Governance
Corporate Governance is the process by which companies are directed and managed. St Barbara strives to create sustainable value for shareholders by implementing an effective programme of governance.
The Board and Management regularly review the Company’s policies and practices to ensure that St Barbara continues to maintain and improve its governance standards consistent with the ASX Corporate Governance Council Principles of Good Corporate Governance and Best Practice Recommendations (ASX Recommendations). Relevant principles are described below.
Principle 1
Lay solid foundations for management and oversight
The role of the Board is to represent shareholders, provide strategic guidance to, and effective oversight of, management, foster a culture of good governance, and promote a safe and healthy working environment within the Company.
In performing its role, the Board at all times will endeavour to act:
- in a manner designed to create and continue to build sustainable value for shareholders;
- in recognition of its overriding responsibility to act honestly, fairly and in accordance with the law in serving the interests of the Company, its shareholders, employees, and as appropriate, other stakeholders:
- in accordance with the duties and obligations imposed upon Directors by the Company's Constitution and applicable law; and
- with integrity and objectivity, consistent with ‘best practice’ ethical, professional and related standards.
The specific responsibilities of the Board are described in the Board Charter.
Principle 2
Structure the Board to add value
The Board has established a number of Board Committees to facilitate the execution of its responsibilities. The Committees provide a forum for a more detailed analysis of key issues and interaction with management. Each Committee reports its deliberations to the next following Board meeting. The current Committees are:
Remuneration Committee
Members
Barbara Gibson (Chairman), Doug Bailey, Robert Rae, Colin Wise
Function
The Committee assists and advises the Board in relation to the remuneration of the Managing Director / CEO, his senior executive direct reports, employees of the Company, consultants/ contractors who are engaged to perform management or executive responsibilities, and Non-Executive Directors.
Audit Committee
Members
Douglas Bailey (Chairman), Phil Lockyer, Robert Rae, Colin Wise
Function
The Committee assists and advises the Board in discharging its responsibilities in relation to financial reporting, financial risk management, evaluating the effectiveness of the financial control environment and oversight of the external audit function. Matters relating to the assessment and supervision of non-financial business risks and compliance are covered.
Health and Safety Committee
Members
Phil Lockyer (Chairman), Barbara Gibson, Colin Wise
Function
The Committee assists and advises the Board in relation to safety and health issues, including in particular:
- in conjunction with Management, the promotion of a safety conscious culture throughout the Company;
- overseeing the function and effectiveness of the Health and Safety Management Committee; and
- recommending to the Board outcomes on Health and Safety policy, plans, compliance and issues.
Details of the number of meetings of the Board and each Committee during the year, and each Director’s attendance at those meetings, are set out the Annual Report.
Composition and Nomination to Board
St Barbara’s Board currently comprises six Directors – the Managing Director and five Non-executive Directors.
St Barbara does not have a nomination committee. Having regard to the importance of Board appointments and the size of the Company the Board retains this responsibility. The nomination of all new Directors including the Managing Director is considered by the full Board. Although there is no specific process of director selection detailed in the Board Charter, on deciding to appoint a director to the Board, the Board evaluates its skill needs and engages a well respected search firm to assist and advise the Board on identifying and selecting candidates. The assessment process includes interviews by the majority of Board members. The Board assesses the nominees against a range of specific criteria, including their experience, professional skills, potential conflicts of interest, the requirement for independence and the existing collective skill sets of the Board.
Independence
It is Board policy that a majority of Non-executive Directors including the Chairman should be independent and free of any relationship that may conflict with the interests of the Company. The Board defines “independence” in accordance with the ASX Recommendations. Each of the current Non-executive Directors is independent. The Chairman is an independent Non-executive Director.. In order to ensure that any “interests” of a Director in a matter to be considered by the Board are known by each Director, each Director has contracted with 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 have or may have a conflict of interest.
Director participation
Directors visit St Barbara’s mining operations at least once per annum and meet with management on a regular basis to gain a better understanding of the Company’s business.
Independent professional advice and access to Company information
As specified in the Board Charter and letter of appointment, Directors have right of access to all relevant Company information and to the Company’s executives and, subject to prior consultation with the Chairman, may seek independent advice from a suitably qualified adviser at St Barbara’s expense.
Principle 3
Promote ethical and responsible decision making
The Board and the Company’s employees are expected to uphold the highest levels of integrity and professional behaviour in their relationships with all of the Company’s stakeholders. The Company does not have a specific Code of Conduct as the Company has instead a range of specific codes and policies governing Board and employee behaviour. The Company specifically has procedures that cover trading in St Barbara’s securities and conflicts of interest for Directors. A register of Director interests is maintained.
