88 ENERGY LIMITED ACN 072 964 179 (Company)
CORPORATE GOVERNANCE STATEMENT
FOR THE FINANCIAL YEAR ENDING 31 DECEMBER 2019
This Corporate Governance Statement is current as at 1 December 2019 and has been approved by the Board of the Company on that date.
This Corporate Governance Statement discloses the extent to which the Company has, during the financial year ending 31 December 2019, followed the recommendations set by the ASX Corporate Governance Council in its publication Corporate Governance Principles and Recommendations - 4th Edition (Recommendations). The Recommendations are not mandatory, however the Recommendations that have not been followed for any part of the reporting period have been identified and reasons provided for not following them along with what (if any) alternative governance practices were adopted in lieu of the recommendation during that period.
The Company has adopted a Corporate Governance Plan which provides the written terms of reference for the Company's corporate governance duties.
Due to the current size and nature of the existing Board and the magnitude of the Company's operations, the Board does not consider that the Company will gain any benefit from individual Board committees and that its resources would be better utilised in other areas as the Board is of the strong view that at this stage the experience and skill set of the current Board is sufficient to perform these roles. Under the Company's Board Charter, the duties that would ordinarily be assigned to individual committees are currently carried out by the full Board under the written terms of reference for those committees.
The Company's Corporate Governance Plan is available on the Company's website at www.88energy.com
RECOMMENDATIONS (4TH EDITION) | COMPLY | EXPLANATION | |||
Principle 1: Lay solid foundations for management and oversight | |||||
Recommendation 1.1 | The Company has adopted a Board Charter that sets out the specific | ||||
(a) | A listed entity should have and disclose a board charter | YES | roles and responsibilities of the Board, the Chair and management and | ||
which sets out the respective roles and responsibilities | includes a description of those matters expressly reserved to the Board | ||||
of the Board, the Chair and management, and includes | and those delegated to management. | ||||
a description of those matters expressly reserved to the | The Board Charter sets out the specific responsibilities of the Board, | ||||
Board and those delegated to management. | requirements as to the Board's composition, the roles and | ||||
responsibilities of the Chairman and Company Secretary, the | |||||
establishment, operation and management of Board Committees (if | |||||
any), Directors' access to Company records and information, details of | |||||
the Board's relationship with management, details of the Board's | |||||
performance review and details of the Board's disclosure policy. | |||||
/1310_2 | 1 |
RECOMMENDATIONS (4TH EDITION) | COMPLY | EXPLANATION | ||||||||
A copy of the Company's Board Charter, which is part of the Company's | ||||||||||
Corporate Governance Plan, is available on the Company's website. | ||||||||||
Recommendation 1.2 | (a) | The Company has guidelines for the appointment and selection | ||||||||
A listed entity should: | YES | of the Board and senior executives in its Corporate Governance | ||||||||
(a) | undertake appropriate checks before appointing a | Plan. The Company's Nomination Committee Charter (in the | ||||||||
Company's Corporate Governance Plan) requires the | ||||||||||
director or senior executive or putting someone forward | ||||||||||
Nomination Committee (or, in its absence, the Board) to ensure | ||||||||||
for election as a Director; and | ||||||||||
appropriate checks (including checks in respect of character, | ||||||||||
(b) | provide security holders with all material information in | |||||||||
experience, education, criminal record and bankruptcy history | ||||||||||
its possession relevant to a decision on whether or not | (as appropriate)) are undertaken before appointing a person, or | |||||||||
to elect or re-elect a Director. | putting forward to security holders a candidate for election, as a | |||||||||
Director. In the event of an unsatisfactory check, a Director is | ||||||||||
required to submit their resignation. | ||||||||||
(b) | Under the Nomination Committee Charter, all material | |||||||||
information relevant to a decision on whether or not to elect or | ||||||||||
re-elect a Director must be provided to security holders in the | ||||||||||
Notice of Meeting containing the resolution to elect or re-elect a | ||||||||||
Director. | ||||||||||
Recommendation 1.3 | The Company's Nomination Committee Charter requires the Nomination | |||||||||
A listed entity should have a written agreement with each Director | YES | Committee (or, in its absence, the Board) to ensure that each Director | ||||||||
and senior executive setting out the terms of their appointment. | and senior executive is personally a party to a written agreement with | |||||||||
the Company which sets out the terms of that Director's or senior | ||||||||||
executive's appointment. | ||||||||||
The Company has had written agreements with each of its Directors and | ||||||||||
senior executives for the past financial year. | ||||||||||
Recommendation 1.4 | The Board Charter outlines the roles, responsibility and accountability of | |||||||||
The Company Secretary of a listed entity should be accountable | YES | the | Company Secretary. In accordance with this, the Company | |||||||
Secretary is accountable directly to the Board, through the Chair, on all | ||||||||||
directly to the Board, through the Chair, on all matters to do with | ||||||||||
the proper functioning of the Board. | matters to do with the proper functioning of the Board. | |||||||||
Recommendation 1.5 | (a) | The Company has adopted a Diversity Policy which provides a | ||||||||
A listed entity should: | PARTIALLY | framework for the Company to establish, achieve and measure | ||||||||
(a) | have and disclose a diversity policy; | diversity objectives, including in respect of gender diversity. The | ||||||||
Diversity Policy is available, as part of the Corporate | ||||||||||
(b) | through its board or a committee of the board set | |||||||||
Governance Plan, on the Company's website. | ||||||||||
measurable objectives for achieving gender diversity in | ||||||||||
RECOMMENDATIONS (4TH EDITION) | COMPLY | EXPLANATION | ||||||||||||||||
the composition of its board, senior executives and | (b) | The Diversity Policy allows the Board to set measurable gender | ||||||||||||||||
workforce generally; and | diversity objectives, if considered appropriate, and to continually | |||||||||||||||||
(c) | disclose in relation to each reporting period: | monitor both the objectives [if any have been set and the | ||||||||||||||||
(i) | the measurable objectives set for that period to | Company's progress in achieving them. | ||||||||||||||||
(c) | The Board did not set measurable gender diversity objectives for | |||||||||||||||||
achieve gender diversity; | ||||||||||||||||||
(ii) | the entity's progress towards achieving those | the past financial year, because: | ||||||||||||||||
