1. Summary
The Board charter sets out the functions and responsibilities of the Board, along with certain matters relevant to the operation of the Board.
2. Board Responsibilities
The Board is accountable to shareholders for the performance of the company and the Directors aspire to the very highest standards of corporate governance.
The Board establishes strategic guidance for the company and delegates responsibility for the management of the company to the Managing Director. The company’s strategic plan is prepared by management and reviewed and approved annually at a special Board meeting.
3. Powers and Duties of Directors
The powers and duties of Directors are determined by clause 5 and 9 of the Constitution of the Company. The major functions of the Board include:
• Setting the company’s values and standards of conduct and ensuring these are adhered to in the interests of all stakeholders
• Approving policies, strategies, budgets, and plans
• Assessing performance against strategies to monitor both the suitability of those strategies and the performance of management and the Board itself
• Reviewing operating information to understand the company’s position, and approving financial and other reporting
• Identifying areas of significant business risk and ensuring systems and procedures are in place to manage those risks
• Considering management recommendations on key issues – including acquisitions, funding and significant capital expenditure
• Ensuring that the company acts legally and responsibly on all matters and that the highest ethical standards are maintained
• Appointing, terminating and reviewing the performance of the Managing Director
• Ratifying the appointment and, where appropriate, removal of the Chief Financial Officer and the Company Secretary
• Reporting to shareholders
As the Board acts on behalf of and is accountable to shareholders, the Board seeks to identify the expectations of the shareholders, as well as other regulatory and ethical expectations and obligations.
4. Board Structure
Chairman
The Directors may elect one of their members as Chairman and another as Deputy Chairman.
The Chairman will be a non-executive Director and his powers are determined by the Constitution of the Company.
The Chairman of the Board cannot be a former Managing Director or Managing Director of the Company.
The Chairman is required to meet regularly with the Managing Director.
Board Composition
• The Board should comprise between 3 and 10 Directors
• The Board should comprise Directors with a broad range of skills and experience that are relevant to the property development industry and so that it has a proper understanding of, and competence to deal with, the current and emerging issues of the business
• A majority of the Board should be non-executive
5. Retirement of Directors
The company’s constitution specifies that all Directors (with the exception of the Managing Director) must retire from office no later than the third Annual General Meeting following their last election. A retiring Director is eligible for re-election.
6. Meetings
The Board will normally meet bi-monthly and additionally as required.
7. Board's Rights
The Board, or individual Directors, may obtain independent professional advice if it (or the Director) considers it necessary, with the costs to be borne by the Company.
8. Independence
In March 2003 the ASX Corporate Governance Council made a recommendation that the majority of members on the Board of a publicly listed Company should be independent. When this recommendation was introduced, having regard to the size of the company and the composition of the Board, the Board did not consider it necessary for a majority of the Directors to be independent. However, future appointments to the Board will be made having regard to the desirability of balancing the Board towards a greater number of independent Directors.
The ASX Corporate Governance Council also recommends that the majority of members on certain Board Committees be independent. Following from the above, the Board does not consider it necessary for the majority of Directors on its Committees to be independent. However, the composition of Committees will also be reviewed upon the appointment of further independent Directors.
The Board will make future appointments for the position of Chairperson having regard to the desirability of appointing an independent Director to the position, subject to the Director having satisfied other eligibility criteria established by the Board at the time of appointment.
Individual Directors do not participate in assessing their own independence. The process for assessment will occur annually or where there is a change in a Director’s circumstances which may impact their status as independent Directors. The Board is required to consider all of the circumstances relevant to a Director in determining whether the Director is free from any interest and any business or other relationship, which could, or could reasonably be perceived to, materially interfere with the Director’s ability to act in the best interests of the Company.
The definition of independence is shown below and the Corporate Governance Statement or Directors’ report in the Annual report will identify those Directors considered to be independent, and their period of tenure. (ACGC Recommendation 2.1). If a Director loses their independence this will be disclosed immediately to the ASX.
All Directors must comply with the Code of Conduct.
9. Board Review
The Board will review its performance annually or more regularly if required and consider changes to improve the effectiveness of the Board or its Committees.
The Corporate Governance Statement in the annual report will disclose whether such a review has taken place in the year and how it was conducted.
10. Disclosure of Directors Interests in Cedar Woods Properties Limited
In accordance with section 231 of the Corporations Act, a Director of the Company who is in any way, whether directly or indirectly, interested in a contract or proposal with the Company shall, as soon as practicable after the relevant facts have come to the Director’s knowledge, declare the nature of the interest to the Board.
11. Disclosure of Directors Shareholdings/Interests
In accordance with section 205G of the Corporations Act and the Listing Rules all Directors must notify the Company of:
• Their relevant direct or indirect interests in securities of the Company
• Rights or options over any of the Company’s securities
• Interests in contracts to which they are a party or under which they are entitled to a benefit and that confer a right to call for or deliver shares or securities in the Company or a related body corporate and
• Any changes in the above interests within 5 business days of the change
• and the Company Secretary shall disclose this information to the ASX as required by the Listing Rules.
Directors must also comply with the rules that relate to the lodgement of Substantial Shareholder notices, where relevant.
A Director who:
• Is in any way interested in a contract or proposed contract with the Company or
• Holds any office or possesses any property as a result of which duties or interests might be created which are directly or indirectly in conflict with that Director’s duties or interests as a Director
Must declare the fact and the nature of the interest, or nature, character and extent of the conflict at the first Board meeting held after the relevant facts come to the Director’s knowledge or after appointment as a Director (whichever is later).
The Board shall determine, if it is within its power to do so, whether the proposed transaction, which creates the interest or conflict in duty, shall proceed, and the relevant Director(s) shall not vote in respect of the proposed transaction.
Any transaction conducted by a Director on behalf of the Company is to be advised to the Chairman, CEO or Company Secretary of the Company.
Public disclosure and insider trading provisions of the Corporations Act and the ASX apply at all times. A Director may not transact in the Company’s securities if that Director possesses information that is not generally available, and, if the information were generally available, a reasonable person would expect it to have a material effect on the price or value of the securities of the Company.
No trading of securities will be allowed where a market sensitive announcement is pending. This includes half year and annual profit announcements where those announcements are likely to contain financial data which is materially different to information already in the market.
12. Definition of Independence
An independent Director is a non-executive Director and:
1. Is not a substantial shareholder of the company or an officer of, or otherwise associated directly with, a substantial shareholder of the company, where substantial shareholder is defined by section 9 of the Corporations Act
2. Within the last three years has not been employed in an executive capacity by the company or group, or been a Director after ceasing to hold any such employment
3. Within the last three years has not been a principal of a material professional advisor or a material consultant to the company or group, or an employee associated with the service provided
4. Is not a material supplier or customer of the Company or group, or an officer of or otherwise associated directly with a material supplier or customer
5. Has no material contractual relationship with the company or another group member other than as a Director of the Company
6. Has not served on the Board for a period which could, or could reasonably be perceived to, materially interfere with the Director’s ability to act in the best interests of the Company
7. Is free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with the Director’s ability to act in the best interests of the Company
The above definition of independence is reproduced from the ASX Principles of Good Corporate Governance and Best Practice Recommendations, Box 2.1.
The threshold for assessing materiality as an advisor, consultant, supplier, customer or other contractual relationship shall be reviewed from time to time by the Board but shall initially be set at an aggregate transaction amount of $100,000 in any one financial year. Purchases of the company’s products by Directors under normal terms and conditions, and Director’s fees, shall ordinarily be ignored for the purpose of the materiality test.
A Director will not be considered independent if he or she has served on the Board for a period exceeding 12 years.