1. Purpose and Context

Heggies Pty Ltd is a private company owned by core management and senior staff members.  The Constitution provides for a Board with up to six Directors and a Chairperson appointed by the Directors.  Subject to provisions of the Constitution, the Managing Director is appointed by the Board.  The Managing Director is responsible for the operational management of the company.  In consultation with the Board, the Managing Director appoints Regional General Managers and QMS Managers to manage day to day operations of the company with the support of an Executive Management Committee.

The Board appoints Directors or other advisers to convene and serve on Board Committees.  These Committees advise the Board on specific corporate governance issues from time to time (eg Constitutional Review Committee, Corporate Risk Management Committee, Strategic Business Development Committee, Remuneration, Incentives and Performance Committee, Management and Ownership Succession Committee). 

The Chairman is an ex-officio member of Board Committees.

2. Good Governance - Best Practice Standards

The company is strongly committed to attaining the highest standards of corporate governance and engendering a culture of compliance.  The Board of Directors and Executive Management focus on continual improvement of the company’s corporate governance performance and apply ethical conduct in dealings with stakeholders to achieve the company’s Quality Objectives.

The Board and Executive are guided by Australian Standards AS8000 to AS8004 and the Australian Stock Exchange’s Principles of Good Governance and Best Practice Recommendations.  The roles of the Board, the Executive Management Committee and other Board Committees are described below, along with an overview of the good governance principles under which they operate.

3. Composition of the Board and Committees

Directors are elected by the Shareholders or appointed by the Board.  The Managing Director is also appointed by the Board, and also serves under the provisions of the Constitution.  The Chairperson and Company Secretary are appointed by the Board.

The Board of Directors has overall responsibility for corporate governance of the company on behalf of the Shareholders.  The Board sets policies and establishes fundamental company objectives and strategic directions for the company and its management to maintain health and safety, improve and sustain the environment and meet obligations to society and humanity.

The Managing Director (in consultation with the Board) appoints Regional General Managers.  The Managing Director consults with Regional General Managers and the Board to appoint members of the Executive Management Committee and to define and delegate the roles, power and authority of the Regional General Managers and members of the Executive Management Committee.

The Board reviews the plans and targets set by the Managing Director, the Regional General Managers and the Executive Management Committee for consistency with corporate objectives and directions.  The Board monitors the performance of the Chairperson, Managing Director, the Directors, the Company Secretary, the Regional General Managers and the Executive Management Committee to evaluate and improve effectiveness and to ensure consistency with policy and fundamental objectives and achievement of outcomes against established targets.

Broad risk management strategies are established at Board and Executive Management level to maintain and improve the company’s operational and financial performance and viability, to identify and manage corporate risks (including the liabilities of its officers) and to safeguard its assets and interests and ensure the integrity of the company’s management, operations, services and corporate health.

The Executive Directors are Members of the Executive Management Committee.  Other Board Committees may include Directors, shareholders, senior managers and other competent advisors - from within the company and/or from outside.

Close alignment between the Board and the Executive Management Committee enhances the dynamic efficiency, flexibility and responsiveness of management.  On the other hand, these close arrangements have potential to reduce independence between the Board’s management of corporate responsibilities and the company’s management of its operations.  The Board has therefore established an Independent Board Advisory Committee to assist in guiding and improving the company’s Corporate Governance performance.

Appropriate independence of function, responsibility, review and oversight is achieved by defining the roles of the Chairman and Managing Director, the Company Secretary, the Directors serving on the Executive Management Committee, the General Managers and the functions of other members of the Board.  Potential conflict or uncertainty is also addressed by implementing clear processes to define and manage the delegation of responsibility and authority to Board and members of Executive Management.  Over time, increased non-executive representation will be introduced at the Board level.