(i) | the Board did not anticipate there would be a need to | |||||||||||||||||
objectives; and | ||||||||||||||||||
appoint any new Directors or senior executives due to | ||||||||||||||||||
(iii) | either: | |||||||||||||||||
the limited nature of the Company's existing and | ||||||||||||||||||
(A) | the respective proportions of men | |||||||||||||||||
proposed activities and the Board's view that the existing | ||||||||||||||||||
and women on the Board, in senior | ||||||||||||||||||
Directors and senior executives have sufficient skill and | ||||||||||||||||||
executive positions and across the | experience to carry out the Company's plans; and | |||||||||||||||||
whole workforce (including how the | ||||||||||||||||||
entity has defined "senior executive" | (ii) | the respective proportions of men and women on the | ||||||||||||||||
for these purposes); or | ||||||||||||||||||
(B) | if the entity is a "relevant employer" | Board, | in senior | executive positions | and across the | |||||||||||||
whole organisation (including how the entity has defined | ||||||||||||||||||
under | the | Workplace | Gender | |||||||||||||||
"senior | executive" for these | purposes) for the past | ||||||||||||||||
Equality Act, the entity's most recent | ||||||||||||||||||
financial year is disclosed below. | ||||||||||||||||||
"Gender | Equality | Indicators", | as | |||||||||||||||
defined in the Workplace Gender | ||||||||||||||||||
Equality Act. | ||||||||||||||||||
If the | entity | was in | the S&P / ASX | 300 | Index | at | the | Women | Men | Total | % Female | |||||||
commencement of the reporting period, the measurable objective | ||||||||||||||||||
for achieving gender diversity in the composition of its board | Board of Directors | - | 3 | 3 | - | |||||||||||||
should be to have not less than 30% of its directors of each | Other KMP | - | 1 | 1 | - | |||||||||||||
gender within a specified period. | Other Employees | 1 | 2 | 3 | 33% | |||||||||||||
Total Organisation | 1 | 6 | 7 | 14% | ||||||||||||||
In addition, an executive office holding below the Board level, this being | ||||||||||||||||||
the position of Joint Company Secretary, is held by a female contractor | ||||||||||||||||||
to the Company. |
RECOMMENDATIONS (4TH EDITION) | COMPLY | EXPLANATION | ||||||||||||||||||
Recommendation 1.6 | (a) | The Company's Nomination Committee (or, in its absence, the | ||||||||||||||||||
A listed entity should: | YES | Board) is responsible for evaluating the performance of the | ||||||||||||||||||
Board, its committees (if any) and individual Directors on an | ||||||||||||||||||||
(a) | have and disclose a process for periodically evaluating | |||||||||||||||||||
annual basis. It may | do | so with | the | aid | of | an | independent | |||||||||||||
the performance of the | Board, its | committees | and | |||||||||||||||||
advisor. The process | for | this is | set | out | in | the | Company's | |||||||||||||
individual Directors; and | ||||||||||||||||||||
Corporate Governance Plan, which is available on the | ||||||||||||||||||||
(b) | disclose for each reporting period whether | a | ||||||||||||||||||
Company's website. | ||||||||||||||||||||
performance evaluation | has been | undertaken | in | (b) | The Company's Corporate Governance | Plan requires the | ||||||||||||||
accordance with that process during or in respect of that | ||||||||||||||||||||
Company to disclose whether or not performance evaluations | ||||||||||||||||||||
period. | ||||||||||||||||||||
were conducted during the relevant reporting period. The Board | ||||||||||||||||||||
has developed an informal process for performance evaluation | ||||||||||||||||||||
whereby the performance of all directors is reviewed regularly by | ||||||||||||||||||||
the Chair and Managing Director. The Board as a whole may | ||||||||||||||||||||
then hold a facilitated discussion during which each Board | ||||||||||||||||||||
member has the opportunity to raise any matter, suggestion for | ||||||||||||||||||||
improvement or criticism with the Board as a whole. The Chair | ||||||||||||||||||||
and/or the Managing Director of the Board may also meet | ||||||||||||||||||||
individually with each Board member to discuss their | ||||||||||||||||||||
performance. Non-executive directors may also meet to discuss | ||||||||||||||||||||
the performance of the Chair or the Managing Director. Directors | ||||||||||||||||||||
whose performance is consistently unsatisfactory may be asked | ||||||||||||||||||||
to retire. | ||||||||||||||||||||
The Company has completed performance evaluations in | ||||||||||||||||||||
respect of the Board, its committees (if any) and individual | ||||||||||||||||||||
Directors for the past financial year in accordance with the above | ||||||||||||||||||||
process. Going forward, it is the Company's intention that all | ||||||||||||||||||||
directors will continue to receive individual performance | ||||||||||||||||||||
evaluations at least annually. The Company has completed | ||||||||||||||||||||
performance evaluations in respect of the Board, its committees | ||||||||||||||||||||
(if any) and individual Directors for the past financial year in | ||||||||||||||||||||
accordance with the above process. |
RECOMMENDATIONS (4TH EDITION) | COMPLY | EXPLANATION | ||||||||||
Recommendation 1.7 | (a) | The Company's Nomination Committee (or, in its absence, the | ||||||||||
A listed entity should: | YES | Board) is responsible for evaluating the performance of the | ||||||||||
(a) | have and disclose a process for evaluating the | Company's senior executives on | an | annual basis. | The | |||||||
Company's Remuneration Committee (or, in its absence, the | ||||||||||||
performance of its senior executives at least once every | ||||||||||||
Board) is responsible for evaluating | the | remuneration of | the | |||||||||
reporting period; and | ||||||||||||
Company's senior executives on an annual basis. A senior | ||||||||||||
(b) | disclose for each reporting period whether a | |||||||||||
executive, for these purposes, means key management | ||||||||||||
performance evaluation has been undertaken in | ||||||||||||
personnel (as defined in the Corporations Act) other than a non- | ||||||||||||
accordance with that process during or in respect of that | executive Director. | |||||||||||
period. | The applicable processes for these evaluations can be found in | |||||||||||
the Company's Corporate Governance Plan, which is available | ||||||||||||
on the Company's website. |
(b) The Company has developed an informal process of performance evaluation whereby an assessment of progress is carried out throughout the year. The Board as a whole may then hold a facilitated discussion during which each Board member has the opportunity to raise any matter, suggestion for improvement or criticism with the Board as a whole. The Chair of the Board may also meet individually with Executive Directors, in this case the Managing Director to discuss their performance. Executive Directors whose performance is consistently unsatisfactory may be asked to retire. The Company has completed an informal performance evaluation in respect of the senior executives (being the Managing Director) for the past financial year in accordance with the applicable processes.
