|+ Board Charter|
|+ Audit Committee Charter|
|+ Code of Conduct for Directors
and Key Executives
|+ Continuous Disclosure Policy|
|+ Share Trading Policy|
|+ Shareholder Communications
|+ Policy for Risk Management|
|+ Risk and Internal Control Policy|
|+ Corporate Governance Statement|
|+ Corporate Governance Section|
|+ Code of Ethics and Conduct|
The Board of Directors of OM Holdings Limited is responsible for its corporate governance, that is, the system by which OM Holdings Limited and its subsidiaries (“OMH Group”) is managed.
Role of the Board and Management
The Board’s role is to govern the OMH Group. In governing the OMH Group, the Directors must act in the best interests of the OMH Group as a whole. It is the role of senior management to manage the OMH Group in accordance with the direction and delegations of the Board and the responsibility of the Board to oversee the activities of management in carrying out these delegated duties.
In carrying out its governance role, the main task of the Board is to drive the performance of the OMH Group. The Board must also ensure that the OMH Group complies with all of its contractual, statutory and any other legal obligations, including the requirements of any regulatory body. The Board has the final responsibility for the successful operations of the OMH Group.
To assist the Board to carry out its functions, it has developed a Code of Conduct to guide the Directors and key executives in the performance of their roles. The Code of Conduct is detailed in Section 3.1.
The Board represents shareholders’ interests in relation to optimising its manganese mining operation located in the Northern Territory of Australia, continuing its successful metals trading business and enhancing its ferro alloy smelter operation in south west China. This fully integrated strategy seeks to achieve medium to long-term financial gains for shareholders. By adopting this approach the Board believes that this will ultimately result in the interests of all stakeholders being appropriately addressed when making business decisions.
The Board is responsible for ensuring that the OMH Group is managed in such a way to best achieve this desired result. Given the size of the OMH Group’s mining, smelter and trading activities, the Board currently undertakes an active, not passive role.
The Board is responsible for evaluating and setting the strategic directions for the OMH Group, establishing goals for management and monitoring the achievement of these goals. The Executive Chairman and Chief Executive Officer are responsible to the Board for the day-to-day management of the OMH Group.
The Board has sole responsibility for the following:
|•||Appointing and removing the Chief Executive Officer and any other executive director and approving their remuneration;|
|•||Appointing and removing the Company Secretary and approving their remuneration;|
|•||Determining the strategic direction of the OMH Group and measuring performance of management against approved strategies;|
|•||Reviewing the adequacy of resources for management to properly carry out approved strategies and business plans;|
|•||Adopting operating (including production), capital and development expenditure budgets at the commencement of each financial year and monitoring the progress by both financial and non-financial key performance indicators;|
|•||Monitoring the OMH Group’s medium term capital, exploration and cash flow requirements;|
|•||Approving and monitoring financial and other reporting to regulatory bodies, shareholders and other organisations;|
|•||Determining that satisfactory arrangements are in place for auditing the OMH Group’s financial affairs;|
|•||Appointing the external auditors of the OMH Group;|
|•||Reviewing and ratifying systems of risk management and internal compliance and control, codes of conduct and compliance with legislative requirements; and|
|•||Ensuring that policies and compliance systems consistent with the OMH Group’s objectives and best practice are in place and that the OMH Group and its officers act legally, ethically and responsibly on all matters.|
The Board’s role and the OMH Group’s corporate governance practices are being continually reviewed and improved as the OMH Group’s businesses further expand.
The Board may from time to time, delegate some of its responsibilities listed above to its senior management team.
The Chief Executive Officer is responsible for managing the operational business of the OMH Group (in accordance with the requirements of his Executive Service Agreement) under delegated authority from the Board and to implement the policies and strategy set by the Board. In carrying out his responsibilities the Chief Executive Officer must report to the Board in a timely manner and ensure all reports to the Board present a true and fair view of the OMH Group’s operational results and financial position.
The role of management is to support the Executive Chairman and Chief Executive Officer and implement the running of the general operations and financial business of the OMH Group, in accordance with the delegated authority of the Board.
Composition of the Board
To add value to the OMH Group, the Board has been formed so that it has effective composition, size and commitment to adequately discharge it responsibilities and duties. The names of the Directors and their qualifications and experience are disclosed in the Directors’ Report. Directors are appointed based on the specific governance skills required by the OMH Group and on the independence of their decision-making and judgment.
The OMH Group recognises the importance of Non-Executive Directors and the external perspective and advice that Non-Executive Directors can offer. Mr John Raubenheimer, Mr Tan Peng Chin, Mr Wong Fong Fui and Mr Thomas Teo Liang Huat are Non-Executive Directors who are considered to be independent. Ms Julie Wolseley is also a Non-Executive Director but is not viewed as independent due to her also providing company secretarial services to the OMH Group.
