Arrowhead Resources Limited has adopted systems of control and accountability as the basis for the administration of corporate governance. Some of these policies and procedures are summarised below.
The Board of Arrowhead Resources Limited is responsible for its corporate governance, that is, the system by which the Company and its controlled entities (the Group) are managed.
Corporate Governance Statement
This statement outlines the main corporate governance practices of Arrowhead Resources Ltd (Arrowhead) , which comply with the ASX Corporate Governance Council recommendations, unless otherwise stated. The Corporate Governance Statement is dated 21 September 2016. The Corporate Governance Statement was approved by the Board of Arrowhead on 21 September 2016.
The Company is committed to implementing the highest standards of corporate governance appropriate for a Company of its size, scale and complexity. In determining what those high standards should involve, the Company has turned to the ASX Corporate Governance Council’s Principles of Good Corporate Governance and Best Practice Recommendations. The ASX Corporate Governance Council (“the Council”) issued the third edition of the Corporate Governance Principles and Recommendations in March 2014.
1. Board of Directors
Role of the Board and Management
The Board represents shareholders’ interests in continuing a successful business, which seeks to optimise medium to long-term financial gains for shareholders. By focusing on long-term gains for shareholders, the Board believes that this will ultimately result in the interests of all stakeholders being appropriately addressed when making business decisions.
The Board is responsible for ensuring that the Group is managed in such a way to best achieve this desired result. Given the current size and operations of the business, the Board currently undertakes an active, not passive, role.
The Board’s role and the Group’s corporate governance practices are being continually reviewed and improved as required.
Arrowhead recognises the benefits of diversity where people from different backgrounds can bring innovations, ideas, understanding and solutions to the company. Arrowhead believes that increased diversity will add to efficiency, stakeholder satisfaction and the realisation of the company’s goals and vision in the future.
It is for these reasons that the Board of Arrowhead has adopted this Diversity Policy as a means of enhancing the company’s performance by recognising and utilising the contribution of diverse skills and talent from its Employees, Officers and Directors.
The Board has adopted a self-evaluation process to measure its own performance during each financial year. Also, an annual review is undertaken in relation to the composition and skills mix of the Directors of the Company.
2. Composition of the Board and New Appointments
The Company currently has the following Board members:
Michael Rosenstreich Chairman / Managing Director
Jason Peterson Non-Executive Director
John Damian Kenny Non-Executive Director
The Company’s Constitution provides that the number of directors shall not be less than three and not more than ten. There is no requirement for any shareholding qualification.
Committees of the Board
The Board considers that the Company is not currently of a size, nor are its affairs of such complexity to justify the formation of any separate or special committees. The Board as a whole is able to address the governance aspects of the full scope of the Company’s activities and to ensure that it adheres to appropriate ethical standards.
The Board has also established a framework for the management of the Group including a system of internal controls, a business risk management process and the establishment of appropriate ethical standards.
The full Board currently holds meetings at such times as may be necessary to address any general or specific matters as required. If the Group’s activities increase in size, scope and nature, the appointment of further separate or special committee’s will be reviewed by the Board and implemented if appropriate.
3. Ethical Standards
The Board acknowledges the need for continued maintenance of the highest standard of corporate governance practice and ethical conduct by all Directors and employees of the Group.
Code of Conduct for Directors and Key Executives
The Board has adopted a Code of Conduct for Directors and Key Executives to promote ethical and responsible decision-making. The code is based on a code of conduct prepared by the Australian Institute of Company Directors.
Directors and key executives are also obliged to comply with the Company’s Code of Ethics.
Code of Ethics
The Company has implemented a Code of Ethics, which provides guidelines aimed at maintaining high ethical standards, corporate behaviour and accountability within the Company.
An employee that breaches the Code of Ethics may face disciplinary action. If an employee suspects that a breach of the Code of Ethics has occurred or will occur, he or she must report that breach to management. No employee will be disadvantaged or prejudiced if he or she reports in good faith a suspected breach. All reports will be acted upon and kept confidential.
Dealings in Company Securities
The employees, officers and directors of Arrowhead may have in their possession sensitive commercial information which could materially affect the value of Arrowhead securities. The Corporations Act 2001(CA) prohibits insider trading in relation to financial products including shares,options and other securities. The provisions are wide ranging and breaches are serious offences.
This policy is designed to assist in preventing breaches of the insider trading provisions of the Corporations Act. Ultimately, it is the responsibility of each employee, officer and director to ensure that none of his or her dealings could constitute insider trading.
This prohibition applies regardless of how the designated officer learns the information (e.g. even if that person or employee overhears it or is told in a social setting).
Interests of Other Stakeholders
The Company’s objective is to continue to develop and ultimately aim to commence production from the Abu Dabbab Project in Egypt and to develop its other projects in Egypt and Eritrea. As the Company embarks upon the development and production phases at Abu Dabbab it will aim to ensure the highest standard of environmental care is achieved in all its operations.
To assist in meeting its objective, the Company conducts its business within the Code of Ethics and Code of Conduct, as outlined above.
4. Corporate Reporting
Integrity of Financial Reporting
The Company’s Managing Director and Chief Financial Officer (or equivalent) report in writing to the Board that:
- the consolidated financial statements of the Company and its controlled entities for each half and full year present a true and fair view, in all material aspects, of the Company’s financial condition and operational results and are in accordance with accounting standards;
- the above statement is founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the Board; and
- the Company’s risk management and internal compliance and control framework is operating efficiently and effectively in all material respects.
Role of Auditor
In accordance with the requirements of the Corporations Act, the Company invites the auditor 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.
The company appointed a new auditor in 2016 following a competitive tender. External auditors are selected on the basis of professional skills, reputation, service levels and fees. The current policy of the external auditor is to rotate the audit engagement partner every 5 years.
5. Disclosure of Information
Continuous Disclosure to ASX
In accordance with the ASX Listing Rules, the Company will immediately notify the ASX of information:
- concerning the Company that a reasonable person would expect to have a material effect on the price or value of the Company’s securities; and
- that would, or would be likely to, influence persons who commonly invest in securities in deciding whether to acquire or dispose of the Company’s securities.
The only exception to this is where the ASX Listing Rules do not require such information to be disclosed.
Upon confirmation of receipt from the ASX, the Company will post all information disclosed in accordance with this policy on the Company’s website in an area accessible by the public.
6. Communication with Shareholders
The Company respects the rights of its shareholders and to facilitate the effective exercise of those rights the Company is committed to:
- communicating effectively with shareholders;
- giving shareholders ready access to balanced and understandable information about the Company and corporate proposals; and
- making it easy for shareholders to participate in general meetings of the Company.
7. Risk Management
Identification of Risk
The Company has adopted a Policy on Risk Oversight and Management of Material Business Risks.
The Board is responsible for the oversight of the Group’s risk management and control framework. Responsibility for control and risk management is delegated to the appropriate level of management within the Group with the Managing Director and Chief Financial Officer having ultimate responsibility to the Board for the risk management and control framework.
Arrangements put in place by the Board to monitor risk management include regular reporting to the Board in respect of operations and the financial position of the Group.
8. Remuneration Arrangements
The broad remuneration policy is to ensure that remuneration properly reflects the relevant person’s duties and responsibilities, and that the remuneration is competitive in attracting, retaining and motivating people of the highest quality. The Board believes that the best way to achieve this objective is to provide Executive Directors and executives with a remuneration package consisting of fixed components that reflect the person’s responsibilities, duties and personal performance.