Principle 2: Structure the Board to be effective and add value
Recommendation 2.1 | (a) | The Company's Nomination Committee Charter provides for the | ||||||||
The Board of a listed entity should: | PARTIALLY | creation of a Nomination Committee (if it is considered it will | ||||||||
benefit the Company), with at least three members, a majority of | ||||||||||
(a) | have a nomination committee which: | |||||||||
whom are independent Directors, and which must be chaired by | ||||||||||
(i) | has at least three members, a majority of | |||||||||
an independent Director | ||||||||||
whom are independent Directors; and | ||||||||||
(ii) | is chaired by an independent Director, | |||||||||
and disclose: | ||||||||||
(iii) | the charter of the committee; | |||||||||
(iv) | the members of the committee; and | |||||||||
RECOMMENDATIONS (4TH EDITION) | COMPLY | EXPLANATION | |||||||
(v) | as at the end of each reporting period, the | (b) | The Company did not have a Nomination Committee for the past | ||||||
number of times the committee met throughout | financial year as the Board did not consider the Company would | ||||||||
the period and the individual attendances of | benefit from its establishment. In accordance with the | ||||||||
the members at those meetings; or | Company's Board Charter, the Board carries out the duties that | ||||||||
(b) | if it does not have a nomination committee, disclose that | would ordinarily be carried out by the Nomination Committee | |||||||
under the Nomination Committee Charter, including the | |||||||||
fact and the processes it employs to address Board | |||||||||
following processes to address succession issues and to ensure | |||||||||
succession issues and to ensure that the Board has the | |||||||||
appropriate balance of skills, knowledge, experience, | the Board has the appropriate balance of skills, experience, | ||||||||
independence and knowledge of the entity to enable it to | |||||||||
independence and diversity to enable it to discharge its | |||||||||
discharge its duties and responsibilities effectively: | |||||||||
duties and responsibilities effectively. | |||||||||
(i) | devoting time at least annually to discuss Board | ||||||||
succession issues; and | |||||||||
(ii) | all Board members being involved in the Company's | ||||||||
nomination process, to the maximum extent permitted | |||||||||
under the Corporations Act and ASX Listing Rules. | |||||||||
The Board oversees the appointment and induction process for | |||||||||
directors and the selection, appointment and | |||||||||
succession planning process of the Company's Managing | |||||||||
Director. When a vacancy exists or there is a need | |||||||||
for a particular skill, the Board, determines the selection criteria | |||||||||
that will be applied. The Board will then identify | |||||||||
suitable candidates, with assistance from an external consultant | |||||||||
if required, and will interview and assess the | |||||||||
selected candidates. Directors are initially appointed by the | |||||||||
Board and must stand for re-election at the Company's next | |||||||||
Annual General Meeting of shareholders. Directors must then | |||||||||
retire from office and nominate for re-election at least once every | |||||||||
three years with the exception of the Managing Director. | |||||||||
Recommendation 2.2 | Under the Nomination Committee Charter (in the Company's Corporate | ||||||||
A listed entity should have and disclose a Board skills matrix | NO | Governance Plan), the Nomination Committee (or, in its absence, the | |||||||
setting out the mix of skills that the Board currently has or is | Board) is required to prepare a Board skills matrix setting out the mix of | ||||||||
looking to achieve in its membership. | skills that the Board currently has (or is looking to achieve) and to review | ||||||||
this at least annually against the Company's Board skills matrix to ensure | |||||||||
the appropriate mix of skills to discharge its obligations effectively and to | |||||||||
add value and to ensure the Board has the ability to deal with new and | |||||||||
emerging business and governance issues. |
RECOMMENDATIONS (4TH EDITION) | COMPLY | EXPLANATION |
Given the current size and stage of development of the Company the | ||
Board has not yet established a formal board skills matrix. Gaps in the | ||
collective skills of the Board are regularly reviewed by the Board as a | ||
whole, with the Board proposing candidates for directorships having | ||
regard to the desired skills and experience required by the Company as | ||
well as the proposed candidates' diversity of background. | ||
The Board Charter requires the disclosure of each Board member's | ||
qualifications and expertise. Full details as to each Director and senior | ||
executive's relevant skills and experience are available in the | ||
Company's Annual Report. |
RECOMMENDATIONS (4TH EDITION) | COMPLY | EXPLANATION | ||||||
Recommendation 2.3 | (a) | The Board Charter requires the disclosure of the names of | ||||||
A listed entity should disclose: | YES | Directors considered by the Board to be independent. The | ||||||
(a) | the names of the Directors considered by the Board to | Company has disclosed those Directors it considered to be | ||||||
independent in its Annual Report. The current Board composition | ||||||||
be independent Directors; | ||||||||
includes 2 Non-Executive Directors (both of who are considered | ||||||||
(b) | if a Director has an interest, position or relationship of | |||||||
to be independent), Mr Stephen Staley and Mr Michal Evans. | ||||||||
the type described in Box 2.3 of the ASX Corporate | The Board has considered the guidance to Principle 2 and in | |||||||
Governance Principles and Recommendations (4th | particular the relationships affecting independent status. In its | |||||||
Edition), but the Board is of the opinion that it does not | assessment of independence, the Board considers all relevant | |||||||
compromise the independence of the Director, the | facts and circumstances. Relationships that the Board will take | |||||||
nature of the interest, position or relationship in question | ||||||||
into consideration when evaluating independence are whether a | ||||||||