As the OMH Group’s activities increase in size, nature and scope the size of the Board will be reviewed and the optimum number of directors required for the Board to properly perform its responsibilities and functions will continue to be re-assessed.
The Board acknowledges it has a greater proportion of Non-Executive Directors compared to Executive Directors, with half of the current Board viewed as independent.
The Company’s current Chairman, Mr Low is considered by the Board to not be independent in terms of the ASX Corporate Governance Council’s definition of independent director.
The Board considers that Mr Low’s position as Executive Chairman is appropriate given his world wide experience and specialised understanding of the global manganese industry. However the Board believes that Mr Low has the range of skills, knowledge, and experience necessary to effectively govern the Company and understand the economic sectors in which the Company operates. In addition, it should be noted that Mr Low is a substantial and longstanding shareholder of the Company and, as such, is able to clearly identify with the interests of shareholders as a whole.
Mr Peter Ivan Toth is the OMH Group Chief Executive Officer Executive who is a full-time employee of the Company and who has the specialised experience and expertise considered of benefit to the OMH Group and its activities.
The membership of the Board, its activities and composition is subject to periodic review. The criteria for determining the identification and appointment of a suitable candidate for the Board shall include quality of the individual, background of experience and achievement, compatibility with other Board members, credibility within the OMH Group’s scope of activities, intellectual ability to contribute to Board duties and physical ability to undertake Board duties and responsibilities.
Directors are initially appointed by the full Board subject to election by shareholders at the next Annual General Meeting. Under the OM Holdings Limited Bye-laws the tenure of Directors (other than Chief Executive Officer) is subject to re-appointment by shareholders not later than the third anniversary following his/her last appointment. Subject to the requirements of the law, the Board does not subscribe to the principle of retirement age and there is no maximum period of service as a Director. A Chief Executive Officer may be appointed for any period and on any terms the Directors think fit and, subject to the terms of any agreement entered into, the Board may revoke any appointment.
Responsibilities of the Board
In general, the Board is responsible for, and has the authority to determine, all matters relating to the policies, practices, management and operations of the OMH Group. It is required to do all things that may be necessary to be done in order to carry out the objectives of the OMH Group.
Without intending to limit this general role of the Board, the principal functions and responsibilities of the Board include the following:
|•||Leadership of the OMH Group - overseeing the OMH Group and establishing codes that reflect the values of the OMH Group and guide the conduct of the Board, management and employees.|
|•||Strategy Formulation - working with senior management to set and review the overall strategy and goals for the OMH Group and ensuring that there are policies in place to govern the operation of the OMH Group.|
|•||Overseeing Planning Activities - overseeing the development of the OMH Group’s strategic plans (including operating, capital, exploration and development programmes and initiatives) and approving such plans as well as the annual budget.|
|•||Shareholder Liaison - ensuring effective communications with shareholders through an appropriate communications policy and promoting participation at general meetings of the Company.|
|•||Monitoring, Compliance and Risk Management - overseeing the OMH Group’s risk management, compliance, control and accountability systems and monitoring and directing the operational and financial performance of the OMH Group.|
|•||OMH Group Finances - approving expenses in excess of those approved in the annual budget and approving and monitoring acquisitions, divestments and financial and other reporting.|
|•||Human Resources - appointing, and where appropriate, removing the Chief Executive Officer as well as reviewing the performance of the Chief Executive Officer and monitoring the performance of senior management in their implementation of the OMH Group’s strategy.|
|•||Ensuring the Health, Safety and Well-Being of Employees - in conjunction with the senior management team, developing, overseeing and reviewing the effectiveness of the OMH Group’s occupational health and safety systems to ensure the well-being of all employees.|
|•||Delegation of Authority - delegating appropriate powers to the Chief Executive Officer to ensure the effective day-to-day management of the OMH Group and establishing and determining the powers and functions of the Committees of the Board.|
Full details of the Board’s role and responsibilities are contained in the Board Charter, a summary of which is contained on the Company’s website.
If a Director cannot or is unwilling to remove a conflict of interest then the Director must, as per law, absent himself/herself from the room when discussion and/or abstain from voting on matters about which the conflict relates.
Each member of the Board is committed to spending sufficient time to enable them to carry out their duties as a Director of the OMH Group.
In accordance with legal requirements and agreed ethical standards, Directors and key executives of the OMH Group have agreed to keep confidential, information received in the course of the exercise of their duties and will not disclose non-public information except where disclosure is authorised or legally mandated.
The Board collectively and each Director has the right to seek independent legal, accounting or other independent professional advice at the OMH Group’s expense, up to specified limits, to assist them to carry out their responsibilities. Directors are entitled to.
Subject to the Directors’ Conflict of Interest Guidelines referred to in Section 1.4.1 above, Directors have direct access to members of the Company’s management and to Company information in the possession of management.
