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The following sets out how Global Geoscience Limited is implementing the ASX “Principles of Good Corporate Governance and Best Practice Recommendations”:
1. LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT
Global Geoscience Limited’s [GSC] has a Board & Governance Charter, which discloses the specific responsibilities of the Board and provides that the Board shall delegate responsibility for the day to day operations and administration of GSC to the Managing Director and other Executive Directors.
2. STRUCTURE THE BOARD TO ADD VALUE
2.1 Whilst none of the current Board members are independent directors, the Board is of the view that the Board is structured in such a way as to add value and that the number of directors is appropriate for the size and complexity of the business.
The Board of GSC as at the lodgment of this statement is:
• Mr. Robert Reynolds – Non-Executive Chairman
• Mr. Bernard Rowe – Managing Director
• Mr. Patrick Elliott – Non-Executive Director
• Mr. Peter Nicholson – Technical Director
2.2 Whilst Mr. Reynolds is not an independent director, he is not an executive and the Board is of the view that the Chairman is appropriate for the size and complexity of the business.
2.3 GSC does not currently have a Chief Executive Officer. It has a Managing Director which, for all practical purposes is the same role as a Chief Executive Officer. Mr. Rowe is the Managing Director. Mr. Reynolds is a non-executive Chairman.
2.4 The Directors consider that there is no need for GSC to have a Board nomination committee due to the size and scope of the Company. The Board, as a whole, serves to identify, appoint and review Board membership through an informal assessment process, facilitated by the Chairman in consultation with the Company’s external professional advisers. This decision will be reviewed annually.
2.5 This statement once ratified by the Board in a meeting of directors will be posted on the Company Website. The Corporate Governance statement will be reviewed annually as part of the annual review of accounts.
3. PROMOTE ETHICAL AND RESPONSIBLE DECISION-MAKING
3.1 GSC has a Code of Ethics and Conduct, which provides a framework for decisions and actions in relation to ethical conduct in employment. [adopted 19 September 2008]
3.2 GSC has a Securities Trading Policy. [adopted 19 September 2008]
4. SAFEGUARD INTEGRITY IN FINANCIAL REPORTING
4.1 The Board requires the Managing Director to make a statement at the relevant time, stating that the company’s financial reports present a true and fair view, in all material respects, of the company’s financial condition and operational results and are in accordance with relevant accounting standards.
4.2 The Board has an Audit Committee.
4.3 The Audit Committee consists of the 2 non-executive directors. None of the members are independent directors. The Chairman of the Audit Committee is a different person than the Chairman of the Board. Whilst not in accordance with the Best Practice Recommendations, GSC is of the view that the experience and professionalism of the persons on the Audit Committee is sufficient to ensure that all significant matters are addressed and actioned. Further, the Board does not consider that the GSC is of sufficient size to justify the appointment of additional directors and to do so for the sole purpose of satisfying this requirement would be cost prohibitive and counter-productive.
4.4 The Board delegates the Audit Committee:
• To deal with the issues and responsibilities so as to ensure the integrity of the financial statements of the Company and the independence of the external auditor.
• To review the audited annual and half yearly financial statements and any reports which accompany published financial statements, and in accordance reports to the Board in its entirety.
• To consider the appointment of the external auditor and review the appointment of the external auditor, their independence, the audit fee and any questions of resignation or dismissal.
5. MAKE TIMELY AND BALANCED DISCLOSURE
GSC has a Continuous Disclosure Policy in place designed to ensure the factual presentation of the Company’s financial position. [adopted 19 September 2008]
6. RESPECT THE RIGHTS OF SHAREHOLDERS
6.1 GSC has a Shareholder Communications Strategy, which aims to ensure that shareholders are informed of all major developments affecting the Company’s state of affairs. [adopted 19 September 2008]
6.2 The Board will request the external auditor to attend all future annual general meetings of the Company to answer shareholder questions about the conduct of the audit and the preparation of the auditor’s report.
7. RECOGNISE AND MANAGE RISK
7.1 The Board is responsible for the oversight of GSC’s risk management and control framework. The Board oversees an ongoing assessment of the effectiveness of risk management and internal compliance and control.
7.2 Although there is currently no chief financial officer the Board will consider whether it is appropriate to require the Managing Director and Finance Director (or their equivalents) to provide a statement that:
(a) the integrity of the financial statements is founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the board; and
(b) the company’s risk management and internal compliance and control system is operating efficiently and effectively in all material respects at the relevant time.
8. ENCOURAGE ENHANCED PERFORMANCE
8.1 The Board has developed a formal process for performance evaluation of the Board and the committees. The Corporate Governance Policy will be posted on the Company’s website.
9. REMUNERATE FAIRLY AND RESPONSIBLY
9.1 The executive directors’ remuneration and a summary of the terms of their service arrangements are disclosed in the Prospectus. The Company has developed a formal remuneration policy which deals with these matters.
9.2 It is not Company policy to have a remuneration committee, given the scope and size of the Company. The Board as a whole serves to set and review remuneration policy in relation to senior executives, including executive directors. Whilst not in accordance with the Best Practice Recommendations, the Company is of the view that the experience and professionalism of the persons on the Board is sufficient to ensure that all significant matters are addressed and auctioned. Further, the Board does not consider that the Company is of sufficient size to justify the appointment of additional directors and to do so for the sole purpose of satisfying this requirement would be cost prohibitive and counter-productive.
9.3 The Company’s constitution provides that the remuneration of non-executive directors will be not more than the aggregate fixed sum determined by a general meeting. The aggregate remuneration has been set at an amount of $200,000 per annum. Currently Mr. Reynolds and Mr. Elliott are each paid a set fee of $40,000 per annum. Full details of the consultancy agreement between the Company and Mr. Rowe (Managing Director) were disclosed at section 13 of the prospectus. Full details of the consultancy agreement between the Company and Mr. Nicholson (Technical Director) were disclosed at section 13 of the prospectus.
9.4 The Company will ensure that any payment of equity-based executive remuneration is made in accordance with thresholds set in plans approved by shareholders.
10. RECOGNISE THE LEGITIMATE INTERESTS OF STAKEHOLDERS
10.1 The Company has established a code of conduct to guide compliance with legal and other obligations to legitimate stakeholders.
Adopted by the Board 19 September 2008
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