CORPORATE GOVERNANCE STATEMENT 2018
The Board of Greenpower Energy Limited (‘Greenpower’) is responsible for the corporate governance of the Consolidated Entity. The Board guides and monitors the business and affairs of Greenpower on behalf of the shareholders by whom they are elected and to whom they are accountable. This statement reports on Greenpower’s key governance principles and practices.
1. COMPLIANCE WITH BEST PRACTICE RECOMMENDATIONS
The Company, as a listed entity, must comply with the Corporations Act 2001 and the Australian Securities Exchange (ASX) Listing Rules. The ASX Listing Rules require the Company to report on the extent to which it has followed the Corporate Governance Principles and Recommendations published by the ASX Corporate Governance Council. Where a recommendation has not been followed, that fact is disclosed, together with the reasons for the departure. For further information on corporate governance policies adopted by the Company, refer to the corporate governance section of our website: www.greenpowerenergy.com.au
The table below summaries the Company’s compliance with the Corporate Governance Council’s Principles and Recommendations:
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2. THE BOARD OF DIRECTORS
2(a) Roles and Responsibilities of the Board
The Board is accountable to the shareholders and investors for the overall performance of the Company and takes responsibility for monitoring the Company’s business and affairs and setting its strategic direction, establishing and overseeing the Company’s financial position.
The Board is responsible for:
- Appointing, evaluating, rewarding and if necessary the removal of the Chief Executive Officer (“CEO”) and
senior management; - Development of corporate objectives and strategy with management and approving plans, new investments, major capital and operating expenditures and major funding activities proposed by management;
- Monitoring actual performance against defined performance expectations and reviewing operating information to understand at all times the state of the health of the Company;
- Overseeing the management of business risks, safety and occupational health, environmental issues and community development;
- Satisfying itself that the financial statements of the Company fairly and accurately set out the financial position and financial performance of the Company for the period under review;
- Satisfying itself that there are appropriate reporting systems and controls in place to assure the board that proper operational, financial, compliance, risk management and internal control process are in place and functioning appropriately;
- Approving and monitoring financial and other reporting;
- Assuring itself that appropriate audit arrangements are in place;
- Ensuring that the Company acts legally and responsibly on all matters and assuring itself that the Company has adopted a Code of Conduct and that the Company practice is consistent with that Code; and other policies; and
- Reporting to and advising shareholders.
Other than as specifically reserved to the Board, responsibility for the day-to-day management of the Company’s business activities is delegated to the CEO and senior management.
2(b) Board Composition
The Directors determine the composition of the Board employing the following principles:
- the Board, in accordance with the Company’s constitution must comprise a minimum of three directors;
- the roles of the Chairman of the Board and of the CEO should be exercised by different individuals;
- the majority of the Board should comprise directors who are non-executive;
- the Board should represent a broad range of qualifications, experience and expertise considered of benefit to the Company; and
- the Board must be structured in such a way that it has a proper understanding of, and competency in, the current and emerging issues facing the Company, and can effectively review management’s decisions.
The Company’s constitution requires one-third of the directors (or the next lowest whole number) to retire by rotation at each Annual General Meeting (AGM). The directors to retire at each AGM are those who have been longest in office since their last election, or a Director appointed without shareholder approval. Where directors have served for equal periods, they may agree amongst themselves or determine by ballot who will retire. A director must retire in any event at the third AGM since he or she was last elected or re-elected. Retiring directors may offer themselves for re-election.
A director appointed as an additional or casual director by the Board will hold office until the next AGM when they may be re-elected. The CEO is subject to retirement by rotation. Any director appointed as an additional or casual director, is not to be taken into account in determining the number of directors required to retire by rotation.
2(c) Board Membership
The Board is currently comprised of two non-executive directors and one executive director. Details of the Board member’s experience, expertise and qualifications are set out in the Directors’ Report of the Annual Report under the heading “Directors”.