Related party transactions include any financial transaction between a Director and the OMH Group. Unless there is an exemption under the Bermuda Companies Act or the Corporations Act or any other relevant laws from the requirement to obtain shareholder approval for the related party transaction, the Board cannot approve the transaction.
‘Inside information’ is information that:
If an employee (including Directors) possesses inside information, the person must not:
This prohibition applies regardless of how the employee or Director learns the information (eg. even if the employee or Director overhears it or is told in a social setting).
In addition to the above, Directors must notify the Company Secretary as soon as practicable, but not later than 2 business days, after they have bought or sold the Company’s securities or exercised options. In accordance with the provisions of the Corporations Act and the ASX Listing Rules, the Company on behalf of the Directors must advise the ASX of any transactions conducted by them in the securities of the Company.
Breaches of this policy will be subject to disciplinary action, which may include termination of directorship.
OMH’s Policy for Trading in Company Securities applies to all Directors and employees. This policy provides a brief summary of the law on insider trading and other relevant laws, sets out the restrictions on dealing in securities by people who work for, or are associated with, OMH and is intended to assist in maintaining market confidence in the integrity of dealings in the Company’s securities.
The policy stipulates that the only appropriate time for a Director or employee to deal in the company’s securities is when they are not in possession of price sensitive information that is not generally available to the market. A Director wishing to deal in the Company’s securities may only do so after first having advised the Chairman of his or her intention. A key executive wishing to deal must first notify the CEO.
Non-executive directors are encouraged to have a minimum holding of shares in OMH equivalent in value to one year of the base fees for non-executive directors and which should be acquired within four years of appointment or significant remuneration change.
It is a condition of the Policy for Trading in Company Securities that Directors, and executives participating in an equity based incentive plan, are prohibited from entering into any transaction which would have the effect of hedging or otherwise transferring to any person the risk of any fluctuation in the value of any unvested entitlement in OMH securities. This prohibition is also contained in the terms of the OM Holdings Limited Employee Share Option Plan.
A copy of the Policy for Trading in Company Securities is available in the corporate governance section of OMH website.
In accordance with the Board’s policy, the Chief Executive Officer and Chief Financial Officer made the attestations recommended by the ASX Corporate Governance Council as to the OMH Group’s financial condition prior to the Board signing this Annual Report.
Save for the Committees mentioned in sections 2.1 and 2.2 below, the Board considers that the OMH Group is not currently of a size, nor are its affairs of such complexity to justify the formation of numerous special committees at this time. The Board as a whole is able to address the governance aspects of the full scope of the OMH Group’s activities and to ensure that it adheres to appropriate ethical standards.
The Board has however established a framework for the management of the OMH Group including a system of internal controls, a business risk management process and the establishment of appropriate ethical standards.
The full Board currently holds meetings at such times as may be necessary to address any general or specific matters as required.
If the OMH Group’s activities increase in size, scope and nature, the appointment of separate or special committee’s will be reviewed by the Board and implemented if appropriate.
To ensure the integrity of the financial statements of the OMH Group and the independence of the external auditor, an audit committee has been formally established. The audit committee comprises Mr Thomas Teo Liang Huat, Ms Julie Wolseley and Mr John Raubenheimer.
The audit committee is responsible for reviewing the audited annual and audit reviewed half-yearly financial statements and any reports which accompany published financial statements.
The Board in conjunction with the audit committee considers the appointment of the external auditor and reviews the appointment of the external auditor, their independence, the audit fee and any questions of resignation or dismissal.
The Board is also responsible for establishing policies on risk oversight and management.
The role of the Audit Committee is to assist the Board to meet its oversight responsibilities in relation to the company’s financial reporting, compliance with legal and regulatory requirements, internal control structure, risk management procedures and the external audit function.
Key activities undertaken by the Audit Committee include:
Members of the Audit Committee and their qualifications are outlined in the Directors’ Report.
The Audit Committee Charter is available on the OMH website.
The Remuneration Committee reviews and makes recommendations to the Board on remuneration policies applicable to executive officers and Directors of the OMH Group. The remuneration committee comprises Mr Tan Peng Chin, Ms Julie Wolseley and Mr Thomas Teo Liang Huat.
The role of the Remuneration Committee is to assist the Board in establishing human resources and compensation policies and practices which:
The remuneration committee works with the Board on areas such as setting policies for senior officers’ remuneration, setting the terms and conditions of employment for the Executive Chairman and the Chief Executive Officer, reviewing superannuation arrangements, reviewing the remuneration of Non-Executive Directors and undertaking an annual review of the Chief Executive Officer’s performance, including, setting with the Chief Executive Officer goals for the coming year and reviewing progress in achieving those goals.
