This outlines the main Corporate Governance practices of NSW Business Chamber Limited (the ‘company’) and its consolidated entities.
NSW Business Chamber Limited
Corporate Governance Statement
30 June 2018
This statement outlines the main Corporate Governance practices of NSW Business Chamber Limited (the ‘company’) and its consolidated entities. These practices are dealt with under the following major headings: Board of directors and its committees, Risk management and internal control framework, Ethical standards and Environment and sustainability.
Board of Directors and its Committees
Role of the Board
The Board of Directors (the ‘Board’) has overall responsibility for the corporate governance of the company including strategic direction, the establishment of objectives for management and monitoring the achievement of those objectives, the review of Chief Executive Officer and senior management performance, establishing a framework for the management of major business risk and ensuring that policies and procedures are in place to satisfy the company’s legal and ethical responsibilities.
The directors meet as a Board on a regular basis throughout the year. The directors also participate in additional corporate governance and strategy meetings. The number of meetings of the Board and of each Board committee held during a financial year, and the number of meetings attended by each director are disclosed in the Annual Reports of the NSW Business Chamber Limited, under the heading ‘Meetings of directors’.
The following committees are currently in place:-
- Audit, Risk & Compliance Committee;
- Investment Committee;
- Human Resources & Succession Committee.
These committees operate under the Charters approved by the Board.
Details, including functions and membership, of the Board committees are set out below.
All committee chairs report to the Board subsequent to each committee meeting.
The Chief Executive Officer, in consultation with the President, prepares the agenda for each Board meeting and papers are circulated in advance of each meeting.
The Board undertakes a review of its own performance and processes on a regular basis. Periodically, directors provide feedback to the president.
Composition of the Board
In accordance with the constitution, the Board shall consist of not less than eight and not more than ten persons.
Currently there are ten directors on the Board all of whom, including the President, are independent non-executive directors.
Details of the members of the Board, their qualifications, experience and expertise are set out in the Directors’ Report, under the heading ‘Information on directors’, in the Annual Report of NSW Business Chamber.
The following matters are relevant when considering the composition of the Board:-
Audit, Risk & Compliance Committee
- Board members are elected by the NSW Business Chamber for periods of four years;
- The Council elects the President, Vice President and one half of the directors every two years;
- The company’s constitution prescribes that all directors shall be member elected councillors.
The committee is responsible for monitoring the management of operational, financial and business risks in the company and its related entities (the “Group”). It ensures the reliability of management and financial reports and compliance with the relevant legislation and regulations. It is also responsible for reviewing the efficiency and effectiveness of the external audit and internal controls as well as the ethical standards for the management of the Group
All members of the committee are independent non-executive directors. Management, including the chief executive officer, director, finance and strategy, and the relevant PricewaterhouseCoopers (‘PwC’) partner, attend by invitation.
Other responsibilities of the committee include:-
- ensuring the quality and accuracy of the financial report and other externally-distributed financial information;
- reviewing significant accounting issues and judgments;
- ensuring the maintenance of an appropriate internal control framework and where any deficiencies are identified, ensuring prompt remedial action is taken by management;
- reviewing accounting policies to ensure compliance with all relevant Australian Accounting Standards and generally accepted accounting principles;
- reviewing the annual external audit work plans;
- reviewing the performance of the external auditor and recommending appointment as appropriate;
- considering whether the non-audit services provided by the external audit firm are consistent with maintaining the external auditor’s independence;
- ensuring any matters outstanding with the external auditor or regulatory authorities are appropriately addressed;
- reviewing the risk management procedures of the company;
- receiving information from the Investment Committee and Human Resources & Succession Committee on areas of risk being considered by that Committee; and
- reviewing its performance as an Audit, Risk & Compliance Committee.
The Board has adopted a policy addressing the issue of audit independence and the undertaking of non-audit services by the company’s external auditors, PwC, to ensure that at all times the external audit firm is independent of the company and its management and directors. The policy identifies services which are considered to be in conflict with the role of the external auditor and as such should not be provided by the external audit firm. The external auditor is required to make an annual declaration of independence to the Board and submit a written statement to the committee outlining the relationships with the company.
