Virgin Australia Board Charter and Statement of Delegated Authority

Transcription

1 Virgin Australia Board Charter and Statement of Delegated Authority 1. Purpose The purpose of this policy statement is to establish an appropriate, practicable and consistent framework of control for the Virgin Australia group, so as to maximise compliance with statutory and best practice requirements. The framework of control is intended to assist executive officers and others to effectively perform their duties and manage risk, whilst enabling the Board to monitor performance and compliance. 2. The Role of the Board The role of the Board is to provide strategic guidance for Virgin Australia and effective oversight of management. In performing its role, the Board should act at all times: in recognition of its overriding responsibility to act honestly, fairly and in accordance with law in serving the interests of all of the Company's shareholders, as well as its employees, customers and the community; in a manner designed to create and continue to build sustainable value for all shareholders; in accordance with the duties and obligations imposed upon them by the Constitution and the law; and with integrity and objectivity, consistently with the ethical and other standards set out in the Company s corporate governance policies and codes of conduct. The Board always retains ultimate authority over management of the Company and its related bodies corporate. References in this Charter to related bodies corporate has the meaning given in the Corporations Act 2001 (Cth). 3. The Responsibilities of the Board The responsibilities of the Board in respect of the Company and its related bodies corporate include: setting the direction, strategies and financial objectives of the Company; oversight of Virgin Australia, including its control and accountability systems; appointing, reviewing the performance of, and removing the Chief Executive Officer; reviewing the performance of, and approving a recommendation to remove, the General Manager, Safety Systems; 4 July 2014 Page 1 of 8

2 (e) (f) (g) (h) (j) (k) (l) (m) (n) (o) (p) (q) ratifying the appointment and, where appropriate, ratifying the removal of the Chief Financial Officer; monitoring compliance with regulatory requirements and ethical standards; over-viewing and approving management s corporate strategy and performance objectives; monitoring the implementation of the policies, strategies and objectives of the Company; reviewing and ratifying systems of risk management and internal compliance and control; establishing corporate governance and legal compliance systems, as well as monitoring compliance with those systems; monitoring senior management s performance and their implementation of strategy and budgets, ensuring appropriate resources are available for the Company in the pursuit of its objectives; approving and monitoring the progress of major capital expenditure, capital management, and acquisitions and divestitures; approving and monitoring financial and other reporting; approving significant changes to the organisational structure, including significant acquisitions, divestiture, or changes to the capital of the Company; deciding on any matter which is in excess of the discretions or limits that have been delegated from time to time to senior management; and reviewing on a continuing basis: (ii) executive succession planning; and executive development activities. In performing its responsibilities and functions, the Board may delegate any of its powers to a Board committee or to other persons in accordance with the Constitution. 4. Board Composition 4.1 Board Composition The Directors have determined that the number of Directors will be 12. The Board has determined that: (ii) The Chief Executive Officer should be a director; Directors representing shareholders with a relevant interest of at least 19.9% (Nominating Shareholder) may be appointed in accordance with the terms of the Company s Nominee Director Protocol; Page 2 of 8

3 (iii) (iv) Directors who represent, are nominated by, or are employed by, a shareholder with a relevant interest of at least 5% (Substantial Shareholder) must comply with the Company s Nominee Director Protocol; and Additional directors will be appointed at the Board s discretion. The Board notes that: (ii) (iii) (iv) (v) (vi) (vii) The Chief Executive Officer is a director; Etihad Airways, which is a Nominating Shareholder; Singapore Airlines, which is a Nominating Shareholder; the Virgin Group, which is a Substantial Shareholder; the HNA Group, which is a Substantial Shareholder; Nanshan, which is a Substantial Shareholder; Six directors, including the Chairman, are independent non-executive directors. The Board considers its composition is appropriate given the interests held by the Nominating Shareholders and Substantial Shareholder, and that the Chairman is an independent non-executive director who has a casting vote if there is an equality of votes at a meeting of directors. 4.2 Subsidiary Boards The Board of Virgin Australia determines the composition, powers, and authorities of related bodies corporate of the Company, save where such matters are agreed contractually as a part of any joint venture investments. Where it is appropriate, the Board may appoint an independent person to a board of such related body corporate. The Board may decide to have a main Board Director Representative appointed to the Boards of significant operating subsidiaries. 4.3 Board Committees The Board has established, and may establish, additional committees to assist it in carrying out its responsibilities. These committees act by examining various issues and making recommendations to the Board. Page 3 of 8

