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The board of Climax Mining Limited has the ultimate responsibility to its shareholders for the strategy and performance of the company in general. The Board of Climax is dedicated to fulfilling these duties in a lawful and professional manner, and with the utmost integrity and objectivity.
In the conduct of its duties the Board aspires to best practice governance processes thereby ensuring Climax is governed in the best interests of the company as a whole.
The Board has established Corporate Governance Guidelines in the form of a Board Charter and a number of committees to assist and manage responsibilities. The Audit Committee the Risk Management Committee and the Remuneration Committee, each have a written charter defining the role and responsibility of the committee within the governance framework of the company. Therefore the purpose of the Board Charter is to articulate and formalise the corporate governance framework within which the company and
its controlled entities operate in. As such, it establishes the guidelines within which the directors and officers are to operate as they carry out their respective roles. It does not in anyway constitute legal advice or act as a substitute for legal advice.
In summary, the key components of Climax Mining Limited’s Board Charter are as follows:
The Role of the Board
The Board is ultimately responsible for all matters relating to the running of the company.
The Board’s role is to govern rather than manage the company. In governing the company, the directors must act in the best interests of the company as a whole. It is the role of senior management to manage the company in accordance with the direction and delegations of the Board and the responsibility of the Board to oversee the activities of management in carrying out these delegated duties.
| The Board has the final responsibility for the successful operations of the company. The principal functions and responsibilities of the Board include the following: |
- providing leadership to the company;
- overseeing the development and implementation of an appropriate strategy;
- ensuring corporate accountability to the shareholders;
- overseeing the control and accountability systems that ensure the company is progressing towards the goals set by the Board and in line with the company’s purpose, the agreed corporate strategy, legislative requirements and community expectations;
- ensuring robust and effective risk management, compliance and control systems (including legal compliance) are in place and operating effectively;
- being responsible for the company’s senior management and personnel;
- delegating appropriate powers to the CEO, management and committees;
- making all decisions outside the scope of these delegated powers;
- ensuring the performance of the board and its members is regularly reviewed; and
- identifying appropriate candidates for Board nomination.
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The detail of some Board functions will be handled through board committees. However, the Board as a whole is responsible for determining the extent of powers residing in each committee and is ultimately responsible for accepting, modifying or rejecting committee recommendations.
Number of Directors
The Board has determined that while the Constitution provides for a majority of eight directors, consistent with the size of the company and its activities, the Board shall be comprised of five directors, the majority of whom, including the chairman are non-executive.
Appointment of Directors
The directors may at any time appoint any person as a director to fill a casual vacancy or as an additional director provided there are not more than eight directors. The newly appointed director may hold office until the next AGM and is eligible for re-election at that meeting.
Skills Required on the Board
The Board, through the Nomination Committee, will maintain a regularly reviewed capabilities matrix.
Duration of Appointment
In the interest of ensuring a continual supply of new talent to the Board, directors will serve for a maximum of four terms (up to a maximum of twelve years) unless there are exceptional circumstances.
Vacation of Office
It is envisaged that directors shall remain on the Board until required to vacate the office by law or as detailed in the Constitution.
The Role of Individual Directors
Directors share the ultimate responsibility for the company’s overall success; therefore, directors have an individual responsibility to ensure that the Board is undertaking its responsibilities as set out in its Statement of Board Functions.
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Directors’ Code of Conduct
Directors and key executives of the company will abide with legal requirements and agreed ethical standards: |
- Directors will act honestly, in good faith and in the best interests of the company and its shareholders.
- Directors acknowledge a duty to use due care and diligence in fulfilling the functions of office and exercising the powers attached to that office.
- Directors recognise that the primary responsibility is to the company's shareholders as a whole but should, where appropriate, have regard for the interest of all stakeholders of the company.
- A director will not make improper use of information acquired as a director.
- A director will not take improper advantage of the position of director.
- A director will not allow personal interests, or the interest of any associated person, to conflict with the interest of the company.
- Each director will exercise independent judgment and take all reasonable steps to be satisfied as to the soundness of all decisions taken by the board of directors.
- Confidential information received by a director in the course of the exercise of directorial duties remains the property of the Company and it is improper to disclose it, it or allow it to be disclosed, unless that disclosure has been duly authorised or is required by law.
- Directors will not engage in conduct likely to bring discredit upon the company.
- Each director will, at all times, comply with the spirit, as well as the letter, of the law and with the principles of this Code.
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Expectations of Directors in Board Process
It is expected that directors shall, in good faith, behave in a manner that is consistent with generally accepted procedures for the conduct of meetings at all meetings of the Board.
Conflict of Interest and Related Party Transactions
Directors must disclose to the Board actual or potential conflicts that may or might reasonably be thought to exist between the interests of the director and the interests of the company. On appointment, directors will have an opportunity to declare any such interests and they will be entered into the company’s Register of Ongoing Conflicts of Interest.
Related party transactions include any financial transaction between a director or officer and the company and will be reported in writing to each Board meeting.
The Role of the Chairman
The Chairman’s role is a key one within the company. The Chairman is considered the "lead" director and utilises his/her experience, skills and leadership abilities to facilitate the governance processes.
There are two main aspects to the Chairman’s role. They are the Chairman’s role within the boardroom and the Chairman’s role outside the boardroom.
The Role of the Company Secretary
The Company Secretary is charged with facilitating the company’s corporate governance processes and for ensuring that the Board processes and procedures run efficiently and effectively. The company secretary is accountable to the Board, through the chairman, on all governance matters and reports directly to the chairman as the representative of the Board.
The Role of the CEO
The Chief Executive Officer (CEO) is responsible for the attainment of the company’s goals and vision for the future, in accordance with the strategies, policies, programs and performance requirements approved by the Board. The position reports directly to the Board.
