Corporate Governance
Role of the Board and Management
The Board of Directors of Mount Burgess Mining N.L. is responsible for the corporate governance of the Company. The Board determines and monitors the business and affairs of Mount Burgess Mining N.L. and its subsidiaries on behalf of the shareholders.
Management has the responsibility of conducting the day to day business of the Company in accordance with the determination of the Board.
Composition of the Board
The Company’s Constitution requires a minimum of three Directors. This number can be increased in accordance with the requirements of the Company. Currently the Board of Directors comprises four members. Three of the current Directors, Mr R O’Regan, a director of seven years; Mr G Taylor, LLB, a director of eight years and Mr A P Stirling FCA, a director of four years, are non-executive directors. Of these, Mr A P Stirling is a substantial shareholder. None of the non-executive directors of the Company are directly or indirectly material suppliers to the Company nor do they have any material contractual relationship with the Company other than as Directors to the Company.
Whilst the Board currently comprises a majority of non-executive directors, because of the size of the Company, a majority of executive directors may occur where the direction of the Company requires additional executive expertise. For commercial reasons, the Company will not necessarily appoint additional non-executive directors simply for the purpose of maintaining a majority of non-executive directors on the Board.
Mr N Forrester is the Chairman and Managing Director of the Company.
The Board reviews its composition on a continual basis to ensure that it comprises sufficient members to achieve the purpose and direction of the Company and that its members have the expertise and experience in their field, relevant to that purpose and the direction of the Company. Directors appointed to the Board are subject to election by shareholders at the following Annual General Meeting and thereafter Directors, other than the Managing Director, are subject to re-election at least every three years.
Review Committees
The Company does not have a separate audit committee, nomination committee or remuneration committee at the date of this report. Any matters to be dealt with by a committee are dealt with by the six Directors who currently comprise the Board.
Remuneration
The Board reviews the remuneration packages and policies applicable to executive Directors, senior executives and non-executive Directors on an annual basis. Remuneration levels will be competitively set to attract the most qualified and experienced Directors and senior executives. Where necessary the Board will obtain independent advice on the appropriateness of remuneration packages.
Employee Share Options
The Board currently grants options to Directors and employees on a discretionary basis in terms of the Company’s Employee Share Option Plan. Options are granted both as an incentive and as recognition for performance.
Ethical Standards
The Board’s policy requires that Directors and management strive to achieve the highest ethical standard in conducting the Company’s business and also strive to enhance the performance and reputation of the Company. All Directors and Employees will be expected to act within the law and with integrity and objectivity in the interests of the Company, declaring at anytime any conflict of interest.
Financial Reporting
The Managing Director and Chief Financial Officer of the Company undertake upon the presentation of financial reports that to the best of their knowledge they represent a true and fair view and comply with the relevant accounting standards and ASX requirements. Annual financial statements are audited independently and half-yearly financial statements are subject to an independent review. Quarterly cash statements are filed with the Australian Securities Exchange in accordance with the Australian Securities Exchange Listing Rules and monthly management accounts are presented to all members of the Board of Directors.
Access to Company Information and Independent Professional Advice
All Directors of the Company are entitled to have access to information regarding the management of the Company. Each Director will, at the Company’s expense, have the right to seek independent professional advice in regard to any matters concerning the Company. However, prior approval by the Chairman will be required, which will not be unreasonably withheld.
Timely and Balanced Disclosure
As an exploration company, the Company adopts the policy of strict adherence to the ASX Listing Rules in respect of timely and continuous disclosure requirements for the purpose of keeping the market fully informed. Any announcements containing exploration results are only released with the approval of qualified personnel.
Trading in the Company’s Securities by Directors and Employees of the Company
The Company’s policy in relation to trading in the Company’s securities requires that prior to the placing of any intended order by any director or employee of the Company, confirmation should be sought from either the Managing Director or Company Secretary regarding any imminent Securities Exchange releases.
In the event of an imminent Securities Exchange release or in the event that the Company is awaiting confirmation of information to determine whether or not a release should be made, any employee or director of the Company intending to place an order to trade in the Company’s securities will be advised not to do so until any imminent or required release has been made.
These conditions will not apply to unfulfilled orders that were placed by directors or employees in acceptable circumstances.
Rights of Shareholders
The Company’s auditors will be available at the Company’s Annual General Meeting to answer any shareholder queries relating to the audit of the Company’s annual report. A full review of the Company’s operations will be presented following the Company’s Annual General Meeting. The Company’s website, www.mountburgess.com is regularly updated with all securities exchange announcements including its Annual and Quarterly Reports.
Business Risk
The Company recognises that there are inherent risks in being involved with exploration and operating in non-domicile countries. The Board monitors and if considered necessary seeks advice on areas of operational and financial risk and implements strategies for appropriate risk management arrangements.
Specific areas of risk initially identified and which will be regularly considered at Board Meetings include going concern, foreign currency and commodities price fluctuations, performance of activities, human resources, the environment, land access and political instability.
ASX Principles of Good Corporate Governance and Best Practice Recommendations
The Australian Securities Exchange has asked that companies comply with the Principles of Good Corporate Governance and Best Practice Recommendations of March 2003 or explain why they have not complied.
The Company does not currently comply with:
Recommendation 2.2: The Chairperson should be an independent director
Mr N R Forrester, as Chairman of the Company is also employed in an executive capacity by the Company and is therefore not considered to be independent. Because of other commitments of the independent directors of the Company, this position is currently being filled by a non-independent Director.
Recommendation 2.3: The roles of Chairperson and Chief Executive Officer should not be exercised by the same individual.
Mr N R Forrester is both Chairman and Managing Director of the Company. Because of other commitments of the independent directors of the Company the position of Chairman is currently being filled by a non-independent director.
Recommendation 2.4: The Board should establish a nomination committee.
Recommendation 4.2: The Board should establish an audit committee.
Recommendation 9.2: The Board should establish a remuneration committee.
The Company does not have a separate nomination committee, audit committee or remuneration committee. Because of the Company’s size and for commercial reasons, the full Board currently reviews appointments, financial reporting and remuneration packages.
Recommendation 9.3.2: Non executive directors should not receive options.
The Company grants options to all non-executive Directors in recognition of the significant time they contribute to the Company. The non-executive directors are often called upon to perform duties for the Company overseas or spend considerable time away from their earning base, to represent the Company. Their fees for these duties in no way cover what they could otherwise earn. The options granted are exercisable at a significant premium to the current share price.