[table id=5 /]2(d) Chairman and CEO
The Chairman is responsible for:
- leadership of the Board;
- the efficient organisation and conduct of the Board’s functions;
- the promotion of constructive and respectful relations between Board members and between the Board and management;
- contributing to the briefing of directors in relation to issues arising at Board meetings;
- facilitating the effective contribution of all Board members; and
- committing the time necessary to effectively discharge the role of the Chairman.
The CEO is responsible for:
- implementing the Company’s strategies and policies; and
- the day-to-day management of the Consolidated Entity’s business activities.
The Board specifies that the roles of the Chairman and the CEO (currently undertaken by G King) that when appropriate are to be undertaken by separate people.
2(e) Independent Directors
The Company recognises that independent directors are important in assuring shareholders that the Board is properly fulfilling its role and is diligent in holding senior management accountable for its performance. The Board assesses each of the directors against specific criteria to decide whether they are in a position to exercise independent judgment.
Directors of Greenpower are considered to be independent when they are independent of management and free from any business or other relationship that could materially interfere with, or could reasonably be perceived to materially interfere with, the exercise of their unfettered and independent judgement.
In making this assessment, the Board considers all relevant facts and circumstances. Relationships that the Board will take into consideration when assessing independence are whether a director:
- is a substantial shareholder of the Company or an officer of, or otherwise associated directly with, a substantial shareholder of the Company;
- is employed, or has previously been employed in an executive capacity by the Company or another group member, and there has not been a period of at least three years between ceasing such employment and serving on the Board;
- has within the last three years 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;
- is a material supplier or customer of the Company or other group member, or an officer of or otherwise associated directly or indirectly with a material supplier or customer; or .
- has a material contractual relationship with the Company or another group member other than as a director.
- has been a director of the entity for such a period that his or her independence may have been compromised.
The Board notes that the mere fact that a director has served on a Board for a substantial period does not mean that he or she has become too close to management to be considered not independent. The Board will regularly assess the independence of all and any director who serves on the Board.
Family ties and cross-directorships may be relevant in considering interests and relationships which may affect independence, and should be disclosed to the Board.
The Company does comply with ASX Recommendation 2.4, as there is a majority of non-executive directors and there is a majority of independent directors on the Board. In accordance with the definition of independence above, two of the directors of the Company are considered to be independent.
The Company maintains a mix of directors from different backgrounds with complementary skills and experience.
In recognition of the importance of independent views and the Board’s role in supervising the activities of management the Chairman is a non-executive director.
2(f) Company Secretary
The appointment, performance, review, and where appropriate, the removal of the Company Secretary is a key responsibility of the Board. All directors have access to the Company Secretary who is accountable directly to the Board, through the Chairman, on all matters to do with the proper functioning of the Board.
2(g) Avoidance of Conflicts of Interest by a Director
In order to ensure that any interests of a director in a particular matter to be considered by the Board are known by each director, each director is required by the Company to disclose any relationships, duties or interests held that may give rise to a potential conflict. Directors are required to adhere strictly to constraints on their participation and voting in relation to any matters in which they may have an interest and noted in the Minutes or each Directors meeting.
Directors are able to access members of the management team at any time to request relevant information. There are procedures in place, agreed by the board, to enable directors, in furtherance of their duties, to seek independent professional advice at the company’s expense.
2(h) Review of Board Performance
The performance of the board and each of its committees is reviewed at least annually by the Chairman. Performance evaluations are conducted annually which involve an assessment of each board member’s performance against specific and measurable qualitative and quantitative performance criteria. The performance criteria against which directors and executives are assessed is aligned with the financial and non-financial objectives of Greenpower. Directors whose performance is consistently unsatisfactory may be asked to retire.
The performance of each committee is against the requirements of their respective charters.
3. BOARD COMMITTEES
The Board has the ability under the Company’s constitution to delegate its powers and responsibilities to committees of the Board.
3(a) Audit and Risk Committee
The Board has not established an Audit and Risk Committee and as such the Group is not in compliance with Principle 4.1 of the ASX Corporate Governance Council. The Board considers that the Group is not of a size, nor are its financial affairs of such complexity to justify the formation of an audit and risk committee. The Board as a whole undertakes the selection and proper application of accounting policies, the identification and management of risk and the review of the operation of the internal control systems. The Board considers that the experience and qualifications of the Board will assure the integrity of the financial statements of the Group and the independence of the external auditor.
