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Shareholder Review
Annual Report
Notice of Meeting
CORPORATE GOVERNANCE
1. APPROACH TO CORPORATE
GOVERNANCE AT TOWER
AUSTRALIA GROUP LIMITED
(TOWER AUSTRALIA)
TOWER AUSTRALIA'S APPROACH TO
GOOD CORPORATE GOVERNANCE
TOWER Australia's Board and Executive
Management have responsibility to achieve
the highest standards of corporate
performance, ethical behaviour and
accountability. The Board has developed
and adopted corporate governance
structures and practices that are consistent
with good practice and ensure the integrity
of the governance framework. Where
developments arise in corporate governance,
the Board is committed to review TOWER
Australia's practices and incorporate
changes where appropriate.
Effective corporate governance practices
add value to TOWER Australia's business by
reducing risk, creating transparency and
enhancing decision-making. It assists
TOWER Australia to ensure future
sustainability and create long term value
for shareholders and other stakeholders.
STANDARDS IN CORPORATE
GOVERNANCE
TOWER Australia has taken into account the
ASX Corporate Governance Principles and
Recommendations published in August
2007 (‘ASX Principles') in its approach to
corporate governance and complies with all
the principles and recommendations.
This report reflects TOWER Australia and its
controlled entities' (the Group) corporate
governance policies and practices as at
30 September 2008.
Further details about TOWER Australia's
corporate governance policies and procedures
are available on the TOWER Australia
website www.toweraustralia.com.au/
investor/corporate_governance. These
documents are updated and reviewed
regularly recognising that corporate
governance is about continual improvement.
2. TOWER AUSTRALIA BOARD
ROLE OF THE BOARD
The Board, as representatives of the
shareholders, has ultimate responsibility
to the shareholders for the performance
and overall governance of TOWER Australia
and its controlled entities. In practice this
is achieved through formal delegation to
the Managing Director for day-to-day
management of the Group and to its three
Board Committees – Audit, Compliance and
Risk Management Committee, Remuneration
and Nominations Committee and the
Investment Committee – for detailed
consideration of matters and making
recommendations.
KEY RESPONSIBILITIES OF THE
BOARD
The Board reserves certain functions to
itself. These responsibilities are outlined
in the Board Charter, a copy of which is
available on the TOWER Australia website
at www.toweraustralia.com.au/investor/
corporate_governance.
Broadly, the responsibilities of the Board
include:
- overseeing the Group including its
controls and accountability systems;
- determining the Group risk management
policies, framework and profile;
- monitoring systems of risk management,
internal controls, legal compliance and
codes of conduct which affect the Group;
- determining strategic objectives
and approving the annual operating
plans, financial targets and capital
expenditure plans;
- assessing and monitoring performance,
including management's performance
against the strategic objectives,
operating plans and financial targets;
- approving all changes to the corporate
structure, including tax and financial,
which are of strategic importance to
the Group;
- determining Group financial and
treasury strategy and policies, including
approving all dividend policies and
distributions to shareholders, lending
and borrowing, tax, and investment and
foreign exchange policies in respect of
shareholders' funds;
- approving capital and operating
expenditure above delegated limits;
- approving all transactions relating to
major business and company acquisitions,
mergers and divestments; and
- approving the appointment and as
appropriate the termination of the
Managing Director and Senior Executives
and determining their remuneration.
BOARD COMPOSITION AND SIZE
The Constitution of TOWER Australia
requires that the Board has a minimum
of three and a maximum of ten Directors.
The size and composition of the Board is
reviewed annually, taking into account the
needs of the business and to ensure there
is an appropriate blend of commercial skills
and experience to govern and add value to
the TOWER Australia business through:
- effective and efficient decision making;
- discharging its responsibilities under
the law effectively and efficiently; and
- understanding the business of the
Company and the environment in
which it operates.
At 30 September 2008, the Board
consisted of:
- five independent non-executive
Directors:
– Robert Thomas;
– Peter Lewinsky;
– Ralph Pliner;
– Elana Rubin; and
– Donald Findlater.
- one executive Director:
– Jim Minto (Managing Director).
Information concerning each Director's
qualifications and experience is set out on
page 4 of the Directors' Report.
BOARD APPOINTMENTS,
PERFORMANCE ASSESSMENT AND
SUCCESSION PLANNING
Nominations and Appointments
Recommendations and nominations for new
Directors are made by the Remuneration
and Nominations Committee and approved
by the Board.
In appointing Directors, the Board
considers:
- the current size and composition of
the Board;
- the strategic needs of TOWER Australia
and its subsidiaries;
- regulatory requirements; and
- the skills, knowledge and independence
of the potential Director.
On appointment, new Directors receive
a Letter of Appointment, which sets out
their duties, the terms and conditions of
appointment and their remuneration.
New Directors are required to participate
in an induction programme to ensure that
they are familiar with their duties and
responsibilities, the TOWER Australia
business and the regulatory environment
in which TOWER Australia operates.
Board Performance Assessment
The Remuneration and Nominations
Committee is responsible for overseeing
the review and performance assessment
of the Board.
Broadly, the evaluation of both the Board
and the individual Directors of the
Company takes into consideration the
following factors:
- the extent and effectiveness to which
the role has been performed;
- the extent to which key decisions have
been made in a timely and effective
manner;
- demonstration of the required expertise
in the role;
- attendance and participation at Board
meetings; and
- contributions made to the Board.
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