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Board Meetings |
- The Board will hold six scheduled meetings per year and other meetings whenever special circumstances require it. Committees will generally meet on a semi-annual basis, unless otherwise agreed.
- The Board will meet at company’s office located at Level 14 BT Tower, 1 Market Street, Sydney. Board meetings may be held by conference call, with some or all of the participating directors at another location.
- In order for a decision of the Board to be valid, a quorum of directors must be present. In accordance with clause 55 of the company’s constitution a quorum is two directors present and entitled to vote. Questions arising at Board meetings are to be decided by a majority of votes of directors who are present and entitled to vote. The chairman may exercise a casting vote in addition to any other vote the chairman may have.
- Matters requiring an urgent decision of the directors without holding a Board meeting can be dealt with in accordance with clause 54 of the company’s constitution – Written resolutions of Directors.
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Committees
The Board currently has three committees:
1. Audit Committee
The Audit Committee is responsible for reviewing the integrity of the Company’s financial statements and financial reporting systems, accounting practices, corporate control policies, corporate governance policy and making recommendations for the appointment of the external auditor, evaluating the external auditor’s qualifications, performance and independence.
For more information on the Audit Committee Charter, click here.
2. Remuneration Committee
The remuneration committee reviews and makes recommendations to the board on remuneration packages and policies applicable to the executive officers and directors of the group. It is also responsible for reviewing and making recommendations to the board regarding the company’s incentive policies for employees, participation in the employee share option plan, superannuation entitlements, recruitment, retention and termination policies and procedures for senior management.
For more information on the Remuneration Committee Charter, click here.
3. Risk Management Committee
The role of the Risk Management Committee is to oversee the establishment, implementation and annual review of the Company’s risk management and control framework. Management is required to ensure that risks are managed with the appropriate systems and controls. The effectiveness of the risk management systems are monitored by the Board and periodically reviewed.
For more information on the Risk Management Committee, click here.
The Board and Strategy
Each year the Board will approve a formal strategic planning process that articulates the respective roles and levels of involvement of the Board, senior management and other employees and will review the strategic plan for the Climax group.
Hospitality and Gifts
Directors and officers will not solicit courtesies and will not accept gifts, services, benefits or hospitality that might influence, or appear to influence, the directors’ and officers’ conduct in representing the company.
Monitoring
Another essential function of the Board is to monitor the performance of the organisation in implementing its strategy and overall operational performance. The Board assesses performance against achievable targets and obtains a third party assessment of performance.
Delegation of Authority
Directors are responsible for any delegations of their responsibilities with regard to corporate operations. As such, they decide as a Board what company matters are delegated to either specific directors or management. In addition, they outline what controls are in place to oversee the operation of these delegated powers.
All such delegations are implemented by executing a relevant power of attorney and associated rules for its valid use. Full documentation of all powers of attorney and associated rules are held in the company's safe custody.
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Decisions requiring Board approval
The following decisions must be referred to the Board for approval: |
- acquiring or selling shares of the company;
- acquiring, selling or otherwise disposing of property in excess of $250k of the company;
- founding, acquiring or selling subsidiaries of or any company within the company, participating in other companies or dissolving or selling the company’s participation in other companies;
- acquiring or selling patent rights, rights in registered trade marks, licences or other intellectual property rights of the company;
- founding, dissolving or relocating branch offices or other offices, plants and facilities;
- starting new business activities, terminating existing business activities or initiating major changes to the field of the company’s business activities;
- approving and/or altering the annual business plan (including financial planning) for the company or any part of the company;
- taking or granting loans which exceed $1 million (budgeted) or $250k unbudgeted (including, without limitation, the placing of credit orders, issuing of promissory notes or loans against IOUs);
- granting securities of any type;
- granting loans to company officers or employees and taking over guarantees for the company’s officers and employees;
- determining the balance sheet strategy for the company or any part of the company;
- entering into agreements for recurring, voluntary, or additional social benefits, superannuation agreements or agreements for general wage and salary increases;
- determining the total amount of bonuses and gratuities for company officers and employees;
- determining the appointment, termination, prolongation of employment or amendment to conditions of employment of members of the Board; and
- granting or revoking a power of attorney or limited authority to sign and/or act on behalf of the company.
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Insurance and indemnities
The company holds a Directors’ and Officers’ Insurance Policy, which insures directors against costs and expenses which may be incurred in defending proceedings and against other liabilities which may arise from their positions.
Pursuant to agreements entered into between the company and each director, the company has agreed to indemnify the directors in terms of the Directors’ indemnity and Access Deeds approved by shareholders at the general meeting of the company held on 26 November 1997.
Board and director evaluations
The Board considers the ongoing development and improvement of its own performance as a critical input to effective governance. As a result, the Board undertakes an annual evaluation of Board and director performance.
Board committee evaluations
The Board has set a number of expectations of its committees. The Board annually reviews the performance of the Committees and itself against these expectations.
Senior executive evaluations
All senior executives at the company are subject to an annual performance evaluation. In June each year, senior executives (including the CEO) establish a set of performance targets with their superior.
An informal assessment of progress is carried out in December. A full evaluation of the executive’s performance against the agreed targets takes place in June the following year.
Non-Executive Directors
Non-executive directors are paid their fees out of the maximum aggregate amount approved by shareholders for the remuneration of non-executive directors. The sum each non-executive director is paid is determined by the Board or Remuneration Committee from time to time.
Review of Board Charter
The Board Charter will be regularly reviewed and updated to reflect changes in the legal framework within which the company operates, and amendments and developments in Board policies and procedures.
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