve the impact of its operations on the environment;
• encourage employees to actively participate in the management of environmental
and OH&S issues;
• work with trade associations representing the consolidated entity’s
businesses to raise standards; and
• use energy and other resources efficiently.
Internal audit
The internal auditors assist the Company in ensuring compliance with internal
controls and risk management programmes by regularly
reviewing the effectiveness of the above-mentioned compliance and control systems.
The Audit Committee is responsible for approving
and reviewing the programme of internal audit visits to be conducted each financial
year and for the scope of the work to be performed.
An independent review to assess and evaluate the quality of the internal audit
function is undertaken once every year. The Audit Committee
is responsible for recommending to the Board the appointment and dismissal
of the internal auditor. The internal audit function is
outsourced and has access to both the Chairman of the Board and the Chairman
of the Audit Committee.
Compliance, ethics and integrity
The company seeks to maintain high standards of integrity and is committed to ensuring that Wattyl conducts its business in accordance
with high standards of ethical behaviour.
The Board requires that employees comply with the spirit as well as the letter
of all laws and other statutory requirements governing the
conduct of Wattyl’s activities in each country in which it operates.
The Board has adopted a “Directors’ Code of Conduct” that is applicable to all directors.
The company has also adopted a “Code of Conduct” which is applicable
to all employees of the company and considers the interests of all
stakeholders.
Located on the company’s website www.wattyl.com.au in the Corporate Governance
section are the separate Codes of Conduct for
directors and the company as a whole.
The respective “Codes of Conduct” are consistent with ASX Corporate
Governance Recommendations 3.1 and 10.1. Internal monitoring
procedures remain a focus of management as required by ASX Corporate Governance
Recommendation 10.1.
Board committees
The Board has two committees, these being an Audit Committee and the Organisation & Remuneration
Committee, to assist in the
execution of its duties and to allow detailed consideration of complex issues.
Each of these committees has its own written charter setting
out its role and responsibilities, and the manner in which the committee is
to operate. All matters determined by committees are submitted
to the full Board as recommendations for Board consideration and decision.
The Board has determined it will act as the Nomination Committee. Given the
size of the Board with four (4) directors who currently are
non-executive, the Board considers that it can as a whole discharge the processes
as set out in ASX Corporate Governance
Recommendation 2.4.
When acting as the Nomination Committee the full Board will:
-conduct an annual review of the independence of directors;
-propose and consider candidates for Board vacancies;
-oversee the annual performance assessment program;
-oversee Board succession including the succession of the Chair;
-assess the effectiveness of the induction process for new directors; and
-review the structure, size and composition of the Board and assess whether
any changes are required.
The Board has a separate Organisation & Remuneration Committee that discharges
some of the duties that could otherwise be dealt with
by a Nomination Committee. This Committee is noted below.
Audit committee
Members
Michael Brown (Chair)
John Ingram
Mark Luby
Qualifications of audit committee members
Details of these directors’ qualifications and attendance at audit committee
meetings are set out in the director’s report on pages 24-39.
The membership of the Audit Committee consists of three (3) non-executive directors
who are independent. The Chairman of the
Committee is not the Chairman of the Board. The Committee determines the frequency
of meetings but as a minimum, meetings are held
at least four times per year. At least twice per annum the members of the Audit
Committee meet with the company’s internal and external
auditors in the absence of company employees and management. The Audit Committee
reports to the Board after each Committee
meeting. Papers and copies of the minutes are provided for all directors.
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