spacer

Corporate Governance

Principles of Corporate Governance

ETT is committed to Corporate Governance Principles as outlined.

 

The Australian Stock Exchange Ltd (ASX) has published 10 essential corporate governance principles and best practice recommendations. Under ASX listing rules, listed companies are required to provide a statement in their annual reports disclosing the extent to which they have followed these best practice guidelines. In the following, the ASX principles and guidelines are listed together with the company’s response.

Principle No.

ASX Principle

 Company’s position

1.0

Lay Solid Foundations for management and oversight

1.1 Establish the functions reserved to the Board and those delegated to management.

1.2 Processes for evaluation of performance of senior executives.

1.3 Reporting Results

The Board has clear policies and processes to delineate the respective functions, roles and responsibilities of the Board and Management.
At the time of appointment of Board members and senior management personnel, the various delegations, functions and duties are clearly defined. An ongoing regular review process ensures each participant operates within the defined parameters. 
Senior executive performance is the subject of assessment by regular evaluation by the Board based on key performance indicators and peer review. Independent directors undertake separate independent review processes. The Board receives monthly reports of performance and assessment. Annual Appointment Reviews conducted by Board Committee.
Performance reviews of the CEO and General Managers conducted in May 2008. The board acted on the conclusions from those reviews and based on the circumstances of the group at that time.

2.0

Structure the Board to add value based on composition, size and commitment to discharge responsibilities and duties.

2.1 Majority of the Board should be independent.

2.2 Independent Chair.

The Board has undertaken a number of changes in 2007/8 consistent with the change in business operations, structural changes within the Company to improve performance of the business and management, and to meet future demands and changes in direction.
The current Board has five (5) members of which three are independent members.
The current Chairman, Peter Wicks is independent.

2.3 Chair and CEO not the same. The Chairman is not the Chief Executive Officer.
2.4 Establish a Nomination Committee. The functions of a Nomination Committee have been undertaken by the Board in conjunction with the CEO due to the size of the Company and the demands of business operations. It is intended that in the future, consistent with the then demands, that a separate Nomination Committee be established according to the guidelines.

2.5 Board, committee and director performance evaluation process.

 

 The Company does not have in place formal evaluation measures and processes as, to date, the nature, size and scope of the business justified an informal process. The Board has taken steps to introduce performance evaluation measures and schedule reviews. New director induction is undertaken by nominated independent directors with the assistance of officers and external independent advisers. Directors have access to all records and information, as required.
2.6 Reporting Results The skills and experience, independent status, period of office of each member of the Board are reported at “Information on directors” in this Report. The Board has adopted a procedure of seeking independent advice at relevant times to assist the Board to assess proposals and make appropriate decisions. The selected advisors are specialised in relevant areas and have advised the Board at regular intervals as the need arises. The more common areas of advice include legal, taxation, corporate, insurance and finance.

3.0

Promote ethical and responsible decision-making.

The Company operates using clear standards of ethical behaviour for all members of the Company. Regular action is taken to maintain and observe the standards. The Company Securities Trading Policy is published on the Company website.

3.1 Establish a code of conduct to guide the directors, the CEO, the CFO and any other key executives as to:

3.1.1 practices necessary to maintain confidence in the Company’s integrity.

3.1.2 practices necessary to meet legal obligations and the expectations of stakeholders.

3.1.3 the responsibility and accountability of individuals for reporting or investigation reports of unethical practices.

 The Company satisfies these requirements through an adopted informal policy governed and directed by members of the Board and senior management. The Company is undertaking formalisation of these policies and the adoption of additional policies. The Company intends to incorporate the code of conduct in the management process and to encourage, integrate and maintain such practices in all levels of operation including stakeholder and public contact.

3.2  Disclose the policy concerning trading in Company securities by directors, officers and employees.

 

3.3 Reporting Results

 The Company has a formal policy which sets out time restrictions on share dealings. The Company policy is that of the Corporations Law and ASX Listing Rules which state that dealings are not permitted at any time whilst in the possession of price sensitive information not already available to the market. Directors and employees have 45 day windows to trade shares beginning one (1) day after release to the ASX of half year and full year results. Otherwise, prior to any director (or their associates) trading in the Company’s securities approval from a non-executive director is required. For senior management (and their associates) and employees, approval is required from the Company Secretary. The policy is published on the Company website and is subjected to regular review.
The Company’s compliance with the Principle is detailed above.

4.0

Safeguard integrity in financial reporting.

The Audit Committee regularly undertakes, by delegation, the review of the Company’s financial position and reports to the Board. The relevant considerations by the committee, amongst other considerations, is to ensure the truthful and factual presentation of the Company’s financial position as presented in financial statements and other records. The Company auditor’s advice is regularly sought to ensure such objectives are maintained according to relevant accounting standards.

