The board recognises that it currently does not comply with all of the ASX best practice guidelines. The board is committed to a program aimed at developing its governance framework guided by the ASX Best Practice Recommendations.
Role of the Board
The role of Coote Industrial’s Board is to protect and promote the interests of the company and to represent its shareholders whilst considering the interests of other stakeholders including employees, customers, suppliers, wider communities and the environment. It does this according to the principles of good corporate governance intending to fulfil the company’s responsibilities as a corporate citizen.
The board operates under a Board Charter; which describes the processes used by the Board to:
- Appoint, review the performance of the CEO
- Approve key strategic decisions including, but not limited to, acquisitions and divestments
- Approve annual revenue, operating expenditure, and capital budgets
- Approve significant changes in organisational structure
- Determine and approve the remuneration of the CEO
- Approve the remuneration of executive management, and
- Formally adopt any communication to regulators and shareholders as may be required by the company constitution, statute,or other regulation. The board may change by resolution any power reserved to itself.
Executive Delegation
Other than those matters reserved by the board to itself, the board delegates to the CEO all authority to achieve the company’s objective consistent with this Governance Charter, the company constitution, statute or other regulation. The CEO, in conjunction with executive management, will prepare a long-term strategic plan and a yearly operational plan for approval by the board.
Board Structure
The skills, experience and expertise relevant to the position of each director who is in office at the date of the annual report and their term of office are detailed earlier in this Annual Report.
Meetings of the Board
The board meets formally at least four times per year and on other occasions as required. On the invitation of the Board,members of senior management attend and make presentations at Board meetings. In addition to the formal meetings the Board frequently meets to consider the strategic direction of the company.
Directors report
Retirement and Re-election
The constitution of the company requires one third of the directors, other than the managing director, to retire from office at each annual general meeting. Directors who have been appointed by the Board are required to retire from office at the next following annual general meeting and are not taken into account in determining the number of directors to retire at that annual general meeting.
Directors cannot hold office for a period in excess of three years beyond the third annual general meeting following their appointment without submitting themselves for re-election. Retiring directors are eligible for re-election by shareholders.
Board Membership
Appointment
Board members are nominated by the board and their appointment confirmed by a vote of shareholders. The board will have a minimum of one non-executive director who will be free of material relationships with the company and who would be reasonably considered by shareholders to be independent. This policy is not consistent with ASX Principle 2 however the board considers this structure appropriate at this stage of the company’s development.
The expectation of directors is that they will be of unquestioned integrity and honesty; will understand and behave to the highest standards of corporate governance and will be prepared to question, challenge, and criticise matters of strategy.
Directors will be appointed according to the contribution they can make in meeting strategic skill requirements of the company. Remuneration of directors will be transparent and reported in its entirety to shareholders. Directors are expected to continue to develop their skills through ongoing education and training.
Board Access to Information and Independent Advice
All directors have unrestricted access to employees of the group and, subject to the law, access to all company records and information held by group employees and external advisors. Each director may obtain independent professional advice to assist the director in the proper exercise of powers and discharge of duties as a director or as a member of a Board Committee. In such cases, the chairman and company secretary must be advised and a copy of the advice made available to all directors.
Conflicts of Interest
Directors are required to notify the Board of any real or perceived conflicts of interest that may occur from time to time. The Board has adopted the use of formal standing notices in which they disclose any material personal interests they have and the relationship with the affairs of the company. Directors are required to provide an updated notice if they acquire any new material personal interests or if there is any change to the nature and extent of their previously disclosed interest.
Performance Evaluation
A performance evaluation of the board and all board members is scheduled to occur in the 2008 financial year.
Reward and Remuneration
Reward and remuneration of directors and executives will be objectively linked to obtaining the company objective and consistent with the financial performance of the company. There will be complete transparency to shareholders regarding reward and remuneration of board members and senior executive management.
Committees
Since listing the Board has established an Audit Committee, to assist it in exercising its responsibilities. The Audit Committee monitors internal control policies and procedures designed to safeguard company assets and to maintain the integrity of financial reporting.
The specific responsibilities set out in its charter include:
- In conjunction with the internal and external auditors, assure the integrity of financial statements
- Recommend to the board appointment of and review the performance of the external auditor
- Determine the remuneration of the external auditor
- Oversee the integrity of the internal and external audit process, and
- Ensure there is a process to identify the likelihood and impact of financial risk and that this process is actively managed
Audit Committee
The members of the Audit Committee at the date of this report are:
Mr Donald Hector (Chairman)
Senior staff and any other persons considered appropriate, attend meetings of the Audit Committee by invitation. Details of the number of meetings held and attended by the members of the Audit Committee can be found in the Director’s Report. The board has established a Terms of Reference to guide the activities of the committee.
Click here to view the Terms of Reference
Click here to view the Internal Audit Charter
Financial Reporting
Consistent with ASX Principle 4, and in accordance with section 295A of the Corporations Act 2001, the company’s financial report preparation and approval process for the year ended 30 June 2007, involved both the Chief Executive Officer and Chief Financial Officer providing a written statement to the Board that, in their opinion:
- the company’s financial report presents a true and fair view of the company’s financial condition and operating results and is in accordance with applicable accounting standards, and
- the company’s financial records for the financial year have been properly maintained in accordance with section 286 of the Corporations Act 2001.