1. PURPOSE AND SCOPE
Freehill Mining Limited (FHM) recognises that corporate governance is
fundamental to the effective operation of the company.
The Board is the pivotal element of corporate governance as it strives to
be an effective and independent representative of stakeholders and
provide value to the organisation.
This Charter sets out the responsibilities, structure and composition of
the Board of Directors (Board) of the company.
2. ROLE OF THE BOARD
The Board's primary role is the protection and enhancement of long-term
shareholder value. To fulfil this role, the Board is responsible for the
overall management and corporate governance of FHM, including its
strategic direction, establishing goals for management and monitoring the
achievement of these goals.
The specific roles and responsibilities of the Board are:
· oversight of FHM, including its controls, risk management,
financial structures and accountability systems;
· setting strategic direction for management with a view to
maximising shareholder value;
· input into and final approval of strategic plans and goal and
performance objectives and key operational and financial matters;
· determine dividend payments;
· selecting, appointing and reviewing the performance of the Chief
Executive Officer (CEO);
· ratifying the appointment and, where appropriate, the removal of
the Chief Financial Officer (CFO) and Company Secretary;
· approval of annual and half yearly financial reports and related
Australian Securities Exchange reports;
· selecting and appointing new non-executive directors;
· approve major capital expenditure and acquisitions;
· evaluate the Board's performance and that of individual directors;
· reviewing and ratifying systems of risk management and internal
compliance and control, codes of conduct and legal compliance;
· monitoring senior management's performance and implementation of
strategy, and ensuring appropriate resources are available;
· deal with approaches to take over the company; and
· approve and monitor financial and other reporting.
3. ROLE OF EXECUTIVE DIRECTOR
The Board has delegated authority for the management of FHM's day to day
business operations. The Executive Director is responsible for managing
the Company in accordance with the strategies and policies approved by
the Board and for keeping the Board informed of all activities within the
He is also responsible for appointing the executives and staff of FHM and
for ensuring that any price sensitive information required to be
disclosed to the ASX under continuous disclosure regulations is passed on
to the Company Secretary.
4. BOARD COMPOSITION
The Board reviews its composition and assesses nominations for new
appointments from time to time to ensure the right balance of skills and
experience is maintained.
The Board members are listed in the annual report with their brief
Directors are considered independent directors if they:
· are not a substantial shareholder or associated directly or
indirectly with a substantial shareholder;
· haven't been employed in an executive position in the last three
years by FHM or a substantial shareholder;
· have not been a principal of a material professional advisor or
consultant to FHM in the last three years;
· are not a material customer/supplier of FHM;
· have no material contractual relationship with FHM; and
· have no other interest or relationship that could interfere with
the director's ability to act in the best interests of FHM.
Directors must keep the Board advised, on an ongoing basis, of any
interest that could potentially conflict with those of FHM. Where the
Board believes that a significant conflict exists, the director concerned
is not to receive the relevant board papers and is not to be present at
the meeting whilst the item is considered. Independent directors should
provide all relevant information to allow the Board to regularly assess
their independence. The Company Secretary holds a Conflicts of Interest
register where all conflicts must be recorded.
The Constitution of FHM provides that:
· the number of directors shall be more than three but not more than
· one-third of directors must retire from office at the Annual
General Meeting (AGM) each year and such retiring directors are eligible
· directors appointed to fill casual vacancies must submit to
election at the next general meeting;
· the number of directors necessary to constitute a quorum is not
less than two of the directors currently in office, of which one must be
a non-executive director.
The composition of the Board is determined using the following
· the number of directors may be increased where it is felt that
additional expertise is required in specific areas, or when an
outstanding candidate is identified;
· the Chairman of the Board should be a non-executive director;
· the Board should comprise a majority of non-executive directors;
· the Board should comprise of directors with a broad range of
expertise both locally and nationally.
5. ROLE OF THE CHAIRMAN
The Chairman is responsible for the leadership of the Board, for the
efficient organisation and conduct of Board functions and for briefing of
all directors in relation to issues arising at Board meetings.
The role of the Chairman and the Executive Director should not be
exercised by the same person.
The Chairman is to be an independent director.
6. BOARD COMMITTEES
One Board committee has been established to assist the Board in the
execution of its duties and responsibilities. This is the Audit
The Charter of each Board committee setting out the matters detailing its
composition and responsibilities are separate documents which are
approved by the Board.
7. NOMINATIONS COMMITTEE
The Company does not have a separate Nominations Committee.
The structure of the Board is reviewed annually by Board members to
ensure that it has an appropriate mix of qualifications, skills,
experience and diversity.
When assessing the structure of the Board, the following issues are
· an assessment of the skills and competencies of the Board;
· from time to time, assessing the extent to which the required
skills are represented on the Board;
· establishing processes for the identification of suitable
candidates for appointment to the Board; and
· considering recommendations for the appointment of Directors.
8. DIRECTOR EDUCATION
FHM has a process to educate new directors about the nature of the
business, current issues, the corporate strategy and the expectations of
FHM concerning the performance of directors. Directors also have the
opportunity to visit FHM facilities and meet with management to gain a
better understanding of business operations.
9. INDEPENDENT PROFESSIONAL ADVICE AND ACCESS TO COMPANY
The Board is provided with complete and adequate information prior to
Board meetings and on an ongoing basis. Board papers are prepared and
generally sent to directors at least three working days in advance. They
will include management reports, latest financial accounts, matters
requiring the Board's decision and updates on key outstanding issues.
Each director has the right of access to all relevant company information
and, subject to prior consultation with the Chairman, may seek
independent professional advice at FHM's expense. A copy of the advice
received by the director is to be made available to all other members of
10. PERFORMANCE EVALUATION
The Chairman of the Board evaluates the performance of individual
directors and the Board collectively on an ongoing basis. Performance
criteria to which he has reference include attendance and participation
at meetings, contribution to Board debate on key issues and the
effectiveness of the Board as a whole in providing the company with clear
guidance and direction.