The Board ensures that the auditor is invited to attend all general meetings of shareholders.
The Board in lieu of an Audit and Risk Committee is responsible for:
- reviewing the quality and integrity of the Group’s financial reporting to shareholders, ASX and the Australian Securities and Investments Commission;
- reviewing the accounting policies, internal controls, practices and disclosures to assist the Board in making informed decisions, with direct access to management;
- reviewing the scope and outcome of external audits, with direct access to external auditors;
- nominating external auditors and reviewing the adequacy of existing external audit arrangements;
- ensuring the independence of external auditors and reviewing any other services provided by them;
- reviewing the Group’s risk management systems; and
- reporting to the Board on its meetings and the results of any assessments and reviews.
The Board has ratified an Audit Policy which states the services that may or may not normally be conducted by the Group’s external auditing firm under the following guiding principles.
External Auditor
The Company’s policy is to appoint external auditors who clearly demonstrate quality and independence. The performance of the external auditor is reviewed annually, taking into consideration assessment of performance, existing value and tender costs.
An analysis of fees paid to the external auditors, including a breakdown of fees for non-audit services, is provided in the notes to the financial statements. It is the policy of the external auditors to provide an annual declaration of their independence to the Board.
The external auditor is requested to attend the Annual General Meeting and be available to answer shareholder questions about the conduct of the audit and the preparation and content of the audit report.
Internal Audit
The Company does not currently have a formal internal audit function however the Board oversee the effectiveness of risk management and internal control.
The Board works closely with management to identify and manage operational, financial and compliance risks which could prevent the Company from achieving its objectives. The Board actively encourages the External Auditor to raise internal control issues, and oversees management’s timely remediation thereof.
3(b) Remuneration and Nomination Committee
Given the present size of the Group, the existing Board structure is able to meet the needs of the Group in the examination of selection and appointment practices without the establishment of a nomination committee of the Board as recommended under Principle 2.1 of the Corporate Governance Principles and Recommendations of the ASX Corporate Governance Council.
Remuneration
The remuneration received by directors and executives in the current period is contained in the “Remuneration Report” within the Directors’ Report of the Annual Report.
The Company seeks to attract and retain directors and executives with the appropriate expertise and ability to create value for shareholders.
The remuneration structure for non-executive directors is not related to performance. The Company aims to ensure non-executive directors receive fees which reflect their skills, responsibilities and the time commitments required to discharge their duties; currently the non-executive directors are unpaid and supporting the Company. The Company does not pay retirement benefits to non-executive directors (other than superannuation contributions in accordance with its statutory superannuation obligations).
The remuneration structure for executive directors and other executives reflects the Company’s financial resources and as such there is not currently a direct correlation between the executive’s reward and individual and Company performance so as to seek to ensure that the Company’s remuneration policy is aligned with its long term business objectives and the interests of shareholders and other stakeholders.
Nomination
A profile of each director is included within the Directors’ Report of the Annual Report under the heading “Directors”. The Company has a written agreement in place with each director setting out the terms of their appointment. The committee and the Board consider the composition of the Board at least annually, when assessing the Board’s performance and when considering director election and re-election.
In considering whether the Board will support the election or re-election of incumbent directors, the committee considers the skills, experience, expertise, diversity and contribution made to the Board by the director and the contribution that the director is likely to make if elected or re-elected.
When considering appointing new directors, the committee assesses the range of skills, experience, expertise, diversity and other attributes from which the Board would benefit and to the extent to which current directors possess such attributes. This assessment allows the committee to provide the Board with a recommendation concerning the attributes for a new director, such that they balance those of existing directors.
All material information that is relevant to the decision as to whether or not to elect or re-elect a director is provided to shareholders in the explanatory notes accompanying the notice of meeting for the Annual General Meeting at which the election or re-election is to be considered.
