Board Charter
The Board has adopted a formal Board Charter which details the functions and responsibilities of the Board and distinguishes such functions and responsibilities from those which have been delegated to management.
The Board is responsible for the management of the affairs of the Group, including:
- contributes to and approves the Group’s corporate strategy.
- approves the Group’s annual budgets and business plans and monitors financial performance against them.
- approves capital expenditure in relation to material corporate transactions, being of a nature, or in excess of delegated monetary levels, determined by the Board from time to time.
- approves major Group policies, including the Group’s Code of Conduct, Share Trading Policy, Employee Investment Policy and the Continuous Disclosure Policy and other compliance-related policies.
- approves significant accounting policies and the Group’s financial reports and material reporting requirements.
- appoints the Chief Executive Officer (“CEO”).
- develops a succession plan for the Chief Executive Officer, and approves succession plans for other senior management positions.
- monitors the performance of the Chairman, the CEO and the Group’s senior executives and oversees the appointment and termination of executives who report directly to the CEO.
- considers and approves the remuneration strategy and policies and the total level of annual remuneration for the Group, and the level of remuneration for senior executives.
- at least annually, reviews the performance and effectiveness of the Board, the Board’s permanent Committees and their individual members.
- approves the appointment and terms of appointment of the external auditor.
- considers, approves and monitors the effectiveness of the Group’s overall risk management and control framework, through, among other steps, regular reports to the Board through the Audit and Risk Management.
- Committee from the Head of Risk and regular updates (as required) from management on significant risk issues.
- approves and reviews the performance and effectiveness of the Company’s corporate governance policies and procedures.
The Board Charter also sets out the specific powers and responsibilities of the Chairman and the Managing Director and CEO. Those delegated powers are subject to the specific powers and authorities delegated to the various Board Committees and the following powers which are retained by the Board:
- contracts, commitments and capital expenditure above specified thresholds and limits determined by the Board from time to time;
- expenditure outside the ordinary course of business in excess of thresholds or limits specified by the Board for this purpose;
- major strategic decisions;
- adoption of the Group's annual budget;
- the issue of any equity securities by the Company, except under a programme previously approved by the Board; and
- commencing or taking a significant step in major litigation.
The Board has delegated to management, responsibility for:
- strategy - developing and implementing corporate strategies and making recommendations on significant corporate strategic initiatives.
- senior management selection - making recommendations for the appointment of senior management, determining terms of appointment.
- evaluating performance, and developing and maintaining succession plans for senior management roles.
- financial performance - developing our annual budget and managing day-to-day operations within the budget.
- risk management - maintaining effective risk management frameworks and providing the Board with timely and relevant information on the risks faced by the Company and how they are managed.
- continuous disclosure - keeping the Board and market fully informed about material developments.
- corporate responsibility - managing day-to-day operations in accordance with standards for social, ethical and environmental practices which have been set by the Board.
To assist Directors to understand the Company’s expectations of them, the Non-Executive Directors have been issued with formal letters of appointment and the Executive Directors have formal employment contracts governing their employment.
Structure of the Board
The Board is comprised of a majority of Independent Non-Executive Directors, with a broad range of skills, expertise and experience from a diverse range of backgrounds. The Board considers that collectively, the Directors have the range of skills, experience and expertise necessary to appropriately govern Babcock & Brown.
The board is currently comprised of the following nine members:
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James Babcock
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Executive Chairman
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2004
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Elizabeth Nosworthy, AO
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Deputy Chairman / Independent Non-Executive Director
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2004
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James Fantaci
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Executive Director
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2004
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Phillip Green
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Managing Director/CEO
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2004
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Ian Martin
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Independent Non-Executive Director
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2004
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Martin Rey
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Executive Director
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2004
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Michael Sharpe, AO
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Independent Non-Executive Director
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2004
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Dieter Rampl
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Independent Non-Executive Director
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2005
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Joe Roby
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Independent Non-Executive Director
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2006
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The Executive Chairman of the Company, Mr Babcock, is not an Independent Director.
The Board considers the appointment of an Executive Chairman to be appropriate in view of the following circumstances:
- Mr Babcock has been Chairman of the pre-listed Babcock & Brown Group since he founded it in 1977. He has an indepth knowledge and understanding of the Group’s operations and has a successful record of leading the business for 27 years prior to its listing. The Board is fully supportive of Mr Babcock holding the office of Chairman and considers it to be in the best interests of shareholders that Mr Babcock continues in that role, so that the Company benefits from the continuity of his experience and knowledge of the business.
- to ensure that there is an appropriate balance in the manner in which the Directors discharge their responsibilities and an independent review of the performance of management, the Board has:
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- appointed Ms Nosworthy as Deputy Chairman and lead Independent Director. Ms Nosworthy will chair any Board meetings from which the Chairman is absent or from which he must absent himself due to a conflict of interest and any meetings of Independent Directors who meet in that capacity.
- established an Audit & Risk Management Committee comprising only Independent Directors and a Nomination & Governance Committee and a Remuneration Committee comprising of a majority of Independent Directors.
- established protocols for dealing with conflicts of interest. In particular, the Board has put in place a range of internal policies designed to ensure that the interests of shareholders are at all times preferred to those of Directors and that any actual or potential conflicts of interest are promptly disclosed and dealt with by the Directors. These include the Board Charter, the Code of Conduct, the Share Trading Policy and the Employee Investment Policy.
- ensured that significant matters affecting the Company are reserved for consideration by the full Board, for example major strategic decisions, capital expenditure above specified thresholds and expenditure outside the ordinary course of business.
- any Director is entitled to seek independent professional advice (including, but not limited to, legal, accounting and financial advice) at the Company's expense on any matter connected with the discharge of his or her responsibilities, in accordance with the procedures set out in the Board Charter.
The roles of Chairman and Chief Executive Officer are not exercised by the same person.