and an explanation of why the Board is of that opinion; | Director: | |||||||
and | • is a substantial shareholder of the Company or an officer of, or | |||||||
(c) | the length of service of each Director | |||||||
otherwise associated directly with, a substantial shareholder of | ||||||||
the Company; | ||||||||
• is employed, or has previously been employed in an executive | ||||||||
capacity by the Company or another Company member, and | ||||||||
there has not been a period of at least three years between | ||||||||
ceasing such employment and serving on the Board; | ||||||||
• has within the last three years been a principal of a material | ||||||||
professional advisor or a material consultant to the Company or | ||||||||
another Company member, or an employee materially | ||||||||
associated with the service provided; | ||||||||
• is a material supplier or customer of the Company or other | ||||||||
Company member, or an officer of or otherwise associated | ||||||||
directly or indirectly with a material supplier or customer; or | ||||||||
• has a material contractual relationship with the Company or | ||||||||
another Company member other than as a Director. | ||||||||
(b) | There are no independent Directors who fall into this category; | |||||||
(c) | The Company's Annual Report discloses the length of service of | |||||||
each Director, as at the end of each financial year. | ||||||||
Recommendation 2.4 | The Company's Board Charter requires that, where practical, the | |||||||
A majority of the Board of a listed entity should be independent | YES | majority of the Board should be independent. The Board currently | ||||||
Directors. | comprises a total of 3 directors, of whom 2 are considered to be | |||||||
independent. As such, independent directors currently comprise the | ||||||||
majority of the Board. | ||||||||
RECOMMENDATIONS (4TH EDITION) | COMPLY | EXPLANATION | ||||||||
Recommendation 2.5 | The Board Charter provides that, where practical, the Chair of the Board | |||||||||
The Chair of the Board of a listed entity should be an independent | YES | should be an independent Director and should not be the CEO/Managing | ||||||||
Director and, in particular, should not be the same person as the | Director. | |||||||||
CEO of the entity. | The Chair of the Company during the past financial year, Mr Michael | |||||||||
Evans is an independent Director and is not the CEO/Managing Director. | ||||||||||
Recommendation 2.6 | In accordance with the Company's Board Charter, the Nominations | |||||||||
A listed entity should have a program for inducting new Directors | YES | Committee (or, in its absence, the Board) is responsible for the approval | ||||||||
and for periodically reviewing whether there is a need for existing | and review of induction and continuing professional development | |||||||||
programs and procedures for Directors to ensure that they can | ||||||||||
directors to undertake professional development to maintain the | ||||||||||
effectively discharge their responsibilities. The Company Secretary is | ||||||||||
skills and knowledge needed to perform their role as Directors | ||||||||||
responsible for facilitating inductions and professional development | ||||||||||
effectively. | ||||||||||
including receiving briefings on material developments in laws, | ||||||||||
regulations and accounting standards relevant to the Company. | ||||||||||
Principle 3: Instil a culture of acting lawfully, ethically and responsibly | ||||||||||
Recommendation 3.1 | (a) | The Company and its subsidiary companies (if any) are | ||||||||
A listed entity should articulate and disclose its values. | YES | committed to conducting all of its business activities fairly, | ||||||||
honestly with a high level of integrity, and in compliance with all | ||||||||||
applicable laws, rules and regulations. The Board, management | ||||||||||
and employees are dedicated to high ethical standards and | ||||||||||
recognise and support the Company's commitment to | ||||||||||
compliance with these standards. | ||||||||||
(b) | The Company's values are set out in its Code of Conduct (which | |||||||||
forms part of the Corporate Governance Plan) and are available | ||||||||||
on the Company's website. All employees are given appropriate | ||||||||||
training on the Company's values and senior executives will | ||||||||||
continually reference such values. | ||||||||||
Recommendation 3.2 | YES | (a) | The Company's Corporate Code of Conduct applies to the | |||||||
A listed entity should: | Company's Directors, senior executives and employees. | |||||||||
(a) | have and disclose a code of conduct for its Directors, | (b) | The Company's Corporate Code of Conduct (which forms part | |||||||
senior executives and employees; and | of the Company's Corporate Governance Plan) is available on | |||||||||
(b) | ensure that the Board or a committee of the Board is | the Company's website. Any material breaches of the Code of | ||||||||
Conduct are reported to the Board or a committee of the Board. | ||||||||||
informed of any material breaches of that code. | ||||||||||
Recommendation 3.3 | YES | The Company's Whistleblower Protection Policy (which forms part of the | ||||||||
Corporate Governance Plan) is available on the Company's website. |
RECOMMENDATIONS (4TH EDITION) | COMPLY | EXPLANATION | |||||||
A listed entity should: | Any material breaches of the Whistleblower Protection Policy are to be | ||||||||
(a) | have and disclose a whistleblower policy; and | reported to the Board. | |||||||
(a) | ensure that the Board or a committee of the Board is | ||||||||
informed of any material incidents reported under that | |||||||||
policy. | |||||||||
Recommendation 3.4 | YES | ||||||||
A listed entity should: | The Company's Anti-Bribery and Anti-Corruption Policy (which forms | ||||||||
(a) | have and disclose an anti-bribery and corruption policy; | part of the Corporate Governance Plan) is available on the Company's | |||||||
and | website. Any material breaches of the Anti-Bribery and Anti-Corruption | ||||||||
(b) | ensure that the Board or committee of the Board is | Policy are to be reported to the Board. | |||||||
informed of any material breaches of that policy. | |||||||||
Principle 4: Safeguard the integrity of corporate reports | |||||||||