4. TIMELY AND BALANCED DISCLOSURE
4(a) Shareholder Communication
The Company believes that all shareholders should have equal and timely access to material information about the Company including its financial situation, performance, ownership and governance.
The Board aims to ensure that shareholders are informed of all material information relating to the Company by communicating to shareholders through:
- continuous disclosure reporting to the ASX;
- its annual reports; and
- media releases and other investor relations publications on the Company’s website.
- The Company provides other information about itself and its governance via its website.
Two-way Communication
The Board is also mindful of the importance of not only providing information, but also enabling two-way communication between the Company and its shareholders.
The Company encourages direct electronic contact from shareholders – the Company’s website has a “Contact Us” section which allows shareholders to submit questions or comments. The Company’s website also allows shareholders to register to receive information updates electronically from the Company.
The Company provides shareholder materials directly to shareholders through electronic means. A shareholder may request a hard copy of the Company’s annual report to be posted to them. Shareholders may also communicate via electronic means with the Company’s Share Registry and may register to access personal shareholding information and receive electronic information.
General Meetings
Shareholders are encouraged to participate in general meetings. Copies of addresses by the Chairman or CEO are disclosed to the market and posted on the Company’s website.
At the meeting the Chairman encourages questions and comments from shareholders and seeks to ensure that shareholders are given ample opportunity to participate.
The Company’s external auditor attends the Company’s annual general meeting to answer shareholder questions about the conduct of the audit, the preparation and content of the audit report, the accounting policies adopted by the Company and the independence of the auditor in relation to the conduct of the audit.
4(b) Continuous Disclosure Policy
The Company is committed to ensuring that shareholders and the market are provided with full and timely information and that all stakeholders have equal opportunities to receive externally available information issued by the Company.
The Company’s “ASX Disclosure Policy” encourages effective communication with its shareholders by requiring that Company announcements:
- be factual and subject to internal vetting and authorisation before issue;
- be made in a timely manner;
- not omit material information;
- be expressed in a clear and objective manner to allow investors to assess the impact of the information when making investment decisions;
- be in compliance with ASX Listing Rules continuous disclosure requirements; and
- be placed on the Company’s website promptly following release.
The Company’s “ASX Disclosure Policy” reinforces the Company’s commitment to continuous disclosure and outline management’s accountabilities and the processes to be followed for ensuring compliance.
The policy also contains guidelines on information that may be price sensitive. The Company Secretary has been nominated as the person responsible for communications with the ASX. This role includes responsibility for ensuring compliance with the continuous disclosure requirements with the ASX Listing Rules and overseeing and coordinating information disclosure to the ASX.
5. RECOGNISING AND MANAGING RISK
The Board is responsible for ensuring there are adequate policies in relation to risk management, compliance and internal control systems. The Company’s policies are designed to ensure strategic, operational, legal, reputation and financial risks are identified, assessed, effectively and efficiently managed and monitored to enable achievement of the Company’s business objectives. Considerable importance is placed on maintaining a strong control environment.
The Company has exposure to the following risks:
- Currency: The Company is exposed to fluctuations in the Australian dollar which can impact on expenditures related to project development and potentially future operations. Due to the size and assets of the Company the Board has not instigated a hedging program. The Board will continue to review the implementation of hedging at each Board meeting to ensure it fits within the Company’s hedging policy framework and is deemed appropriate.
- Environmental: The Company is subject to, and responsible for, existing environmental liabilities associated with its tenements as well as potential new liabilities through future mining activities. The Company will continually monitor its ongoing environmental obligations and risks, and implement rehabilitation and corrective actions as appropriate to remain compliant. These risks may be impacted by change in Government policy.
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Market Risk: The Company seeks to reduce investment risk by regularly monitoring the market and considering at each Board meeting the ongoing benefits of carrying the investments or disposal.
5(a) Board Oversight of the Risk Management System
The Board is responsible for approving and overseeing the risk management system. The Board reviews, at least annually, the effectiveness of the implementation of the risk management controls and procedures.