4 The committees which have currently been established are: Audit and Risk Management Committee; Nomination Committee; Safety and Operational Risk Review Committee; and Remuneration Committee. Formal Charters setting out the objectives, scope and administration of each committee have been or will be established. The Board may also delegate specified responsibilities to ad hoc committees from time to time. 5. Independence The Board considers that, fundamentally, the independence of Directors is based on their capacity to put the best interests of the Company and its shareholders ahead of all other interests, so that Directors are capable of exercising objective independent judgment. Capacity to act independently and the skill sets and experience of individual Directors to complement the skills and experience of the Board overall are critical criteria in candidate selection. The capacity for individual Directors to add value to the Board is very important. When evaluating candidates, the Board will have regard to the potential for conflicts of interest, whether actual or perceived, and the extent or materiality of these in the ongoing assessment of Director independence. In this respect the Board has regard to the definition of independence in the ASX Guidelines. The Board does not believe that the existence of one or more of the relationships in the definition will necessarily result in the relevant Director not being classified as independent, particularly given the criteria outlined above, and that the Company will seek to implement additional safeguards to ensure independence. An overall review of these considerations is conducted by the Board to determine whether individual Directors are independent. Additional policies, such as Directors not being present during discussions or decision making in matters in which they have or could be seen to potentially have a material conflict of interest, as well as Directors being excluded from taking part in the appointment of third party service providers where the Director has an interest, provide further separation and safeguards to independence. The Board has considered materiality thresholds in relation to independence, but has determined not to establish fixed thresholds, believing that, if taken in isolation and out of context, these can be misleading and inconclusive. Page 4 of 8

5 Any decision by the Board as to whether a set of circumstances makes a Director an Independent Director or otherwise is conclusive and all Directors will abide by that decision. 6. Roles 6.1 Chairman The Chairman will be an independent, non-executive director. The Chairman is to have a casting vote at full Directors meetings. 6.2 Chief Executive Officer The CEO is responsible for the executive management of the Company, and is accountable to the Board for the day to day operations. The CEO is authorised to delegate such of the powers conferred on him as he deems appropriate. The delegation of powers by the CEO is subject to the limits and restrictions set out in the Delegated Authorities Manual. 7. Authority Delegated to Senior Management 7.1 Delegation to the CEO The Board has delegated to the Chief Executive Officer authority over the day to day management of the Company, its subsidiaries and their respective operations. This delegation of authority includes responsibility for: (e) developing business plans, budgets and company strategies for consideration by the Board and, to the extent approved by the Board, implementing these plans, budgets and strategies; identifying and managing operational risks on a daily basis and, where those risks could have a material impact on the Company s businesses, formulating strategies for managing these risks for consideration by Board; managing the Company s current financial and other reporting mechanisms as well as its control and monitoring systems to ensure that these mechanisms and systems capture all relevant material information on a timely basis and are functioning effectively; ensuring that the Board and its various committees are provided with sufficient information on a timely basis in regard to the Company s business and, in particular, with respect to the Company s performance, financial condition, operating results and prospects, to enable the Board and those committees to fulfil their governance responsibilities; and implementing the policies, processes and codes of conduct approved by the Board. 7.2 Reserved Powers Any responsibilities not specifically delegated by the Board to the Chief Executive Officer or through him to Heads of Department, remain the responsibility of the Board. Page 5 of 8