Recommendation 4.1 | (a) | The Company's Corporate Governance Plan contains an Audit | |||||||
The Board of a listed entity should: | PARTIALLY | and Risk Committee Charter that provides for the creation of an | |||||||
(a) | have an audit committee which: | Audit and Risk Committee with at least three members, all of | |||||||
whom must be non-executive Directors, and majority of the | |||||||||
(i) | has at least three members, all of whom are | ||||||||
Committee must be independent Directors. The Committee must | |||||||||
non-executive Directors and a majority of | be chaired by an independent Director who is not the Chair. | ||||||||
whom are independent Directors; and | |||||||||
(ii) | is chaired by an independent Director, who is | The Company did not have an Audit and Risk Committee for the | |||||||
not the Chair of the Board, | |||||||||
past financial year as the Directors do not view that the size of | |||||||||
and disclose: | |||||||||
the Company warrants a separate Audit Committee. | |||||||||
(iii) | the charter of the committee; | In accordance with the Company's Board Charter, the Board | |||||||
(iv) | the relevant qualifications and experience of | carries out the duties that would ordinarily be carried out by the | |||||||
the members of the committee; and | Audit and Risk Committee under the Audit and Risk Committee | ||||||||
(v) | in relation to each reporting period, the number | Charter including the following processes to independently verify | |||||||
of times the committee met throughout the | the integrity of the Company's periodic reports which are not | ||||||||
audited or reviewed by an external auditor, as well as the | |||||||||
period and the individual attendances of the | |||||||||
members at those meetings; or | processes for the appointment and removal of the external | ||||||||
auditor and the rotation of the audit engagement partner: | |||||||||
(b) | if it does not have an audit committee, disclose that fact | ||||||||
(i) | the Board devotes time at annual Board meetings to | ||||||||
and the processes it employs that independently verify | |||||||||
fulfilling the roles and responsibilities associated with | |||||||||
and safeguard the integrity of its corporate reporting, | |||||||||
maintaining the Company's internal audit function and | |||||||||
including the processes for the appointment and | |||||||||
arrangements with external auditors; and | |||||||||
removal of the external auditor and the rotation of the | |||||||||
audit engagement partner. |
RECOMMENDATIONS (4TH EDITION) | COMPLY | EXPLANATION | |||||||
(ii) | all members of the Board are involved in the Company's | ||||||||
audit function to ensure the proper maintenance of the | |||||||||
entity and the integrity of all financial reporting. | |||||||||
The Board is of the view that the experience and professionalism | |||||||||
of the persons on the Board is sufficient to ensure that all | |||||||||
significant matters are appropriately addressed and actioned. | |||||||||
Further, the Board does not consider that the Company is of | |||||||||
sufficient size to justify the appointment of additional directors for | |||||||||
the sole purpose of satisfying this recommendation as it would | |||||||||
be cost prohibitive and counterproductive. | |||||||||
Recommendation 4.2 | The Company's Audit and Risk Committee Charter requires the | ||||||||
The Board of a listed entity should, before it approves the entity's | YES | Managing Director and CFO (or, if none, the person(s) fulfilling those | |||||||
functions) to provide a sign off on these terms. | |||||||||
financial statements for a financial period, receive from its CEO | |||||||||
and CFO a declaration that the financial records of the entity have | The Company has obtained a sign off on these terms for each of its | ||||||||
been properly maintained and that the financial statements | financial statements in the past financial year. | ||||||||
comply with the appropriate accounting standards and give a true | |||||||||
and fair view of the financial position and performance of the | |||||||||
entity and that the opinion has been formed on the basis of a | |||||||||
sound system of risk management and internal control which is | |||||||||
operating effectively. | |||||||||
Recommendation 4.3 | The Company ensures that the corporate reports it releases are | ||||||||
A listed entity should disclose its process to verify the integrity of | YES | reviewed by Management and provided to the Board to ensure the | |||||||
financial and technical content is accurate, balanced and | |||||||||
any periodic corporate report it releases to the market that is not | |||||||||
understandable. Where appropriate, information contained in corporate | |||||||||
audited or reviewed by an external auditor. | |||||||||
reports is referenced to supporting documents and sources. | |||||||||
Further, in accordance with Section 295A of the Corporations Act 2001 | |||||||||
and Recommendation 4.2 of the ASX Corporate Governance Principles | |||||||||
and Recommendations, the Managing Director and CFO make | |||||||||
declarations to the Board that the Company's financial records have | |||||||||
been properly maintained in accordance with the Act and that the | |||||||||
financial statements comply with accounting standards and give a true | |||||||||
and fair view of the financial position and performance of the Company | |||||||||
and that the above statement is founded on a sound system of risk | |||||||||
management and internal control and that the systems which are | |||||||||
operating effectively in all material respects in relation to financial | |||||||||
reporting risks. | |||||||||
RECOMMENDATIONS (4TH EDITION) | COMPLY | EXPLANATION | |||||||
Principle 5: Make timely and balanced disclosure | |||||||||
Recommendation 5.1 | (a) | The Company's Corporate Governance Plan details the | |||||||
A listed entity should have and disclose a written policy for | YES | Company's Continuous Disclosure policy. | |||||||
complying with its continuous disclosure obligations under listing | (b) | The Corporate Governance Plan, which incorporates the | |||||||
rule 3.1. | Continuous Disclosure policy, is available on the Company's | ||||||||
website. | |||||||||