4.1 Establish an Audit Committee.
4.2 Appropriate structure of Audit Committee.

 

 The Company Audit Committee was established on 28th April 2006 and has operated since that time.
At the present time and for the life of the Committee it has consisted of two directors. At all times (until 30th August 2008) there has been one independent director who is also the chair of the committee. The other director filled the role of Executive Chairman for the period between 1 January 2008 and 14 May 2008. The Board now has sufficient numbers, expertise and composition to expand the Committee within 30 days of this report and meet the recommendation.

4.3 Committee Charter

 The Audit committee has a formal charter that satisfies the relevant requirements. The Charter sets out the responsibilities and reporting process and meets at regular intervals as appropriate to the size, nature and scope of operations. The Charter is published on the Company website.
4.4 Reporting Results The names and qualifications of the Audit Committee members and the meeting details are indicated in this section and in the “Directors information” and “Directors Meetings” sections of this Report.
   

5.0

Make timely and balanced disclosure.

The Board, as part of the formal process of each meeting, considers the Company’s disclosure obligations and regards those obligations and the dissemination to the market in a timely, balanced and factual manner of paramount importance.
5.1 Establish written policies and procedures designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior management level for that compliance.

There are no written policies to evidence the stated processes of consideration and the Board relies upon the integrity and independence of its members to make such decisions. The Board intends to consider formalisation of the process.
The Board is able to meet regularly to satisfy the Company’s obligations for disclosure of material matters in accordance with the ASX Listing Rules.

 
5.2 Reporting Results See above for information as to compliance with this recommendation.

6.0
Respect the rights of Shareholders  
6.1 Design and disclose a communications strategy to promote effective communication with shareholders and encourage effective participation at general meetings.

Information is communicated to shareholders through:

  • the distribution of the annual report to all shareholders,
  • the half yearly, quarterly and regular performance reports released to the ASX,
  • the annual general meeting,
  • ASX releases in accordance with continuous disclosure obligations, and
  • information available on the Company’s website.
6.2 Reporting Results The Company encourages stakeholder contact and provides additional information through improved technology where permissible. The Company invites the auditor to Shareholder Meetings to answer enquiries where appropriate.

7.0
Recognise and manage risk The Board, in conjunction with senior management and independent advisers, undertakes regular risk assessments for existing and future operations, undertakings, systems and processes to maintain acceptable risk levels.
7.1 Establish policies on risk oversight and management. Appropriate risk policies are currently subject to Board and management assessment with a view to formalisation. Risk oversight and management issues and policies are reviewed by the Board as a whole and approved by resolution of the Board (with abstentions from relevant Directors where there is a conflict of interest).The Board considers it appropriate at this time, considering the current nature and scope of operations, to formalise such policies and incorporate review processes. It is intended that such policies would be notified to the Company stakeholders in an appropriate fashion.
7.2 Design and implement risk management and internal control system for material business risks and report on risk management. Board responsibility to report management performance in management of business risks.

The Board receives regular reports from management based on a structured review and system. The review system acts as a control system. The formalisation of the risk management policies will involve an appropriate internal control system. The Board intends to formalise that part of its current reporting system as part of formalising its risk management and internal control policies and management of the systems. The Board will decide if the size, nature and scope of operations will require the establishment of a Risk Management Committee or whether that function can be adequately undertaken by the Board.
That assurance has been obtained by the Board
7.3 Board disclosure of receipt of assurance from CEO/CFO that the declaration under Section 295A of Corporations Act is based upon a sound system of risk management and internal control which is operating effectively for financial reporting risks.  
7.4 Reporting Results The Board has met the obligations in this Principle as indicated above. The Board intends to publish in the future, on the Company website, a summary of the policies.

8.0
Remunerate fairly and responsibly  
8.1 The Board should establish a remuneration committee. The Board established a remuneration committee on 28 April 2006. The Committee has operated since that time. At the present time and for the life of the Committee it has consisted of two directors. At all times (until 30th August 2008) there has been one independent director who is also the chair of the committee. The other director filled the role of Executive Chairman for the period between 1 January 2008 and 14 May 2008. The Board now has sufficient numbers, expertise and composition to expand the Committee within 30 days of this report and meet the recommendation. Where necessary the Committee seeks independent advice of current trends and appropriate remuneration structures based on the role to be filled and the size, nature and scope of operations of the Company.
8.2 Non-Executive Directors remuneration should be distinguished from Executive directors and Senior Management. This is the case in respect to relevant remuneration packages.
8.3  Reporting Results The names of the members of the Remuneration Committee and their attendance at meetings is recorded in the “Information on directors” and “Directors Meetings” sections of this report. There are no schemes in place for retirement benefits, other than superannuation, for non-executive directors. The above responses indicate any departures from this Principle.