In accordance with the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations with 2010 Amendments ("ASX Corporate Governance Principles and Recommendations"), Blackthorn Resources has made it a priority to ensure that the corporate governance practices and principles adopted by the Company reflect a high standard of corporate governance. This Corporate Governance Statement summarises the main corporate governance practices that have been adopted by the Blackthorn Resources' Board.
1. Board of Directors
Role of the Board
The Board of Directors is responsible for the protection and enhancement of long-term shareholder value of the Company. This includes overall responsibility for the corporate governance policies and practices adopted by the Company. The role of the Board is to provide overall strategic direction for the Company and to guide and monitor the business and affairs of the Company on behalf of the shareholders by whom they are elected and to whom they are accountable.
As the Board acts on behalf of shareholders, it seeks to identify the expectations of shareholders, as well as other ethical expectations and obligations. In addition, the Board is responsible for identifying areas of significant business risk and ensuing arrangements are in place to adequately manage those risks.
The primary responsibilities of the Board include:
Formulating and approving the strategic direction, objectives and goals of the Company;
Reviewing and approving strategic plans, capital investments and corporate objectives consistent with corporate strategy;
Providing financial and operational oversight, including monitoring the performance of the Company, the Board and management, and approval of the Company’s financial statements;
Ensuring that adequate internal control systems and procedures exist and that compliance with these systems and procedures is maintained;
Identifying significant business risks and ensuring that such risks are adequately managed;
Taking responsibility for corporate governance;
Identifying and appointing new directors and senior executives, and implementing relevant succession plans;
Reviewing the performance and remuneration of executives and directors; and
Reporting to shareholders and monitoring compliance with the Company's Disclosure Policy.
Directors are required at all times to act in accordance with legal and statutory requirements, and to properly discharge all their duties as directors. In doing so directors must:
Discharge their duties in good faith, for a proper purpose and in the Company's best interests;
Act with care and diligence and with a level of skill expected of a director of a public listed company;
Avoid conflicts of interest, except as permitted by law and with proper disclosure where a conflict arises;
Not take improper advantage of their position as a director;
Undertake appropriate and necessary enquiry in respect of the Company's business and its delegates; and
Provide all necessary information required by Corporations Law, including relevant ASX disclosures.
The Board has delegated responsibility for the day-to-day operation and administration of the Company to the Chief Executive Officer, supported by executive management. These delegated responsibilities are defined by formal delegated authorities. The Board ensures that executive management is suitably qualified and experienced to discharge their responsibilities, and assesses on an on-going basis the performance of each member of the executive team, to ensure that management’s objectives and activities are aligned with the expectations and risks identified by the Board.
The directors of the Company are as follows:
Ms Nicki Bowman - Independent Non-executive Director
Mr Derek Carter - Independent Non-executive Director
Mr Roger Higgins - Independent Non-executive Director
Mr Peter Kalkandis - Non-executive Director
Mr Mike Oppenheimer - Independent Non-executive Chairman
Mr Mark Mitchell - Managing Director
The Board seeks to appoint directors to the Board with an appropriate mix of skills, personal qualities, expertise and diversity, which will complement the business. Directors are encouraged to undertake relevant education in the duties and responsibilities of directors.
The number of directors able to be appointed is specified in the Company's Constitution as a minimum of three and a maximum of twelve. Retirement and rotation of directors is governed by the Corporations Act 2001 and the Company's Constitution. Each year one third of the directors must retire. The directors who retire at each annual general meeting are those with the longest length of time in office since their last appointment or last election. A director must retire at the conclusion of the third annual general meeting after the director was last elected. A retiring director remains in office until the end of the meeting and is eligible for re-election. A director appointed to fill a casual vacancy on the Board shall hold office until the next annual general meeting of the Company and is eligible for re-election.
In-line with ASX guidelines, the Board considers a director to be independent if the director complies with the following criteria:
Should not have any business dealings which could materially affect their independent judgement;
Has not been in an executive or advisory capacity to the Company in the last three years;
Does not have a material contractual relationship with the Company other than as a director;
Is not a material customer of or supplier to the Company; and
Is not a substantial shareholder or associated with a substantial shareholder in the Company.
