Corporate Governance

Corporate Governance Philosophy, Statement and Principles


1. Corporate Governance Philosophy

Effective corporate governance results from the efficient interaction between a company's board of directors and its senior (executive) managers. A company's board of directors oversees and directs the company and its business, while senior managers execute board policy and decisions and manage day-to-day business operations. The board and senior management share responsibility for protecting and enhancing shareholder value in the long term. Corporate governance, therefore, is the system whereby companies are directed and managed. A company's approach to corporate governance influences how the objectives of the company are set and achieved, how risk is monitored and assessed and how performance is optimised.

A dedicated, knowledgeable, and rigorous board of directors is the heart of effective corporate governance. The board oversees the management of the company, represents shareholder interests and when necessary, balances their interests against those of other key stakeholders. The board ensures that the important risks that could prevent the company's achievement of its objectives are identified and that processes are in place to address those risks. Furthermore, when the company decides to take calculated risks to seize opportunities and maximise value, the board determines the acceptable risk-return ratio.

An effective corporate governance process is established when an open and transparent relationship exists between (and among) the board of directors, the shareholders and the executive management of the company. When each is engaged with and responsive to the others, a strong foundation for good corporate governance can be set.

However, the substance of good corporate governance is more important than its form and it should be recognised that that good corporate governance is based on principles that are underpinned by ongoing and reaffirming consensus and continually evolving notions of good practice. Consequently, there are no absolute rules which must be adopted. "There is no simple universal formula for good governance"

An organisation needs to continually monitor, evaluate, develop and refine, where required, its corporate governance regimes, in order to meet changing environments and requirements. The adoption of a set of principles, or any particular practice or policy, is not a substitute for and will not of itself ensure good corporate governance.

Corporate governance is not just about committee structures. It implies and requires a comprehensive and consistent corporate commitment to integrity, which is embedded into the fabric of the organisation and the way people conduct business. It is evidenced by the organisation's leadership, culture, core values and business ethics.

Good corporate governance structures encourage companies to create value, through an entrepreneurial spirit, innovation, development and exploration and provide accountability and control systems commensurate with the risks involved.

2. Corporate Governance Statement

The group's board of directors recognises and acknowledges that an effective corporate governance framework, combined with sound business practices that are embedded into the fabric of the organisation is fundamental to the effective management of risk, the achievement of objectives and the protection and enhancement of shareholder value.

Accordingly, the group's board commits to:

  • The establishment of clear roles and responsibilities for the group's board and management structures and of management and employees;
  • Incorporating a balance of skills, experience and independence that is appropriate to our business;
  • Oversight, control, risk management, compliance and reporting that safeguards and presents the group's financial and non-financial positions in a timely, accurate and balanced manner, all of which is supported by an effective and efficient system of governance; and
  • Recognising fairly, the needs of our shareholders to return, our employees to reward and the legitimate interests of all our other stakeholders.

3. Corporate Governance Principles

The following corporate governance principles support the group's statement of corporate governance, whereby:

  • Fundamental to any corporate governance structure, is the establishment of clear roles for the board and executive management (Principle 1).
  • Boards require a balance of skills, experience and independence, appropriate to the nature and extent of its company's operations (Principle 2).
  • The basic need for integrity is inculcated in those who can influence strategy and financial performance, together with the need for responsible and ethical decision-making (Principle 3).
  • When meeting the information needs of our investment community, paramount in terms of accountability and attracting capital, the integrity of company reporting, both in terms of financial and non-financial positions, is ensured by processes that provide appropriate safeguards, both internally and externally (Principle 4).
  • Group reporting that provides a timely and balanced picture of all material matters (Principle 5).
  • The rights of our group's shareholders are clearly recognised and upheld (Principle 6).
  • A system of effective oversight and internal control frames every business decision thus managing uncertainty and risk (Principle 7).
  • Managing business risk and other aspects of governance requires formal mechanisms that encourage enhanced board and management effectiveness (Principle 8).
  • Appropriate rewards are required to attract the skills necessary to achieve the performance expected by shareholders (Principle 9).
  • As the impact of group actions and decisions becomes increasingly diverse, good governance procedures protect the legitimate interests of all stakeholders (Principle 10).

These ten principles are embedded into the group's governance and expanded as follows:

  • 1. Lay solid foundations for management and oversight
    Recognise and publish the respective roles and responsibilities of the board and management.
  • 2. Structure the board to add value
    Have a board of an effective composition, size and commitment to adequately discharge its responsibilities and duties.
  • 3. Promote ethical and responsible decision-making
    Actively promote ethical and responsible decision-making.
  • 4. Safeguard integrity in financial reporting
    Have a structure to independently verify and safeguard the integrity of the group's financial reporting.
  • 5. Make timely and balanced disclosure
    Promote timely and balanced disclosure of all material matters concerning the group.
  • 6. Respect the rights of shareholders
    Respect the rights of shareholders and facilitate the effective exercise of those rights.
  • 7. Recognise and manage risk
    Establish a sound system of risk oversight and management and internal control.
  • 8. Encourage enhanced performance
    Fairly review and actively encourage enhanced board and management effectiveness.
  • 9. Remunerate fairly and responsibly
    Ensure that the level and composition of remuneration is sufficient and reasonable and that its relationship to corporate and individual performance is defined.
  • 10. Recognise the legitimate interests of stakeholders
    Recognise legal and other obligations to all legitimate stakeholders.