THE ROLE OF THE BOARD

It is the role of the Board to:

• establish and regularly review the business’s vision, strategic direction and goals
• ensure adequate monitoring of business performance against plan
• consider significant corporate initiatives
• overview all controls and systems including financial operations and solvency
• ensure appropriate risk management and compliance processes are in place
• ensure it is accountable to members
• ensure an effective senior management team is in place
• provide ethical and cultural leadership

BOARD PERFORMANCE AND EVALUATION

The Board considers that its performance is critical to effective governance and, as such, an annual self-evaluation is undertaken following the Co-operative’s Annual General Meeting (AGM). This process is based on a consideration of the goals established for the Board and individual directors during the previous year.

Every two years, the Board’s processes are reviewed by independent advisors.

The Board then considers the outcome of the review and implements actions to address specific recommendations.

CONFLICTS OF INTEREST

The Board seeks to continuously achieve the highest ethical standards by identifying, resolving or managing any actual or possible conflicts of interest.

Each director has a duty not to promote his or her personal interests or those of a third party in circumstances where there is a conflict or a real possibility of a conflict with the Co-operative’s interests. If this occurs, the directors affected cannot vote on any Board matter related to the issue.

SHARE POLICY

The Board maintains a share transfer policy which applies restrictions to directors in acquiring or transferring shares in Dairy Farmers. The policy limits any acquisitions or transfers to three specified time periods:

• the three weeks following the announcement of the half yearly and yearly results
• from issuance of the annual report to three weeks after the AGM

The policy also requires that the Board formally resolves to open each of the above periods.

COMMITTEES

The Board has two committees, an Audit Committee and a Human Resources Committee, both of which report to the Board and which operate in accordance with separate Board-approved charters.

AUDIT COMMITTEE

The Audit Committee has as its primary function the role of assisting the Board in meeting all statutory and fiduciary responsibilities relating to the quality and integrity of financial reporting and information. In particular, the Committee will oversee the following key areas:

• the integrity of the Co-operative’s financial statements
• the Co-operative’s accounting policies and practices
• quality of both financial and non-financial reporting
• the performance, independence and effectiveness of the external auditor
• compliance with legal and regulatory requirements
• compliance with policy framework
• the effectiveness of internal controls
• the integrity and effectiveness of financial operations
• the framework, process and effectiveness of risk management

Audit Committee membership is confirmed annually by the Board and will be required to comprise at least three, and no more than five, members being non-executive directors and includes one independent director.

The Committee currently comprises:

• Thomas Girgensohn, Chairman (Independent Director)
• Mal Lanham (Non-executive director)
• Sue McGinn (Non-executive director)

The Chairman, Chief Executive, Chief Financial Officer and General Manager, Corporate Affairs attend by invitation.

It is a requirement that the role of client service audit partner be rotated on a regular basis. As part of the external audit process, former partners of the auditor will not be considered for appointment as Dairy Farmers directors and the appointment of ex-auditor partners to the Dairy Farmers Executive Management Team is subject to Board approval.

The group engages PricewaterhouseCoopers for services in addition to the statutory audit assignment where PricewaterhouseCoopers' expertise and knowledge of the business are important. These engagements are principally in relation to tax and strategic advice. 

RISK MANAGEMENT

The Board considers risk management to be a critical component of the Co-operative’s governance. Accordingly, the Audit Committee has risk management as part of its ongoing responsibility, and makes recommendations to the Board.

The Audit Committee oversees risk management details and the Chief Executive is responsible for ensuring that appropriate risk management systems are implemented across the Co-operative’s business.

In ensuring that risk is identified and, when necessary, the impact of any exposures are mitigated, the following primary objectives are recognised, namely:

• all major sources of potential threat are identified and analysed
• all business decisions made by Dairy Farmers identify any risk
• integrity in reporting and compliance is achieved
• the Board and senior management understand the Co-operative’s risk profile

In particular, the following areas are of major importance from a risk management perspective:

• product and market risk
• technology
• product liability
• product recall
• interruptions to supply of major goods and services
• loss of major customers
• physical risks such as fire, flood, computer systems failure
• employee safety
• environmental risks
• legislative risks
• financial risks
• quality management

HUMAN RESOURCES COMMITTEE

The Human Resources Committee has the role of providing oversight of the Co-operative’s Human Resources function notably as to policies and processes with the intention of establishing Dairy Farmers’ human resources capability as a competitive advantage.

The particular areas of the Committee’s responsibility include:

• establishing appropriate remuneration, incentives and superannuation arrangements for the Chief Executive and his direct reports
• assessing remuneration arrangements for the Board Chairman and non-executive directors for member approval
• reviewing general remuneration, superannuation and incentive policies
• management development procedures
• succession planning
• monitoring occupational health and safety programs

Membership of the Committee will consist of between three and five non-executive directors.

The Human Resources Committee currently consists of four members being:

• Simon Tregoning, Chairman (Independent Director)
• Jamie Alison (Non-executive director)
• Duncan McInnes (Non-executive director)
• Eddie Wallwork (Non-executive director)

The Chief Executive and the General Manager, Human Resources attend by invitation.

• 
• 
• 
• 
• 
• 
• 
• 

Copyright 2007-2008 Australian Co-operative Foods Limited | Privacy Policy | Terms & Conditions