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 following is an extract from the 2007 Annual Report on Corporate 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
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
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 following month’s Board meeting. The current Committees are:
Remuneration Committee
Members
Barbara Gibson (Chairman), Doug Bailey, Eduard Eshuys, Phil Lockyer, 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), 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), Eduard Eshuys, 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
St Barbara’s Board currently comprises five Directors - the Managing Director and four Non-Executive Directors. The nomination of all new Directors including the Managing Director are considered by the full Board. 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.
The Company’s Constitution requires one-third of the Directors (or the next lowest 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 as well as those Directors appointed to the Board since the last AGM. 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.
The Managing Director is not subject to retirement by rotation and is not to be taken into account in determining the number of Directors required to retire by rotation.
Independence
Directors, including the Chairman, should be independent and free of any relationship that may conflict with the interests of the Company. Each of the Non-Executive Directors are independent. The Board defines ‘independence’ in accordance with the ASX Recommendations. In order to ensure that any interest of a Director in a matter to be considered by the Board is known, 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 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
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
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 the Company’s stakeholders. The relevant policies are on the website.
St Barbara discloses to the Australian Stock Exchange (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 Managing Director and Chief Financial Officer have each declared in writing to the Board that the financial records of the Company for the financial year have been properly maintained and present a true and fair view of the Company’s financial condition and operating results, in accordance with the Corporations Act and the relevant accounting standards.
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. Other relevant information, including Company presentations and updates by senior management, are also disclosed to the ASX and through the Company’s website.
Principle 6
Respect the rights of shareholders
The Board, in adopting a Continuous Disclosure Policy, ensures that shareholders are provided with up-to-date Company information. Communication to shareholders is facilitated by the publication of the Annual Report, Quarterly Reports, other announcements and the posting of ASX releases on St Barbara’s website immediately after their disclosure on the ASX. In addition, all shareholders are encouraged to attend the Annual General Meeting of Shareholders and use the opportunity to ask questions. The external auditor attends the meeting and is available to answer questions on the Financial Report.
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 Company is developing its risk and opportunity management strategies, including comprehensive reporting and control mechanisms, which are designed to ensure that strategic, operational, legal, reputational and financial risks and opportunities are identified, assessed and managed. The reporting and control mechanisms support the annual written certifications given by the Managing Director and the Chief Financial Officer to the Board that the Company’s financial reports are based on a sound system of risk management and internal control.
Principle 8
Encouraging enhanced performance
St Barbara has in place a performance appraisal system for the Managing Director and senior managers, designed to enhance performance. This is also linked to remuneration. Further details in relation to Executive performance are set out in the Annual Report.
Principle 9
Remunerate fairly and responsibly
Board remuneration
The total annual remuneration paid to Non-Executive Directors may not exceed the limit set by the shareholders at the Annual General Meeting (currently A$750,000). The remuneration of the Non-Executive Directors is fixed rather than variable.
Executive remuneration
The Remuneration Committee provides recommendations and direction for the Company’s remuneration practices. The Committee ensures that a significant proportion of each senior manager’s remuneration is linked to his or her performance and the Company’s performance. Performance reviews are conducted at least annually to determine the proportion of remuneration that will be ‘at risk’ for the upcoming year. St Barbara executives may participate in employee incentive schemes that are linked to St Barbara’s performance. Further details in relation to Director and Executive remuneration are set out in the Annual Report.
Principle 10
Recognise legitimate interests of stakeholders
St Barbara has a number of formal policies that address the interests of all stakeholders in relation to issues of ethical behaviour, environment and health and safety. St Barbara has adopted policies such as the Occupational Health and Safety Policy, an Equal Opportunity Policy and Environment Policy to ensure all stakeholder interests are recognised.