The Board considers that Ms Bowman, Mr Carter, Mr Higgins and Mr Oppenheimer are independent directors. Mr Mitchell who is an executive director of the Company and Mr Kalkandis who represents Glencore PLC a substantial shareholder of the Company are not deemed independent under the ASX Corporate Governance Principles and Recommendations by virtue of their positions. The Board has a majority of independent directors as recommended under the ASX Corporate Governance Principles and Recommendations.
Conflict of Interest
The directors are required to keep the Company informed, on an ongoing basis, of any interest that could potentially conflict with those of the Company. Where the Board believes a significant conflict exists, the director concerned does not receive the relevant board papers and is not present at the meeting whilst the item is considered.
Independent Professional Advice
Directors have the right, in connection with their duties and responsibilities as directors, to seek independent professional advice at the Company's expense. Prior approval of the Chairman is required, which will not be unreasonably withheld.
The full Board currently holds a minimum of seven scheduled meetings each year. Additional meetings are convened at such times as are necessary to address specific significant matters that may arise. As specified in the Company's Constitution, meetings of directors may be held by communicating with each other using any technological means agreed to by directors - directors need not all be physically present in the same place.
A quorum for meetings of directors is two directors, at least one who must be a non-executive director.
The Board is committed to implementing a formal evaluation process of its performance and effectiveness, and that of its committees and individual directors. An independent review of the Board's performance was completed in August 2012.
Download the Board Charter
2. Board Committees
The Board has established two committees to consider specific issues and report back to the full Board. These are the Audit and Risk Committee and the Remuneration Committee. Other committees can be convened by the Board as required.
The Board does not have a Nomination Committee. The Board is of the opinion that due to the nature and size of the Company, the functions performed by a Nomination Committee can be adequately handled by the full Board.
Audit and Risk Committee
The Board has established an Audit and Risk Committee which operates under a charter approved by the Board. It is the Audit and Risk Committee’s primary responsibility to assist the Board of Directors:
In discharging its responsibilities in respect of the financial affairs of the Company; and
To ensure there is a sound framework of risk oversight, risk management and internal control in place and operating across the Company.
The Audit and Risk Committee is responsible for:
Reviewing the quality and integrity of the Company’s financial reporting to shareholders, the ASX, the Australian Securities and Investment Commission and any other applicable regulatory body;
Reviewing the accounting policies, internal controls, internal reporting practices and disclosures to assist the Board in making informed decisions and to ensure that the Company complies with all relevant statutory and regulatory requirements;
Reviewing with management and the external auditor, management’s choice of accounting principles and material judgements, including assessing whether such choices are aggressive or conservative and whether they are normal or minority practices;
Reviewing the scope and outcome of external audits;
Nominating external auditors and reviewing the annual fees and other compensation to be paid, together with the adequacy and performance of existing external audit arrangements;
Ensuring the independence of external auditors, including the scope of any other services provided by them;
Reviewing and assessing the adequacy of the Company’s risk management systems, including without limitation an annual review of the Company’s Risk Management Policy;
Approving and reviewing the Company’s delegation of authorities and compliance with them;
Reviewing the Audit and Risk Committee Charter to ensure that it remains relevant and is consistent with the Committee’s objectives and responsibilities;
Reporting to the Board on its meetings and the results of any of its assessments, reviews and recommendations; and
Ensuring that the Corporate Governance Statement in the Company’s annual report is in accordance with the requirements of the ASX Corporate Governance Principles and Recommendations.
The Audit and Risk Committee Charter stipulates that the Audit and Risk Committee should meet at least four times a year.
The composition of the Audit and Risk Committee is determined by the Board. In considering appropriate members for the Audit and Risk Committee, the Board will look for a mix of skills and experience, in particular in the area of financial reporting and risk management.
The Chair of the Audit and Risk Committee should be an independent non-executive director.
The members of the Audit and Risk Committee are:
Mr Derek Carter - Chairman
Ms Nicki Bowman
Mr Roger Higgins
A quorum for a meeting of the Audit and Risk Committee is two directors, at least one who must be a non-executive director.
