Syndicated Metals Limited - Corporate Governance Statement
Approach to Corporate Governance
Syndicated Metals Limited ACN 115 768 986 (Company) has established a corporate governance framework, the key features of which are set out in this statement. In establishing its corporate governance framework, the Company has referred to the recommendations set out in the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations 3rd edition (Principles & Recommendations). The Company has followed each recommendation where the Board has considered the recommendation to be an appropriate benchmark for its corporate governance practices. Where the Company's corporate governance practices follow a recommendation, the Board has made appropriate statements reporting on the adoption of the recommendation. In compliance with the "if not, why not" reporting regime, where, after due consideration, the Company's corporate governance practices do not follow a recommendation, the Board has explained its reasons for not following the recommendation and disclosed what, if any, alternative practices the Company has adopted instead of those in the recommendation.
The following governance-related documents can be found on the Company's website at www.syndicatedmetals.com.au, under the section marked "Corporate Governance":
Charters
Board
Nomination Committee Audit and Risk Committee Remuneration Committee
Policies and Procedures
Process for Performance Evaluation
Policy and Procedure for the Selection and (Re)Appointment of Directors Induction Program
Procedure for the Selection, Appointment and Rotation of External Auditor Code of Conduct (summary)
Diversity Policy (summary)
Policy on Continuous Disclosure (summary) Compliance Procedures (summary)
Shareholder Communication and Investor Relations Policy Securities Trading Policy
The Company reports below on whether it has followed each of the recommendations during the 2015/2016 financial year (Reporting Period). The information in this statement is current at and was approved by a resolution of the Board on 29 August 2016.
Principle 1 - Lay solid foundations for management and oversight
Recommendation 1.1
The Company has established the respective roles and responsibilities of its Board and management, and those matters expressly reserved to the Board and those delegated to management and has documented this in its Board Charter.
Recommendation 1.2
The Company undertakes appropriate checks before appointing a person, or putting forward to shareholders a candidate for election as a director and provides shareholders with all material information in its possession relevant to a decision on whether or not to elect or re-elect a director.
The checks which are undertaken, and the information provided to shareholders are set out in the Company's Policy and Procedure for the Selection and (Re)Appointment of Directors.
Recommendation 1.3
The Company has a written agreement with each director and senior executive setting out the terms of their appointment. The material terms of any employment, service or consultancy agreement the Company, or any of its child entities, has entered into with its Managing Director, any of its directors, and any other person or entity who is a related party of the Managing Director or any of its directors has been disclosed in accordance with ASX Listing Rule 3.16.4 (taking into consideration the exclusions from disclosure outlined in that rule).
Recommendation 1.4
The Company Secretary is accountable directly to the Board, through the Chair, on all matters to do with the proper functioning of the Board as outlined in the Company's Board Charter. The Company Secretary's role is also outlined in the employment agreement between the Company Secretary and the Company.
Recommendation 1.5
The Company has a Diversity Policy, pursuant to which the Board may set measurable objectives for achieving gender diversity that are appropriate for the Company, and if objectives are set, to assess annually both the objectives and the Company's progress in achieving them.
The Company's Diversity Policy does not require the Board to set measurable objectives for achieving gender diversity, nor has the Board set measurable objectives for achieving gender diversity. The Board considers that it is not practical at this stage of the Company's operations to establish measurable objectives for achieving gender diversity given the small number of employees. However, the Board will review this position as its circumstances change.
The respective proportions of men and women on the Board, in senior executive positions and across the whole organisation are set out in the following table. "Senior executive" for these purposes means those persons who have the opportunity to materially influence the integrity, strategy and operation of the Company and its financial performance.
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Proportion of women
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Whole organisation
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0 out of 4 (0%)
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Senior executive positions
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0 out of 1 (0%)
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Board
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0 out of 4 (0%)
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Recommendation 1.6
The Chair is responsible for evaluating the performance of the Board, Board committees and individual directors in accordance with the process disclosed in the Company's Process for Performance Evaluations.
During the Reporting Period an evaluation of the Board, its committees and individual directors took place in accordance with the process disclosed in the Company's Process for Performance Evaluations.
Recommendation 1.7
The Managing Director is responsible for evaluating the performance of senior executives in accordance with the process disclosed in the Company's Process for Performance Evaluations.
