FarmWorks Australia Limited (FWA) is committed to adopting and maintaining the highest standard of corporate governance. As a consequence, FWA undertakes regular reviews of its governance principles to improve and foster a corporate culture that promotes confidence and security for all stakeholders. This statement outlines the Company’s main corporate governance practices that are in place.
Board of Directors and its Committees
Board Members
Details of the members of the Board, their experience, expertise, qualifications and independent status are set out in the Board section of the website.
Length of Service
| Larry Shutes |
Non-Executive Chairman |
Appointed 24 August 2010 |
| Larry Shutes |
Non-Executive Director |
Appointed 12 January 2005 |
| Kevin Dart |
Non-Executive Director |
Appointed 26 March 2009 |
| Mathew Denton |
Non-Executive Director |
Appointed 28 September 2010 |
Structure of the Board
Directors of the Company are considered to be independent when they are independent of management and free from any business or other relationship that could materially interfere with the exercise of their unfettered and independent judgment.
The current Board is regarded as being of a composition, size and commitment to consistently and adequately discharge it responsibilities and duties.
The Board considers the following members are independent Directors according to the principles espoused by the ASX Corporate Governance Council as no relevant relationships or connections exist with the Company.
| Larry Shutes |
Non-Executive Chairman |
| Matthew Denton |
Non-Executive Director |
Board Responsibilities
The Board acts on behalf of and is accountable to the shareholders and as such will seek to identify the expectations of the shareholders, as well as other regulatory and ethical expectations and obligations.
In addition, the Board is responsible for identifying areas of significant business risk and ensuring suitable arrangements are in place to manage those risks. The Board has implemented an appropriate plan to discharge these responsibilities.
The responsibility for managing the operation and administration of the Company is delegated by the Board to an appropriately qualified and experienced management team and established procedures are in place to assess the performance of these individuals accordingly.
The Board is responsible for ensuring that management’s objectives and activities are aligned with the expectations of the shareholders and has a number of mechanisms in place to ensure this is achieved. In addition to the establishment of the Committees referred to in this section, these mechanisms include the following:
(a) Implementation of operating plans and budgets by management and the Board monitoring of progress against budget. This includes the establishment and monitoring of key performance indicators (both financial and non-financial) for all significant business processes; and
(b) Procedures to allow Directors, in the furtherance of their duties, to seek independent professional advice at the Company’s expense.
The Company has Share Trading and Ethical Behaviour policies in place that the Board and Staff must follow, and which includes a code of conduct and Company values.
Board Committees
The Company did not maintain separate Remuneration, Nomination and Audit Committees. However, following the acquisition of the FarmWorks group of companies in 2010 and its restructure, the Board is currently reviewing the composition of these Committees with an intent to formalise these Committees in the near future.
Monitoring the Board’s Performance & Communication to Shareholders
In order to ensure that the Board continues to discharge its responsibilities in an appropriate manner, the performance of all Directors is reviewed annually. 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. Information is communicated to the shareholders through:
(a) the Financial Statements which are provided via the Company’s website to all shareholders (unless a shareholder has specifically requested to receive a physical copy);
(b) the half yearly reports which are provided via the Company’s website to all shareholders and sent to shareholders who request it;
(c) the Annual General Meeting and other meetings called to obtain approval for Board action as appropriate;
(d) all announcements made to the market being placed on the Company’s website after they are released to the ASX.
Principles of Corporate Governance
The Australian Securities Exchange Ltd (ASX) has published 10 essential corporate governance principles and recommendations. Under ASX listing rules, listed companies are required to provide a statement disclosing the extent to which they have followed these recommendations. In the following, the ASX principles and recommendations are listed together with the Company’s response.
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1.0
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Lay Solid Foundations for management and oversight.
The Board has clear policies and processes to delineate the respective functions, roles and responsibilities of the Board and Management.
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1.1 Establish the functions reserved to the Board and those delegated to management.
At the time of appointment of Board members and senior management personnel, the various delegations, functions and duties are clearly defined. An ongoing regular review process ensures each participant operates within the defined parameters.
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1.2 Processes for evaluation of performance of senior executives.
Senior executive performance is the subject of assessment by regular evaluation by the Board based on key performance indicators and peer review. Independent Directors undertake separate independent review processes. The Board receives monthly reports of performance and assessment.
Annual appointment reviews are conducted by the Board.
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1.3 Reporting Results.
The Company intends to conduct performance reviews of the CEO and executives during the financial year.
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2.0
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Structure the Board to add value based on composition, size and commitment to discharge responsibilities and duties.
The Board has undertaken a number of structural changes during the year consistent with the change in business operations to improve performance of the business and management, and to meet the future demands and changes in direction as they arise.
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2.1 Majority of the Board should be independent.
The current Board has three members of which two are independent. The Board undertakes regular assessments to ensure that the independence of each Director is maintained.
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2.2 Independent Chair.
The Chairman, Larry Shutes is considered independent.
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2.3 Chair and CEO not the same.
The Chairman is not the Chief Executive Officer.
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2.4 Establish a Nomination Committee.
The functions of a Nomination Committee have been undertaken by the Board due to the size of the Company and the demands of business operations. A separate Nomination Committee will be established in accordance with the guidelines.
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2.5 Board, Committee and Director evaluation process.
The Company previously did not have in place formal evaluation measures and processes as, prior to the acquisition of the FarmWorks group of companies, the nature, size and scope of the business justified an informal process. The Board has taken steps to introduce performance evaluation measures and schedule reviews. New Director induction is undertaken by nominated independent Directors with the assistance of officers and external independent advisers. Directors have access to all records and Company information.