Employees are accountable for their conduct under a range of Company policies and procedures, including an Occupational Health and Safety Policy, an Equal Opportunity Policy and Environment Policy, a policy on the Use of Computer Facilities and others. The Company does not have a general written code of ethics or behaviour but employees are made aware of acceptable behaviour through on-going training and development and contact with senior management. The Company Secretary is responsible for investigating any reports of unethical practices and reporting outcomes to the Managing Director and CEO or the Board, as appropriate.
Trading in St Barbara shares
To safeguard against insider trading, St Barbara’s Dealing in Securities Policy prohibits Directors and employees from trading St Barbara securities if they are aware of any information not in the public domain that would be expected to have a material effect on the price of Company securities.
Dealing in Company shares by Directors, Officers and Employees is governed by a “Dealings in Securities” Policy. This policy allows for a 30-day trading window commencing from the business day following significant public announcements, provided the Company is not then in possession of undisclosed potentially price sensitive information.
St Barbara discloses to the ASX any transaction conducted by the Directors in St Barbara securities in accordance with ASX Listing Rules.
Principle 4
Safeguard integrity in financial reporting
The Board has established an Audit Committee and its Charter, is available on the Company’s website. The Charter was updated during the year and complies with recommendations of the ASX. During the year, the Audit Committee Charter was expanded to include oversight of the processes for determination of Ore Reserves.
The Audit Charter covers the principles governing the relationship with the external auditors, although not the specifics governing selection of auditors and rotation of audit partners. The Company changed audit firms with the approval of shareholders during the 2007 financial year. The Committee considers that KPMG’s process of partner rotation is sufficient to maintain independence of external auditors.
Principle 5
Make timely and balanced disclosure
St Barbara seeks to provide relevant up-to-date information to its shareholders and the broader investment community in accordance with the continuous disclosure requirements under the ASX Listing Rules.
The Board has implemented a Continuous Disclosure Policy to ensure that information considered material by the Company is immediately lodged with the ASX as soon as practicable. Other relevant information, including Company presentations, updates by senior management and commentary on financial results, are also disclosed to the ASX and through the Company website.
Principle 6
Respect the rights of shareholders
Communication to shareholders is facilitated by the production of the Annual Report, Quarterly Reports, public announcements and the posting of ASX releases on St Barbara’s website immediately after their disclosure on the ASX. There is no specific communications policy, as considering the size of the shareholder base, the current announcement procedures and distribution methods, the Company believes shareholders have the opportunity to be fully informed of Company activities. St Barbara appointed a General Manager Investor Relations during the year who is continuing to facilitate the Company’s communication with shareholders.
In addition, all shareholders are encouraged to attend the Annual General Meeting of Shareholders and use the opportunity to ask questions. Questions can be lodged prior to the meeting by completing the relevant form accompanying the notice of meeting. The Company makes every endeavour to respond to these questions. The external auditor attends the meeting and is available to answer questions.
Principle 7
Recognise and manage risk
The Board believes that risk management and compliance are fundamental to sound management, and that oversight of such matters is an important responsibility of the Board.
The financial reporting and control mechanisms are assessed during the year by management, the Audit Committee and the external auditors. The Board has received assurances from the Managing Director and the Chief Financial Officer to the Board that the declaration provided in accordance with section 295A of the Corporations Act 2001 (Cth) in relation to the Company’s financial statements is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks.
The Company also has policies in place dealing with risks in the areas of Health and Safety, Environment and Employee Relations. Management has regularly informed the Board about risks within the business and the effectiveness of the Company’s management of those risks during the 2008 financial year.
The Company is commencing an enterprise wide risk and opportunity assessment during the 2009 financial year and has engaged an expert firm to assist. The two year project is expected to deliver enhanced risk and opportunity reporting and control mechanisms, which are designed to ensure that strategic, operational, legal, reputational and financial risks and opportunities are identified, assessed and managed. All material business risks will be evaluated as part of the Enterprise Wide Risk and Opportunity Assessment program.
Principle 8
Remunerate fairly and responsibly
Board remuneration
The remuneration of the Non-executive Directors is fixed rather than variable. There are no retirement benefits paid to Non-executive Directors.
Executive remuneration
The Remuneration Committee provides recommendations and direction for the Company’s remuneration policies. The Committee ensures that a significant proportion of each executive’s remuneration is linked to his or her performance and the Company’s performance. This remuneration has both short and long term components. Incentives are aligned to achievement of specific targets and goals and may also be linked to St Barbara’s longer term performance. The Company has recently implemented a policy prohibiting executives from entering into transactions which hedge or protect the unvested portion of any equity-based entitlements.