4. Organisational Structure

5. Role and Functions of the Board

The Board oversees business activities and management for the benefit of all stakeholders by:

• Promoting a strong culture of Corporate Governance compliance.
• Establishing legal, corporate governance, ethical, environmental and health and safety policies.
• Ratifying other company policies developed by QMS Managers and Executive Management.
• Setting objectives, goals and the strategic direction of management to maximise shareholder value.
• Ensuring that appropriate financial, physical and human resources are available.
• Overseeing the financial position and monitoring the business and financial affairs of the Company.
• Ensuring significant business risks are identified and appropriately managed.
• Monitoring management's performance and its implementation of policies and strategies.
• Stimulating and maintaining motivation and a positive corporate culture throughout the company.
• Ensuring that the composition of the Board and Executive Management remains appropriate.
• Reviewing the performance and contributions of the Board, the Chairperson, the Managing Director, the Directors, the Company Secretary, the Regional General Managers and the Executive Management Committee.

Responsibility and authority for managing the company's day to day operational business resides with the Managing Director, with the support of the Regional General Managers and the Executive Management Committee.  Responsibility for management of liaison between the Executive Management Committee and the Board resides with the Managing Director.

6. Role of the Executive Management Committee

The Managing Director in consultation with the Board and Regional General Managers nominates Executive Directors to serve on the Executive Management Committee.  Senior managers from within the company (and possibly from outside - with appropriate expertise and experience) are also appointed to serve on the Executive Management Committee from time to time, depending on the company’s specific needs.  The responsibility and authority of the Regional General Managers and members of the Executive Management Committee are reflected in the roles and functions defined below. 

• Attend or contribute to meetings of the Board as Managers (irrespective of being Directors or non-Directors) when their areas of operational responsibility are being considered.
• Prepare and communicate policies and strategies for consideration by the Board and implement the policies and strategies adopted by the Board.
• Have appropriate knowledge of and review contracts and other information about the company’s business affairs and financial position and prepare summary reports for the Board where appropriate.
• Ensure appropriate operational resources are available and manage the operational performance of the company's strategic business units (Regions, Offices, Divisions and Project Groups).
• Ensure that appropriate administrative resources are available and coordinate the day to day functions of the company’s Integrated Quality Management System.
• Oversee establishment and monitoring of proper internal controls, management information systems, communications systems and accounting records, including budgets and cashflow projections and Weekly, Monthly, Quarterly and Annual KPI Status Reports and Financial Reporting.
• Oversee and guide the company's responses to key personnel matters including conditions of employment of and staff recruitment, retention and termination.

7. Conduct of Directors

Without limiting any obligations under the Corporations Act or other statutory provisions, members of the Board:

• Act in good faith and in the interests of the company and its collective shareholders.
• Act in the interests of creditors where the company is insolvent or likely to become insolvent.
• Exercise the degree of care, skill and diligence that it is reasonable to expect for the company.
• Exercise their powers for the purpose for which they were conferred, including detection of fraud or irregularities.
• Retain their discretionary powers and take appropriate action and/or seek advice over any issue of concern.
• Must not cause detriment to the company and must avoid conflicts of interest and disclose all potential conflicts.
• Comply with the requirements of the Corporations Act and other statutory requirements.

Executive Directors also hold other management positions within the company.  Potential conflicts of interest are managed by establishing processes and procedures and clear priority for discharging the responsibilities and authorities associated with the roles.  These priorities are addressed in the order of Director's role and Company Objectives first, obligations to subordinates second and responsibility for self interests third.  All employees are requested to adhere to a Code of Ethics.

8. Good Corporate Governance Principles

The Board has adopted the following principles of good corporate governance:

Promote ethical and responsible decision-making

• Promote greater recognition and improved responses to corporate governance responsibilities.
• Strengthen Executive Management and seek broader consultation on decisions.

Safeguard integrity in financial reporting

• Enhance integration and work towards simpler, clearer financial management systems.
• Implement more comprehensive and timely financial analysis and reporting.

Make timely and balanced disclosure

• Enhance the quality and timeliness of financial reporting to members.
• Implement continuing enhancement of the Concise Annual Report to Shareholders.

Respect the rights of employees and shareholders

• Increase the effectiveness of consultation with members and staff on issues of change.
• Continue to provide equitable distribution of ownership opportunities to managers.

Recognise and manage risk

• Improve the focus on improving contractual arrangements and managing obligations/liabilities.
• Balance strong strategic growth strategies with prudent risk management and contingency plans.