The external audit partner is required to rotate after a maximum of ten years.
The Audit, Risk & Compliance Committee currently comprise of the following independent directors:-
- B A Manwaring (Chair)
- N Watson
- T H Cairney
- W McLean
- I B Penfold
The external auditor meets separately on an annual basis with the committee, without management present, to ensure full and frank discussion of audit issues. The external auditor is requested to attend the Annual General Meeting and be available to answer member questions about the conduct of the audit and the preparation and content of the audit report.
The committee is responsible for the management of the company’s substantial investment portfolio, including reviewing the Investment Policy and Distribution Policy to ensure investment outcomes consistent with the strategic outcomes of the Group by delivering a consistent and secure annual return and distribution in accordance with the Investment Policy and Distribution Policy.
The Investment Committee currently comprise of the following independent directors:-
Human Resources & Succession Committee
- G J McNamara (Chair)
- T C Wetherall
- N Watson
- L N Gorman
- B A Manwaring
The committee is responsible for the development, implementation and monitoring of the Group’s employment, remuneration and Workplace Health and Safety strategies and policies consistent with best practice and business requirements .
The Human Resources & Succession Committee currently comprise of the following independent directors:-
Directors’ remuneration is reviewed by the Human Resources & Succession Committee and determined by the Board, in accordance with the company’s constitution. The maximum aggregate annual amount permitted to be paid to all councillors and directors is $1,200,000.
- L N Gorman (Chair)
- N Watson
- E T Brown
- J Field
- G J McNamara
The fees for the President, committee chairs, regional presidents and the other non-executive directors are determined by having particular regard to appropriate benchmarking data.
Conflict of interest
Directors are required to keep the Board advised, on an ongoing basis, of any interests that could potentially conflict with those of the company. The Board has adopted procedures covering disclosure of interests by directors which establish how actual or potential conflicts of interest are to be addressed. In any instance where the Board believes that a conflict exists, the director concerned would not receive the relevant Board papers and would not participate in that part of the meeting where the item is considered.
Independent professional advice and access to company information
Each director has the right of access to all relevant company information and, subject to prior consultation with the President, is entitled to seek independent professional advice in relation to matters pertaining to the performance of their role, at the company’s cost.
Risk management and internal control framework
The Board acknowledges that it is responsible for the overall internal control and risk management framework of the company. To assist in discharging this responsibility, the Board has put in place a control framework that can be described as follows:
A comprehensive budget is prepared annually by management and approved by the Board. Management reports results monthly against that budget and revised forecasts are prepared regularly. The company reports regularly to the NSW Business Chamber Council.
The company has clearly defined guidelines covering capital expenditure. These include annual budgets, detailed appraisal and review procedures, and authority levels and structured due diligence procedures prior to business acquisitions or divestments and post audits of significant capital expenditure items.
Business risk management, compliance and control
Management of risk is an essential component of the company’s strategy. This involves management of operational, financial and business risk.
The company’s approach to investment risk overseen by the Investment Committee is as set out earlier in this Corporate Governance Statement and the exposure to risk is stated in the notes to the financial statements.
Comprehensive practices are in place to ensure:
- workplace health, safety and environment, quality standards and management information systems deliver high standards of performance and compliance with regulations;
- business transactions are properly authorised and executed;
- appropriate internal compliance and control procedures are operating effectively;
- appropriate retention and succession planning;
- trade practices and fair trading regulation compliance; and
- property loss control measures at business sites are effective.
The directors acknowledge the imperative of maintaining the highest standards of ethical conduct and legal compliance by all directors and employees of the company. The company has in place a Code of Conduct and a number of codes and policies in areas such as discrimination, harassment, ‘whistle blower’, related party and disclosure of interests.
Environment and sustainability
NSW Business Chamber Limited is committed to the protection of the environment, to the health and safety of its employees, members, customers and the public at large, and compliance with all applicable environmental laws, rules and regulations in the jurisdictions in which it conducts its business.
Management is committed to reducing the company’s carbon footprint and has achieved bronze recognition in the Sustainability Advantage program with silver the target for calendar year 2017.