The Company Secretary maintains Board policy and procedures and coordinates the timely completion and dispatch of Board agenda and briefing papers. The Company Secretary is appointed and removed by the Board as a whole.
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2.6 Reporting Results.
The skills and experience, independent status, period of office of each member of the Board are reported in the “Information on current Directors” in the Annual Report. The Board has adopted a procedure of seeking independent advice at relevant times to assist the Board to assess proposals and make appropriate decisions at the Company’s expense.
The selected advisers are specialised in relevant areas and have advised the Board at regular intervals as the need arises. The more common areas of advice include legal, taxation, corporate, insurance and finance.
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3.0
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Promote ethical and responsible decision making.
The Company operates using clear standards of ethical behaviour for all members of the Company. Regular review is undertaken to maintain and observe the standards. The Company’s Ethical and Securities Trading policies are regularly reviewed.
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3.1 Establish a code of conduct to guide the Directors, key executives and employees as to:
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3.1.1 practices necessary to maintain confidence in the Company’s integrity.
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3.1.2 practices necessary to meet legal obligations and the expectations of shareholders.
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3.1.3 the responsibility and accountability of individuals for reporting or investigating reports of unethical practices.
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The Company satisfies these requirements through an adopted policy governed and directed by members of the Board and senior management.
The Company has incorporated the code of conduct into the management process and encourages, integrates and maintains such practices in all levels of operation including stakeholder and public contact.
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3.2 Disclose the policy concerning trading in Company securities by Directors, officers and employees.
The Company has a formal policy which sets out time restrictions on share dealings. The Company policy is that of the Corporations Law and ASX Listing Rules – click to view the current trading policy.
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3.3 Reporting Results.
The Company’s compliance with the Principle is detailed above.
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4.0
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Safeguard integrity in financial reporting.
The Board regularly undertakes the review of the Company’s financial position to ensure the truthful and factual presentation of the Company’s financial position as presented in financial statements and other records. The Company auditor’s advice is regularly sought to ensure such objectives are maintained according to the relevant accounting standards.
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4.1 Establish an Audit Committee.
The functions of an Audit Committee have previously been undertaken by the Board due to the size of the Company and the demands of business operations. Following the acquisition of FarmWorks group of companies, a separate Audit Committee is in the process of being established in accordance with the guidelines.
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4.2 Appropriate structure of Audit Committee.
The Board considers that any future Audit Committee would consist of a minimum of two independent Directors, the majority being considered independent and non-executive.
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4.3 Committee Charter.
The Board has established policies that satisfy the relevant requirements given the size, nature and scope of the current Company operations. These policies are published on the Company’s website.
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4.4 Reporting Results.
The Company’s compliance with the Principle is detailed above.
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5.0
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Make timely and balanced disclosure.
The Board, on an ongoing basis and formally at each Directors meeting, considers the Company’s disclosure obligations and regards those obligations and the dissemination to the market in a timely, balanced and factual manner of paramount importance.
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5.1 Establish written policies and procedures designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior level for that compliance.
There are written policies to evidence the stated processes of consideration and the Board relies upon the integrity and independence of its members to make such decisions. The Board regularly reviews the policies to ensure they satisfy the Company’s obligations for disclosure of material matters in accordance with the ASX Listing Rules.
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5.2 Reporting Results.
The Company’s compliance with the Principle is detailed above.
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6.0
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Respect the rights of Shareholders.
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6.1 Design and disclose a communications strategy to promote effective communication with shareholders and encourage effective participation at general meetings.
Information is communicated to shareholders through:
- the distribution of the annual report to all shareholders through the website and to those shareholders who request the document,
- the half yearly reports released to the ASX,
- ASX releases in accordance with continuous disclosure obligations, and
- information publicly available on the Company’s website.
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6.2 Reporting Results.
The Company encourages stakeholder contact and provides information through improved technology where available. The external auditor attends shareholder meetings to answer shareholder questions where appropriate.
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7.0
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Recognise and manage risk.
The Board, in conjunction with senior management and independent advisers, undertakes regular risk assessments for existing and future operations, undertakings, systems and processes to maintain acceptable risk levels.
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7.1 Establish policies on risk oversight and management.
Appropriate risk policies are in place and subject to regular Board and management assessment. Risk oversight and management issues and policies are reviewed by the Board as a whole and approved by resolution of the Board (with abstentions from relevant Directors where there is a conflict of interest).
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7.2 Design and implement risk management and internal control system for material business risks and report on risk management. Board responsibility to report management performance in the current reporting management of business risk.
The Board receives regular reports from management based on a structured review and system. The review system acts as a control system. The risk management policies involve an appropriate internal control system. The Board intends to formalise that part of its current reporting system as part of its risk management and internal control policies, and management of the systems. The Risk Management Committee function is adequately undertaken by the Board.
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7.3 Board disclosure of receipt of assurance from CEO/CFO that the declaration under Section 295A of the Corporations Act is based upon a sound system of risk management and internal control which is operating effectively for financial reporting risks.
The assurance has been received by the Board.
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7.4 Reporting Results.
The Company’s compliance with the Principle is detailed above.
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8.0
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Remunerate fairly and responsibly.
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8.1 The Board should establish a Remuneration Committee.
A separate Remuneration Committee is established in accordance with the guidelines. The Board and the Remuneration Committee seeks independent advice of current trends and appropriate remuneration structures based on the role to be filled and the size, nature and scope of operations of the Company where necessary.
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8.2 Non-Executive Directors remuneration should be distinguished from executive Directors and senior management.
This is the case in respect to relevant remuneration packages.
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8.3 Reporting Results.
The Company’s compliance with the Principle is detailed above.
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