6 8. Framework of Control While the Board is responsible for the framework of control, it has developed a set of policies, procedures and practices and established various committees to assist it in effecting and monitoring compliance. These controls have been designed to be, and are intended to be, practical and cost effective. They are not intended to limit initiative or flexibility in conducting business. The framework of control comprises several elements, including the following: (e) (Authorisations) All employees need to understand the powers that have been assigned to their position and the point at which a decision must be referred to others; (Segregation of Duties) To the extent practicable, one person should not be permitted to both authorise and execute a transaction; (Policies and Procedures) Policies assist people to make decisions with confidence that those decisions will be consistent with the objectives of Virgin Australia and their own business unit; (Standards of Performance) Standards of performance permit comparison of results with what was planned, or with some other benchmark; and (Internal Audit of Risk Management) Internal audit of management operates by evaluating the effectiveness of the other elements of control and by appraising compliance and risk. 9. Informing the Board The system of delegation of authority and the exercise of that authority is predicated on an assumption that directors of Virgin Australia are appropriately and fully informed on all material issues. This means that appropriate and sufficiently detailed reports must be furnished at regular intervals including: decisions, exercise of powers, or issues, considered to be material; a summary of activities in the business units; information that gives assurance that appropriate accounting systems, information systems, controls, and procedures are being maintained; and accounting and related information that sets out current, and forecast, status of the business. This information must be in a form, timeframe and quality that enables the Board to discharge its duties effectively. The Board will therefore review the terms of the Authorities not only in light of the affairs of the Company and the performance of its delegates from time to time, but also the quality of information it is receiving from the delegates. Page 6 of 8

7 10. Meetings 10.1 Notices of Meeting Where possible and time permits, Board and committee papers should be provided to directors at least 4 days prior to the relevant meeting Non-Executive Meetings The non-executive directors of the Company shall meet on multiple occasions each year for private discussion of management issues. 11. Company Secretary The Company Secretary of each Group Company shall have authority to counter-sign documents of that company, provided that the Company Secretary is first satisfied that: the document has been properly authorised for signature; the document has been signed by a director of that company; and all directors of that company have been notified of the need for execution of the relevant document prior to its counter-execution by the Company Secretary. 12. Authorisations The Auhtorisations set out in the Delegated Authorities Manual are established on the basis that the Board will: (ii) perform the tasks and responsibilities set out in section 3 of this paper; receive appropriate and sufficient reports on the conduct of the business and material issues in the manner contemplated by section 9 of this report; and therefore does not need to be involved in day-to-day operations. (e) (f) (g) Authorisations are primarily concerned with the powers to bind or create an obligation on the Company. Unless specified otherwise, powers are delegated to a Position and not to a person. An occupant of a Position assumes the powers delegated to subordinates within their designated span of control. Employees can only exercise assigned powers related to their area or functional responsibility. Temporary delegations (to cover extended leave or absence of the usual occupant of the Position) must be formally approved and promulgated. Heads of Departments will necessarily need to delegate specific and significant powers and responsibilities to the next level of management. Authority should be driven down through the organisation to ensure people at every level are empowered to make timely and effective decisions relevant to their activities. Page 7 of 8

8 (h) Authorisations apply to all business units and divisions throughout the Group. They can only be altered with approval of the Board. 13. Review of Authorisations The table of Authorisations must be reviewed annually to ensure the content and levels of Authority remain relevant. The review will include a check for compliance. The Table of Authorisation should also be reviewed when any significant event occurs that could change the way the Authorisations are applied or interpreted (e.g. after a restructure of the Group, or an acquisition, or when there is a significant change in the business environment, etc). Each Head of Department will conduct a review of the table of Authorisations in liaison with the Chief Executive Officer. 14. Review of Charter The Chairman of the Company will be the arbiter for interpretation and/or clarification of this Board Charter and Statement of Delegated Authority. Omissions should also be brought to the attention of the Chairman. This Board Charter and Statement of Delegated Authority is subject to amendment by the Board. The Board intends to review its terms periodically. This policy was approved by the Board and is effective 4 July This updated Charter was approved by the Board on 28 August Page 8 of 8