Recommendation 5.2 | YES | Under the Company's Continuous Disclosure Policy (which forms part of | |||||||
A listed entity should ensure that its board receives copies of all | the Corporate Governance Plan), all members of the Board receive | ||||||||
material market announcements promptly after they have been made. | |||||||||
material market announcements promptly after they have been | |||||||||
made. | |||||||||
Recommendation 5.3 | YES | All substantive investor or analyst presentations were released on the | |||||||
A listed entity that gives a new and substantive investor or analyst | ASX Markets Announcement Platform ahead of such presentations. | ||||||||
presentation should release a copy of the presentation materials | |||||||||
on the ASX Market Announcements Platform ahead of the | |||||||||
presentation. | |||||||||
Principle 6: Respect the rights of security holders | |||||||||
Recommendation 6.1 | Information about the Company and its governance is available in the | ||||||||
A listed entity should provide information about itself and its | YES | Corporate Governance Plan which can be found on the Company's | |||||||
website. | |||||||||
governance to investors via its website. | |||||||||
Recommendation 6.2 | The Company has adopted a Shareholder Communications Strategy | ||||||||
A listed entity should have an investor relations program that | YES | which aims to promote and facilitate effective two-way communication | |||||||
facilitates effective two-way communication with investors. | with investors. The Strategy outlines a range of ways in which | ||||||||
information is communicated to shareholders and is available on the | |||||||||
Company's website as part of the Company's Corporate Governance | |||||||||
Plan. | |||||||||
Recommendation 6.3 | The Company's Security Holder Communication Policy addresses | ||||||||
A listed entity should disclose how it facilitates and encourages | YES | security holder attendance at Security Holder Meetings. | |||||||
participation at meetings of security holders. | Shareholders are encouraged to participate at all general meetings and | ||||||||
AGMs of the Company and provides Shareholders with the opportunity | |||||||||
to participate in shareholder meetings by allowing voting in person, by | |||||||||
proxy or online. |
RECOMMENDATIONS (4TH EDITION) | COMPLY | EXPLANATION | ||||
Recommendation 6.4 | All resolutions at securityholder meetings were decided by a show of | |||||
A listed entity should ensure that all substantive resolutions at a | NO | hands because it was not practical to conduct a poll based on the | ||||
meeting of security holders are decided by a poll rather than by a | number of shareholders attending and the proxies received i.e. the | |||||
Company determined that conducting a poll would not change the | ||||||
show of hands. | ||||||
outcome of the resolution given the proxies were overwhelmingly in | ||||||
favour of the resolutions. | ||||||
Going forward, it is the intention for all substantive resolutions at | ||||||
securityholder meetings to be decided by a poll rather than a show of | ||||||
hands if the proxies received "for" and "against" a resolution are close. | ||||||
Recommendation 6.5 | YES | The Company encourages the use of electronic communication and | ||||
A listed entity should give security holders the option to receive | offers Security Holders the option to receive and send electronic | |||||
communication to the Company and its share registry where possible. | ||||||
communications from, and send communications to, the entity | ||||||
and its security registry electronically. | The Shareholder Communication Strategy provides that security holders | |||||
can register with the Company to receive email notifications when an | ||||||
announcement is made by the Company to the ASX, including the | ||||||
release of the Annual Report, half yearly reports and quarterly reports. | ||||||
Links are made available to the Company's website on which all | ||||||
information provided to the ASX is immediately posted. | ||||||
Shareholders queries should be referred to the Company Secretary at | ||||||
first instance. | ||||||
Principle 7: Recognise and manage risk | ||||||
RECOMMENDATIONS (4TH EDITION) | COMPLY | EXPLANATION | |||||||
Recommendation 7.1 | (a) | The Company did not have an Audit and Risk Committee for the | |||||||
The Board of a listed entity should: | PARTIALLY | past financial year as the Directors do not view that the size of | |||||||
(a) | have a committee or committees to oversee risk, each | the Company warrants a separate Risk Committee. All matters | |||||||
that might properly be dealt with by the Risk Committee are dealt | |||||||||
of which: | |||||||||
with by the full Board. The Company's Corporate Governance | |||||||||
(i) | has at least three members, a majority of | ||||||||
Plan contains an Audit and Risk Committee Charter that | |||||||||
whom are independent Directors; and | |||||||||
provides for the creation of an Audit and Risk Committee (if | |||||||||
(ii) | is chaired by an independent Director, | deemed appropriate in the future) with at least three members, | |||||||
and disclose: | all of whom must be non-executive Directors, and majority of the | ||||||||
(iii) | the charter of the committee; | Committee must be independent Directors. The Committee must | |||||||
be chaired by an independent Director who is not the Chair. | |||||||||
(iv) | the members of the committee; and | ||||||||
(b) | The Company did not have an Audit and Risk Committee for the | ||||||||
(v) | as at the end of each reporting period, the | ||||||||
past financial year. The Board is of the view that the experience | |||||||||
number of times the committee met throughout | |||||||||
and professionalism of the persons on the Board is sufficient to | |||||||||
the period and the individual attendances of | ensure that all significant matters are appropriately addressed | ||||||||
the members at those meetings; or | and actioned. Further, the Board does not consider that the | ||||||||
(b) | if it does not have a risk committee or committees that | Company is of sufficient size to justify the appointment of | |||||||
satisfy (a) above, disclose that fact and the process it | additional directors for the sole purpose of satisfying this | ||||||||
