The Directors of Raw Capital Partners Limited (“Raw Capital Partners” or the “Company”) are responsible for the good corporate governance of the Company and use as a benchmark, the Australian Stock Exchange ("ASX") Corporate Governance Council's Principles of Good Corporate Governance and Best Practice Recommendations ("ASX Principles") which are guidelines in respect to governance.
The Company's corporate governance policies and/or practices are largely consistent with those of the ASX Principles. Where these policies or practices do not fully correlate with the recommended ASX Principles, the Company does not consider that the ASX Principles are appropriate for the Company due to its smaller size. These instances are highlighted in this corporate governance statement.
The Board has adopted a Corporate Governance Charter which is available for inspection in full here.
The Board has set out in its corporate governance charter, the respective roles and functions for itself, individual directors, the Managing Director and the Company Secretary. The Board has the final responsibility for the successful operations of the Company.
The Boards' roles are to approve the Company’s strategic goals, plans and performance targets and to ensure that appropriate management, policies, procedures and systems are in place to manage risk, optimise business performance and maintain high standards of ethical behaviour and legal compliance. The functions of the board include:
Directors are required to receive a letter of appointment and each staff member receives a position description of their role as well as an accompanying formal letter of appointment.
The Board has adopted a formal written statement regarding delegations of authority to management. Mr D Wong, the Managing Director, is responsible to the Board for the Company’s day-to-day affairs and is accountable to the Board as a whole.
The Company’s Constitution calls for at least three but not more than nine Directors, and does not require a Director to hold shares.
The Directors of the Company are Peter J. McKnoulty, Non-executive Independent Director (Chairman), Hugo S.K. Chan, Non-executive Independent Director, and Douglas Wong, Executive Director (Managing Director).
The current Board is comparatively small but the Directors believe this is appropriate given the size of the Company. The qualifications, skills, experience, and terms of office of the Directors are stated in the Directors’ Report. In the Board’s view, it retains an appropriate mix of skills to discharge its role and responsibilities.
The Board will review its composition on an annual basis to ensure that it continues to have the appropriate mix of skills and experience necessary for the conduct of the Company’s business.
A majority of the Board (Messrs. McKnoulty and Chan) are Non-Executive Directors. In the Board’s view, they also satisfy the criteria in the ASX Principles for assessing the independence of directors (which criteria have been adopted by the Board in its corporate governance charter). As a result the Board believes there is an appropriate balance between executive and non-executive independent directors which results in a sufficient level of independent overview and decision-making at the Board level.
The Company's constitution contains provisions on director retirement, essentially requiring that a director not serve longer than three years without re-submitting to an election.
The Board as a whole is responsible for assessment of the necessary and desirable skills and competencies of Board members, review of Board succession plans and recommending appointment and removal of Directors.
Directors are initially appointed by the full Board, subject to election by the shareholders at the next annual general meeting. Shareholders will be provided with information on any candidates that stand for election.
In the event that the Board decides to fill a vacancy or expand its size, the Board will develop a panel of candidates and interview the candidates using selection criteria which address the skills and competency needs of the Board as developed by the Board. The candidate(s) who best fit(s) the criteria is (are) to be selected.
When considering the potential reappointment of an existing director, the Board will take into account the individual’s performance as well as the skills and experience mix required by the Board into the future. When considering vacancies, the Board will take into account a candidate’s capacity to enhance the mix of skills and experience of the Board.
The Board meets as necessary to discharge its role and functions. Senior management and consultants attend Board meetings, as appropriate, and are available for questioning by Directors.
A standard agenda for regular Board meetings has been developed which facilitates provision by management of information and reporting as required by the Board. Agenda papers are, where possible, always provided in advance of the meeting.
The Managing Director and the Chief Financial Officer (or equivalent) are required to state in writing to the Board that the Company’s financial reports present a true and fair view in all material respects of the Company’s financial condition and operational results and are in accordance with relevant accounting standards.
The external auditor is invited to annual general meetings to answer questions about the conduct of the audit and the audit report.
The Board has established an Audit Committee to assist the Board in the discharge of its responsibilities. This Committee makes recommendations to the Board. Given the nature of the Company’s operations, the Board considers that there is no need for additional committees at the current time.
Audit Committee
The Audit Committee has a formal charter set out in the corporate governance charter. The Committee members are Peter J. McKnoulty, Non-Executive, independent Director (Committee Chairman) and Hugo S.K. Chan, Non-Executive, independent Director. Details of the skills and experience of the committee members are set out in the Directors’ Report.
The role of the Committee is to assist the Board to fulfil its responsibilities in relation to the Group’s internal and external financial reporting, the monitoring of internal financial control structures, appointment and monitoring of external and internal auditors, and monitoring legislative compliance on financial matters.
The functions of the Audit Committee include:
Currently the Audit Committee structure meets a number of the requirements of the ASX Principles as it consists of only non-executive, independent Directors. However, the Audit Committee does not meet the requirements that 1) the committee chairperson not be the board chairperson and 2) the committee consist of at least three members. The total Board only consists of three members including an executive director. The Board considers that given the Board size and composition, the size and composition of the Audit Committee is appropriate and does not hamper the Committee’s independence or ability to carry out its role and functions.