The principle aim of the system of internal control is the management of business risks, with a view to enhancing the value of shareholders’ investments and safeguarding assets. Although no system of internal control can provide absolute assurance that the business risks will be fully mitigated, the internal control systems have been designed to meet the Company’s specific needs and the risks to which it is exposed.
Annually, the Board is responsible for identifying the risks facing the Company, assessing the risks and ensuring that there are controls for these risks, which are to be designed to ensure that any identified risk is reduced to an acceptable level.
Internal control measures currently adopted by the Board include:
- monthly reporting to the Board in respect of operations and the Company’s financial position; and
- regular reports to the Board by appropriate members of the management team outlining the nature of particular risks and highlighting measures which are either in place or can be adopted to manage or mitigate those risks.
5(b) Risk Management Roles and Responsibilities
The Board is responsible for approving and reviewing the Company’s risk management strategy and policy. Senior management is responsible for implementing the Board approved risk management strategy and developing policies, controls, processes and procedures to identify and manage risks in all of the Company’s activities.
The Board and Audit and Risk Committee are responsible for ensuring that management has developed and implemented a sound system of risk management and internal control.
5(c) Chief Executive Officer and Chief Financial Officer Certification
The Chief Executive Officer and Chief Financial Officer provide to the Board written certification that in all material respects:
- the Company’s financial statements present a true and fair view of the Company’s financial condition and operational results and are in accordance with relevant accounting standards;
- the statement given to the Board on the integrity of the Company’s financial statements is founded on a sound system of risk management and internal compliance and controls which implements the policies adopted by the Board; and
- the Company’s risk management and internal compliance and control system is operating efficiently and effectively in all material respects.
6. ETHICAL AND RESPONSIBLE DECISION MAKING
6(a) Code of Ethics and Conduct
Code of Ethics and Conduct
The Board endeavours to ensure that the directors, officers and employees of the Company act with integrity and observe the highest standards of behaviour and business ethics in relation to their corporate activities. The “Code of Conduct” sets out the principles, practices, and standards of personal behaviour the Company expects people to adopt in their daily business activities.
All directors, officers and employees are required to comply with the Code of Conduct. Senior managers are expected to ensure that employees, contractors, consultants, agents and partners under their supervision are aware of the Company’s expectations as set out in the Code of Conduct.
All directors, officers and employees are expected to:
- comply with the law;
- act in the best interests of the Company;
- be responsible and accountable for their actions; and
- observe the ethical principles of fairness, honesty and truthfulness, including prompt disclosure of potential conflicts.
6(b) Policy Concerning Trading in Company Securities
The Company’s “Securities Trading Policy” applies to all directors, officers and employees. This policy sets out the restrictions on dealing in securities by people who work for, or are associated with the Company and is intended to assist in maintaining market confidence in the integrity of dealings in the Company’s securities. The policy stipulates that the only appropriate time for a director, officer, consultant or employee to deal in the Company’s securities is when they are not in possession of price sensitive information that is not generally available to the market.
As a matter of practice, Company shares may only be dealt with by directors and officers of the Company under the following guidelines:
- no trading is permitted in the period of one month prior to the announcement to the ASX of the Company’s quarterly, half year and full year results;
- guidelines are to be considered complementary to and not replace the various sections of the Corporations Act 2001 dealing with insider trading; and
- prior approval of the Chairman, or in his absence, the approval of two directors is required prior to any trading being undertaken.
- Senior management are prohibited from entering into transactions which limit the risk of participating in unvested entitlements under any equity-based remuneration scheme.
6(c) Policy Concerning Diversity
The Company encourages diversity in employment throughout the Company and in the composition of the Board, as a mechanism to ensure that the Company is able to draw on a variety of skill, talent and previous experiences in order to maximise the Company’s performance.
The Company’s “Diversity Policy” has been implemented to ensure the Company has the benefit of a diverse range of employees with different skills, experience, age, gender, race and cultural backgrounds. The Company reports its results on an annual basis in the Annual Report in achieving measurable targets which are set by the Board as part of implementation of the Diversity Policy.
The table below outlines the diversity objectives established by the Board, the steps taken during the year to achieve these objectives, and the outcomes.
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