employs for overseeing the entity's risk management | recommendation as it would be cost prohibitive and | ||||||||
framework. | counterproductive. The Board is responsible for overseeing the | ||||||||
establishment and implementation of effective risk management | |||||||||
and internal control systems to manage the Company's material | |||||||||
business risks and for reviewing and monitoring the Company's | |||||||||
application of those systems. Major risk categories reported | |||||||||
include operational risk, environmental risk, sustainability, | |||||||||
statutory reporting and compliance, financial risks (including | |||||||||
financial reporting, treasury, information technology and | |||||||||
taxation), and market related risks. | |||||||||
RECOMMENDATIONS (4TH EDITION) | COMPLY | EXPLANATION | ||||||||||
Recommendation 7.2 | (a) | The Audit and Risk Committee Charter requires that the Audit | ||||||||||
The Board or a committee of the Board should: | YES | and Risk Committee (or, in its absence, the Board) should, at | ||||||||||
(a) | review the entity's risk management framework at least | least annually, satisfy itself that the Company's risk management | ||||||||||
framework continues to be sound and that the Company is | ||||||||||||
annually to satisfy itself that it continues to be sound and | ||||||||||||
operating with due regard to the risk appetite set by the Board. | ||||||||||||
that the entity is operating with due regard to the risk | ||||||||||||
The Board | is responsible for | reviewing | the Company's | risk | ||||||||
appetite set by the Board; and | ||||||||||||
management framework and overseeing the establishment and | ||||||||||||
(b) | disclose in relation to each reporting period, whether | |||||||||||
implementation of effective risk management and internal control | ||||||||||||
such a review has taken place. | systems to manage the Company's material business risks and | |||||||||||
for reviewing and monitoring the Company's application of those | ||||||||||||
systems. The Board devotes time at quarterly Board meetings to | ||||||||||||
fulfilling the roles and responsibilities associated with overseeing | ||||||||||||
risk and maintaining the entity's risk management framework | ||||||||||||
and associated internal compliance and control procedures. | ||||||||||||
(b) | Risk framework reviews may occur more or less frequently than | |||||||||||
annually as necessitated by changes in the Company and its | ||||||||||||
operating environment. Given the operations of the Company | ||||||||||||
have not materially changed over the past 12 month period, a | ||||||||||||
risk framework review has not taken place during the transitional | ||||||||||||
financial year ended 31 December 2019. | ||||||||||||
Recommendation 7.3 | (a) | The Audit and Risk Committee Charter provides for the Audit and | ||||||||||
A listed entity should disclose: | YES | Risk Committee (and in its absence, the Board) to monitor and | ||||||||||
(a) | if it has an internal audit function, how the function is | periodically review the need for an internal audit function, as well | ||||||||||
as assessing the performance and objectivity of any internal | ||||||||||||
structured and what role it performs; or | ||||||||||||
audit procedures that may be in place. | ||||||||||||
(b) | if it does not have an internal audit function, that fact and | |||||||||||
(b) | The Company did not have an internal audit function for the past | |||||||||||
the processes it employs for evaluating and continually | ||||||||||||
financial year. As set out in Recommendation 7.1, the Board is | ||||||||||||
improving the effectiveness of its governance, risk | ||||||||||||
responsible | for overseeing | the | establishment | and | ||||||||
management and internal control processes. | ||||||||||||
implementation of effective risk management and internal control | ||||||||||||
systems to manage the Company's material business risks and | ||||||||||||
for reviewing and monitoring the Company's application of those | ||||||||||||
systems. | ||||||||||||
Recommendation 7.4 | The Audit and Risk Committee Charter requires the Audit and Risk | |||||||||||
A listed | entity should disclose whether it has any material | YES | Committee (or, in its absence, the Board) to assist management to | |||||||||
exposure to environmental or social risks and, if it does, how it | determine whether the Company has any potential or apparent exposure | |||||||||||
manages or intends to manage those risks. | to environmental or social risks and, if it does, put in place management | |||||||||||
systems, practices and procedures to manage those risks. |
RECOMMENDATIONS (4TH EDITION) | COMPLY | EXPLANATION | |||||||
The Company's Corporate Governance Plan requires the Company to | |||||||||
disclose whether it has any potential or apparent exposure to | |||||||||
environmental or social risks and, if it does, put in place management | |||||||||
systems, practices and procedures to manage those risk. | |||||||||
Where the Company does not have material exposure to environmental | |||||||||
or social risks, report the basis for that determination to the Board, and | |||||||||
where appropriate benchmark the Company's environmental or social | |||||||||
risk profile against its peers. | |||||||||
The Company discloses this information in its Annual Report. | |||||||||
Principle 8: Remunerate fairly and responsibly | |||||||||
Recommendation 8.1 | (a) | The Company did noT have a Remuneration Committee for the | |||||||
The Board of a listed entity should: | PARTIALLY | past financial year. The Company's Corporate Governance Plan | |||||||
(a) | have a remuneration committee which: | contains a Remuneration Committee Charter that provides for | |||||||
the creation of a Remuneration Committee (if it is considered it | |||||||||
(i) | has at least three members, a majority of | ||||||||
will benefit the Company), with at least three members, a | |||||||||
whom are independent Directors; and | |||||||||
majority of whom are be independent Directors, and which must | |||||||||
(ii) | is chaired by an independent Director, | be chaired by an independent Director. | |||||||
and disclose: | (b) | The Company did not have a Remuneration Committee for the | |||||||