During the Reporting Period an evaluation of senior executives in accordance with the process disclosed in the Company's Process for Performance Evaluations did not take place as all senior executive roles were terminated in November 2015.
Principle 2 - Structure the board to add value
Recommendation 2.1
The Board has not established a separate Nomination Committee. Given the current size and composition of the Board, the Board believes that there would be no efficiencies gained by establishing a separate Nomination Committee. Accordingly, the Board performs the role of the Nomination Committee.
Although the Board has not established a separate Nomination Committee, it has adopted a Nomination Committee Charter, which describes the role, composition, functions and responsibilities of the full Board in its capacity as the Nomination Committee. When the Board convenes as the Nomination Committee it carries out those functions which are delegated to it in the Company's Nomination Committee Charter. Items that are usually required to be discussed by a Nomination Committee are marked as separate agenda items at Board meetings when required. The Board deals with any conflicts of interest that may occur when convening in the capacity of the Nomination Committee by ensuring that the director with conflicting interests is not party to the relevant discussions.
The full Board did not convene as a Nomination Committee during the Reporting Period as there were no positions requiring Nomination Committee consideration.
The Company's Nomination Committee Charter is disclosed on the Company's website.
Recommendation 2.2
The Company's objective is to have an appropriate mix of skills and diversity on its Board and Committees to enable it to effectively carry out its oversight and corporate governance responsibilities.
The Board currently has the following mix of skills, expertise, qualifications and experience represented by its members:
Expertise Strategy
Governance and compliance Health and safety
Risk management Executive management Commercial acumen
Financial knowledge and experience
Qualifications Geological qualifications
Mining engineering qualifications Management qualifications.
Experience
Mining industry experience Technical experience Operational experience
Project development skill and experience Business development skill and experience Equity and debt financing experience
The Board is not currently looking to increase its size. However, as the Company's activities develop, the Board will consider the appointment of a further independent director, ideally with financial qualifications, to support and strengthen the current Board and management team.
Recommendation 2.3
The Board considers the independence of directors having regard to the relationships listed in Box 2.3 of the Principles & Recommendations. The sole independent director of the Company is Mr Langworthy.
The remaining directors are not independent for the following reasons:
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Mr Munckton is the Company's Managing Director.
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Mr Morgan has within the last three years been employed in an executive capacity with the Company.
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Mr Cooper is the Chief Executive Officer of CopperChem Limited, the Company's largest shareholder (27.39%), and was appointed to the Board as CopperChem Limited's nominee.
The length of service of each director is set out in the Directors' Report on pages 3 and 4 of the Company's 2016 Annual Report.
Recommendation 2.4
The Board does not have a majority of directors who are independent. The Board considers that its composition is suitable for the Company's current size and operations, and includes an appropriate mix of skills and expertise relevant to the Company's business. In particular, the Board includes members with disciplines from geology, mine engineering and business development such that the combined expertise and judgment means that the Board is able to adequately discharge its responsibilities, and has an adequate understanding of the Company's current and emerging business.
Recommendation 2.5
The independent Chair of the Board is Mr Langworthy, who is not also the Managing Director.
Recommendation 2.6
The Company has an induction program that it uses when new directors join the Board and when new senior executives are appointed. The goal of the program is to assist new directors to participate fully and actively in Board decision-making at the earliest opportunity and to assist senior executives to participate fully and actively in management decision-making at the earliest opportunity. The Company's Induction Program is disclosed on the Company's website.
The Board regularly reviews whether the directors as a group have the skills, knowledge and familiarity with the Company and its operating environment required to fulfil their role on the Board and the Board committees effectively using a Board skills matrix. Where any gaps are identified, the Board considers what training or development should be undertaken to fill those gaps. In particular, the Board ensures that any director who does not have specialist accounting skills or knowledge has a sufficient understanding of accounting matters to fulfil his or her responsibilities in relation to the Company's financial statements. Directors also receive ongoing education as required on developments in accounting standards that are relevant to the Company
Principle 3 - Act ethically and responsibly
Recommendation 3.1
The Company has established a Code of Conduct for its directors, senior executives and employees, a summary of which is disclosed on the Company's website.