Download the Audit and Risk Committee Charter
The Board has established a Remuneration Committee which is responsible for determining and reviewing compensation arrangements for executives and non-executive directors. It is the Company's objective to attract and retain a highly qualified Board and executive team by remunerating directors and key management fairly and appropriately with reference to relevant employment market conditions. To assist in achieving this objective, the Board has adopted a remuneration strategy that links to and supports the Company's business objectives. By establishing remuneration structures which motivate and reward executives for pursuing targets linked to the Company's business objectives, the Board believes that its remuneration approach will align management to the expectations of its shareholders, to create long-term shareholder value. Remuneration and other terms of employment for executives, including executive directors, are reviewed annually by the Board having regard to performance, relevant comparative information and, where necessary, independent expert advice.
Key performance targets and goals are established annually for executives against which their performance is measured on an annual basis.
The primary responsibilities of the Remuneration Committee are to review and make recommendations on:
Policies for executive recruitment, employment and termination;
The remuneration packages for the Managing Director and executives;
The development and implementation of appropriate incentive plans; and
The remuneration for non-executive directors.
The Remuneration Committee is scheduled to meet three times a year.
The members of the Remuneration Committee are:
Ms Nicki Bowman - Chairman
Mr Derek Carter
Mr Peter Kalkandis
Mr Mike Oppenheimer
A quorum for a meeting of the Remuneration Committee is two directors.
Remuneration Committee Charter
3. Risk Management
As a company focused on exploring for, and extracting mineral resources in different parts of the world, risk is an intrinsic part of the Company's operations. The management of risk within the Company is recognised as a critical part of its business operations. It underpins reliable financial reporting, compliance with relevant legal and regulatory obligations, efficient and effective business operations and safe and environmentally responsive activities.
The Board recognises that due to the nature and size of the Company, it faces additional challenges in adopting best practice systems of risk management and internal control and compliance.
Our activities by their very nature have multiple layers of risk, including:
Highly speculative nature of mineral exploration activities;
Investment and operations subject to foreign jurisdictions;
Nature and size of the Company's operations, and dependence on a small number of key people;
Ongoing commercial viability of mining operations, subject to significant cost and commodity price changes;
Foreign currency exposures;
Exposure to environmental, health and safety issues associated with the mining industry;
Requirement for ongoing additional capital to fund exploration and development activities; and
Certain uninsurable risks.
The Company's challenge is to develop a culture which allows its adventurous and entrepreneurial spirit to generate continued success in the Company's exploration and development endeavours, while building a sound foundation of systems, practices and culture which identify and acceptably manage our risks.
Risk Management Roles and Responsibilities
The Board is ultimately responsible for overseeing the establishment and implementation of effective risk management systems and the monitoring of internal controls and compliance. The Audit and Risk Committee, on behalf of the Board, reviews the effectiveness of the Company's risk management systems, including reviewing and updating the Company's risk profile.
The implementation of the risk management systems and the management of risks within the Company on a day-to-day basis is the responsibility of the Chief Executive Officer, with the assistance of senior management.
It is the responsibility of all Blackthorn Resources' employees and contractors as part of their day-to-day activities, to ensure the Company complies as appropriate with its legal, regulatory, contractual and compliance obligations, and to take appropriate action as required to manage, monitor and report risks.
Risk Management Objectives
The objectives of the Company's risk management programme are to ensure that:
The Company has in place a culture and practices to encourage the identification, assessment and management of risks that may affect the Company's ability to achieve its business objectives;
In managing risk, the Company complies with all relevant laws, regulations and contractual obligations, and that appropriate recognition is given to Blackthorn Resources' social and community obligations;
The Company has in place a structured and effective approach to risk management;
The Company's risk management program appropriate, taking account of the business environment that the Company operates in and the Company's assessed tolerance for risk; and
Effective monitoring and regular reporting of risk is conducted under the risk management program.
Risk Management Framework
To manage the risk exposures faced by the Company, the Board recognises the need to identify areas of significant business risk and to develop and implement strategies to investigate those risks as a basis of a formal system of risk management and internal control and compliance. At least annually, the Company undertakes a formal risk assessment review to confirm and re-prioritise its key business risks and to reassess the Company's risk profile.