(iii) | the charter of the committee; | past financial year as the Board did not consider the Company | |||||||
(iv) | the members of the committee; and | would benefit from its establishment, and does not currently have | |||||||
one. In accordance with the Company's Board Charter, the | |||||||||
(v) | as at the end of each reporting period, the | ||||||||
Board carries out the duties that would ordinarily be carried out | |||||||||
number of times the committee met throughout | |||||||||
by the Remuneration Committee under the Remuneration | |||||||||
the period and the individual attendances of | Committee Charter including the following processes to set the | ||||||||
the members at those meetings; or | level and composition of remuneration for Directors and senior | ||||||||
(b) | if it does not have a remuneration committee, disclose | executives and ensuring that such remuneration is appropriate | |||||||
that fact and the processes it employs for setting the | and not excessive: | ||||||||
level and composition of remuneration for Directors and | (i) | the Board devotes time at an annual Board meeting to | |||||||
senior executives and ensuring that such remuneration | assess the level and composition of remuneration for | ||||||||
is appropriate and not excessive. | Directors and senior executives; and | ||||||||
(ii) | periodically benchmarks the Company's remuneration | ||||||||
against its peers. | |||||||||
RECOMMENDATIONS (4TH EDITION) | COMPLY | EXPLANATION | |||||||||||
Recommendation 8.2 | The Company's Corporate Governance Plan requires the Board to | ||||||||||||
A listed entity should separately disclose its policies and practices | YES | disclose its policies and practices regarding the remuneration of | |||||||||||
Directors and senior executives, which is disclosed in the remuneration | |||||||||||||
regarding the remuneration of non-executive Directors and the | |||||||||||||
remuneration of executive Directors and other senior executives. | report contained in the Company's Annual Report. | ||||||||||||
Recommendation 8.3 | (a) | The Company had an equity-based remuneration scheme during | |||||||||||
A listed entity which has an equity-based remuneration scheme | YES | the past financial year. The Company has adopted an Incentive | |||||||||||
should: | Option Scheme whereby options are issued to eligible | ||||||||||||
(a) | have a policy on whether participants are permitted to | participants | including | Directors and | Key Management | ||||||||
Personnel. A | summary | of the Incentive | Option Scheme is | ||||||||||
enter into transactions (whether through the use of | |||||||||||||
disclosed in the Notice of Meeting lodged with ASX on 16 March | |||||||||||||
derivatives or otherwise) which limit the economic risk | |||||||||||||
2018. The objective of the Scheme is to attract, motivate and | |||||||||||||
of participating in the scheme; and | |||||||||||||
retain key Directors, employees and contractors and it is | |||||||||||||
(b) | disclose that policy or a summary of it. | ||||||||||||
considered by the Company that the adoption of the Scheme and | |||||||||||||
the future issue of Options under the Scheme provides selected | |||||||||||||
participants with the opportunity to participate in the future | |||||||||||||
growth of the Company. In addition, the Company has adopted | |||||||||||||
a Performance Rights Plan (PRP) whereby Performance Rights | |||||||||||||
during the financial year. The objective of the PRP is to provide | |||||||||||||
the Company with a remuneration mechanism, through the issue | |||||||||||||
of securities in the capital of the Company, to motivate and | |||||||||||||
reward the performance of the Directors and employees in | |||||||||||||
achieving specified performance milestones within a specified | |||||||||||||
performance period. A summary of the PRP is disclosed in the | |||||||||||||
Notice of Meeting lodged with ASX on 13 September 2018. | |||||||||||||
The Company did have a policy on whether participants are | |||||||||||||
permitted to enter into transactions (whether through the use of | |||||||||||||
derivatives or otherwise) which limit the economic risk of | |||||||||||||
participating in the equity schemes outlined above. The | |||||||||||||
Company's Remuneration Committee Charter states that, the | |||||||||||||
Remuneration Committee, (or in the absence of one, the Board) | |||||||||||||
is required to review, manage and disclose the policy (if any) on | |||||||||||||
whether participants are permitted to enter into transactions | |||||||||||||
(whether through the use of derivatives or otherwise) which limit | |||||||||||||
the economic risk of participating in the scheme. The | |||||||||||||
Remuneration Committee Charter also states that the | |||||||||||||
Remuneration Committee (and in its absence, the Board) must | |||||||||||||
review and approve any equity-based plans. | |||||||||||||
RECOMMENDATIONS (4TH EDITION) | COMPLY | EXPLANATION | |
(b) | A copy of the Remuneration Committee Charter is contained in | ||
the Corporate Governacne Policies provided on the Company's | |||
website. | |||
Recommendation 9.1 | |||
A listed entity with a director who does not speak the language in | Not applicable | ||
which board or security holder meetings are held or key corporate | |||
documents are written should disclose the processes it has in | |||
place to ensure the director understands and can contribute to | |||
the discussions at those meetings and understands and can | |||
discharge their obligations in relation to those documents. | |||
Recommendation 9.2 | Not applicable | ||
A listed entity established outside Australia should ensure that | |||
meetings of security holders are held at a reasonable place and | |||
time. | |||
Recommendation 9.3 | Not applicable | ||
A listed entity established outside Australia, and an externally | |||
managed listed entity that has an AGM, should ensure that its | |||
external auditor attends its AGM and is available to answer | |||
questions from security holders relevant to the audit. |
Attachments
- Original document
- Permalink
Disclaimer
88 Energy Limited published this content on 26 February 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 February 2020 04:52:05 UTC