The Committee meets as and when required to discharge its functions.
Nomination Committee
The ASX Principles state that the Board should establish a Nomination Committee, consisting of a minimum of three members, the majority being independent Directors with the Chair being an independent Director.
Due to the Company’s relatively small size and the fact that its Board is comprised of three Directors, the Board considers it is not necessary or efficient to appoint a separate Nomination Committee. Consequently the usual functions and responsibilities of a Nomination Committee are performed by the entire Board.
The Company’s corporate governance charter contains the policy in respect of Director and executive remuneration. The policy is summarised in the Remuneration Report section of the Directors' Report.
The basis of setting remuneration policy is set out in the Remuneration Report.
Risk management is considered a key governance and management process. The Board oversees risk management and the corporate governance charter sets out the objectives and requirements of the Company's risk management system.
Overview of financial risks is a part of the Audit Committee charter but non-financial risks are overviewed by the Board. The Managing Director is charged with ensuring risks are appropriately managed on a day to day basis. The Company will update the risk profile as considered appropriate from time to time. The Board is to receive a quarterly report on those areas of risk identified. In addition, the Managing Director and CFO (or equivalent) are to provide a written assurance to the Board that the risk management system is effective, efficient and accurately reflected in the Company’s financial statements.
The Company undertakes internal quality/process audits across all areas of the company on a six monthly basis. These audits are performed by a qualified and independent person with prior experience with the ISO 9001:2000 standard for Quality Management Systems.
The Board expects the highest levels of integrity and ethics from Directors and employees.
To assist the Board to carry out its functions, it has a Code of Conduct to guide the Directors, the Managing Director and staff in the performance of their roles. This code is set out in the corporate governance charter. The scope of the code includes requirements of directors and staff that they:
In addition, the Company has a Code of Behaviour Policy applicable to staff.
The Board has adopted a policy on trading in the Company’s shares. This is contained in the corporate governance charter.
In summary, Directors, officers and employees must not buy, sell or subscribe for securities in the Company if they are in possession of ‘inside information’. Directors, officers and employees may trade in the Company’s securities, subject to the insider trading restrictions, within the four week period following each half-yearly profit announcement or following the date of issue of a prospectus. Directors must discuss their intention to trade in the Company’s securities with the Chairman of the Company prior to trading. In unusual or pressing circumstances and subject to the insider trading restrictions above, Directors, officers and employees may trade outside the specified periods after discussion with the Chairman.
To reinforce and assist the Board policy in the charter, an Insider Trading Policy has been adopted in relation to staff.
The Board understands that prompt disclosure of price-sensitive information is central to the efficient operation of the ASX market. The Board continually reviews Company developments to ensure that it complies with ASX requirements on disclosure – both continuous and periodic.
The Company has detailed policies and procedures regarding disclosure, which are contained in the corporate governance charter. These include procedures covering:
The Company respects the rights of its shareholders and to facilitate the effective exercise of those rights the Company is committed to:
The Company’s corporate governance charter contains polices and procedures to ensure this occurs, including communicating with shareholders through releases to the market via the ASX, the Company’s website, information provided directly to shareholders, at general meetings of the Company and via a telephone number and email address for shareholders to make enquiries.
Financial reports, ASX announcements, media releases and significant presentations and speeches and other important materials are posted on the Company's website.
The Board considers the evaluation of its own and senior executive performance as important in establishing a culture of performance and accountability. An evaluation process is contained in the corporate governance charter.
Board and Director Evaluations
The Board undertakes an annual evaluation of Board and Director performance. Given the relatively small size of the Board this will consist of an informal discussion between the Chairman and Directors. The Board will not endorse the reappointment of a Director who is not satisfactorily performing the role.
Senior executive evaluations
All senior executives at the Company are to be subject to an annual performance evaluation based on a set of performance targets set with her or his superior. These targets are to be aligned to overall business goals and the Company’s requirements of the position. In the case of the Managing Director, these targets are negotiated between the Managing Director and the Board. Performance pay components of executives’ packages are dependent on the outcome of the evaluations.
The Directors have the right, in connection with their duties and responsibilities, to obtain independent professional advice at the Company’s expense. Prior written approval of the Chairman is required, but will not be withheld unreasonably.
A Director may require the Company to enter into a Deed of Access which confirms that Director’s right of access to Company records under the Corporations Law. In addition the corporate governance charter contains procedures for a Director’s access to information and staff between board meetings.
In accordance with the Company’s Constitution, Directors must inform the Board if they have any interest that could conflict with duties owed to the Company. A Director may not be present during consideration of, or vote on, a matter where a conflict arises (unless permitted by the Corporations Act).
When appointed to the Board, all new Directors will receive an appropriate induction to familiarise them with the Company’s business, strategy, personnel, policies, and relevant current issues. The Company Secretary is responsible for coordinating the induction.
The Company does not currently have a formal induction procedure for new executive staff, but given the relatively small size of management, the Board considers that this is not necessary. However, the Managing Director is required to ensure that new staff are adequately briefed.
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