The Board meets regularly to evaluate, control , review and oversee the implementation of the Company's operations and objectives. The Company's strategic and business plans are formulated in the context of the risk exposures identified by the Company and the requirements to effectively manage those risks as part of the Company's operations. The Company has implemented and maintains a key business risk register.
Risk Management Practices
The Company maintains a number of policies and procedures which are designed to manage specific business risks. These include:
Board and Board Committee Charters
Code of Conduct
Securities Trading Policy
Risk Management Policy
Corporate Governance Statement
Comprehensive insurance program
Delegation of Authorities
Procedures to define and manage environmental, health and safety matters
Establishment of key performance indicators for senior management that ensure alignment of risk management priorities .
Potential exposures are further managed by the appointment of senior management who have relevant industry experience and skills and regular communication and reporting of current business activities. Specific areas where key business risks have been identified are delegated to relevant management to implement risk mitigation practices.
The Chief Executive Officer and the Chief Financial Officer are required to annually report to the Board as to the effectiveness of the Company's management of its material business risks.
In addition, the Audit and Risk Committee is responsible for assessing the adequacy of the Company's internal control systems and financial reporting obligations. The Chief Executive Officer and the Chief Financial Officer are required to state in writing to the Board whether the Company's financial reports present a true and fair view, in all material respects, of the Company's financial position and operational results and are in accordance with relevant accounting standards.
The Company has established a Risk Management Policy, which sets out the broad principles, responsibilities and practices that are used to manage the Company's risk exposures and the various risk management systems and internal controls operated by the Company to respond to those risks.
Download the Risk Management Policy
4. Ethical Standards/Diversity
All directors, management and staff are expected to consistently apply the highest ethical standards to their conduct to ensure that the Company's affairs and reputation are at all times maintained at the uppermost level.
The Company has established a formal Code of Conduct to guide directors, executives and employees in carrying out their duties and responsibilities. The Code of Conduct sets out the principles and core values by which the Company expects to operate its business and to interact with its stakeholders.
Blackthorn resources values a diverse and inclusive workplace and is committed to finding ways to actively support and encourage a workforce made up of individuals with diverse skills, experiences, backgrounds and attributes. The Company is committed to selecting, developing and supporting people solely on the basis of their capabilities, experience and qualifications, irrespective of gender and other diversity factors.
The Company has established a formal Diversity policy which sets out the Company's approach to diversity and how the Company intends to promote and encourage diversity in the workplace.
Download the Code Of Conduct Policy
Download the Diversity Policy
5. Communication to Market & Shareholders
The Board aims to ensure that the shareholders, on behalf of whom they act, are informed of all information necessary to assess the performance of the directors and the Company.
The Company has implemented a Disclosure Policy that is designed to ensure compliance with its various regulatory disclosure obligations, including compliance with ASX Listing Rules, and to ensure accountability within the Company for that compliance. This Disclosure Policy includes processes for the identification of matters that may have a material effect on the price or value of the Company's securities, and the notification of these matters to the ASX.
Information is communicated to shareholders, regulatory authorities and the broader community through:
The Annual Report and Half-year Report which is made available to all shareholders;
Other periodic reports which are lodged with ASX and available for shareholder scrutiny;
Other announcements made in accordance with ASX Listing Rules;
Special purpose information memoranda issued to shareholders as appropriate;
The Annual General Meeting and other meetings called to obtain approval for Board action as appropriate;
Webcasting of media briefings and general meeting transcripts; and
The Company’s website.
Download the Disclosure Policy
6. Share Trading
Trading of the Company's securities is covered by, amongst other things, the Corporations Act 2001 and the ASX Listing Rules.
The Company has implemented a Securities Trading Policy that establishes strict guidelines as to when directors, officers and employees can deal in the Company's securities. The policy prohibits dealing in the Company's securities at any time whilst in the possession of price-sensitive information not already available to the market. In addition, the directors, officers and employees are not permitted to deal in the Company's securities during certain defined restricted trading periods or "closed periods".
Download the Securities Trading Policy
7. External Auditors
The Company’s external auditor is KPMG.
The external auditor is required 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 auditor's report.