The OMH Group is committed to remunerating its senior executives in a manner that is market competitive and consistent with best practice as well as supporting the interests of shareholders. The Board also administers the OM Holdings Limited Employee Share Option Plan approved by shareholders on 25 May 2007.
Consequently, the remuneration of a senior executive may be comprised of the following:
By remunerating senior executives through performance and long-term incentive plans in addition to their fixed remuneration the OMH Group aims to align the interests of senior executives with those of shareholders and increase OMH Group performance.
The objective behind using this remuneration structure is to drive improved OMH Group performance and thereby increase shareholder value as well as aligning the interests of executives and shareholders.
Non-Executive Directors are paid their fees out of the maximum aggregate amount approved by shareholders for the remuneration of Non-Executive Directors.
Non-Executive Directors are entitled to statutory superannuation.
The annual aggregate amount of remuneration paid to Non-Executive Directors was approved by shareholders and is currently $750,000.
The OMH Group does not have a nomination committee because it would not be a more efficient mechanism than the full Board for focusing the OMH Group on specific issues.
The responsibilities of the Board in its entirety include devising criteria for Board membership, regularly reviewing the need for various skills and experience on the Board and identifying specific individuals for nomination as Directors for review by the Board. The Board also oversees management succession plans including the Chief Executive Officer and his direct reports and evaluates the Board’s performance and makes recommendations for the appointment and removal of Directors.
Directors are appointed based on the specific governance skills required by the OMH Group. Given the size of the OMH Group and the business that it operates, the OMH Group aims at all times to have at least one Director with experience in the metals trading and mining industries, appropriate to the OMH Group’s market. In addition, Directors should have the relevant blend of personal experience in:
The Board acknowledges the need for continued maintenance of the highest standard of corporate governance practice and ethical conduct by all Directors and employees of the OMH Group.
Code of Conduct for Directors and Key Executives
The Board has adopted a Code of Conduct for Directors and key executives to promote ethical and responsible decision-making. The code is based on a code of conduct for Directors prepared by the Australian Institute of Company Directors.
In accordance with legal requirements and agreed ethical standards, Directors and key executives of the OMH Group:
|•||will act honestly, in good faith and in the best interests of the OMH Group;*|
|•||owe a fiduciary duty to the OMH Group as a whole;|
|•||have a duty to use due care and diligence in fulfilling the functions of office and exercising the powers attached to that office;*|
|•||will undertake diligent analysis of all proposals placed before the Board;|
|•||will act with a level of skill expected from directors and key executives of a publicly listed company;|
|•||will use the powers of office for a proper purpose, in the best interests of the OMH Group as a whole;*|
|•||will demonstrate commercial reasonableness in decision making;|
|•||will not make improper use of information acquired as Directors and key executives;*|
|•||will not disclose non-public information except where disclosure is authorised or legally mandated;+|
|•||will keep confidential, information received in the course of the exercise of their duties and such information remains the property of the OMH Group from which it was obtained and it is improper to disclose it, or allow it to be disclosed, unless that disclosure has been authorised by the person from whom the information is provided, or is required by law;*|
|•||will not take improper advantage of the position of Director* or use the position for personal gain or to compete with the OMH Group;+|
|•||will not take advantage of OMH Group property or use such property for personal gain or to compete with the OMH Group;+|
|•||will protect and ensure the efficient use of the OMH Group assets for legitimate business purposes;+|
|•||will not allow personal interests, or the interests of any associated person, to conflict with the interests of the OMH Group;*|
|•||have an obligation to be independent in judgment and actions, and Directors will take all reasonable steps to be satisfied as to the soundness of all decisions of the Board;*|
|•||will make reasonable enquiries to ensure that the OMH Group is operating efficiently, effectively and legally towards achieving its goals;|
|•||will not engage in conduct likely to bring disrepute upon the OMH Group;*|
|•||will encourage fair dealing by all employees with the OMH Group’s suppliers, competitors and other employees;+|
|•||will encourage the reporting of unlawful/unethical behaviour and actively promote ethical behaviour and protection for those who report violations in good faith;+|
|•||will give their specific expertise generously to the OMH Group;|
|•||have an obligation, at all times, to comply with the spirit, as well as the letter of the law and with the principles of this Code.*|
|* From the AICD Code of Conduct
+ From the ASX Corporate Governance Council’s Principles of Good Corporate Governance
Code of Ethics and Conduct
The OMH Group has implemented a Code of Ethics and Conduct, which provides guidelines aimed at maintaining high ethical standards, corporate behaviour and accountability within the OMH Group.
All Directors and employees are expected to:
|•||respect the law and act in accordance with it;|
|•||respect confidentiality and not misuse OMH Group information, assets or facilities;|
|•||value and maintain professionalism;|
|•||avoid real or perceived conflicts of interest;|
|•||act in the best interests of shareholders;|
|•||by their actions contribute to the OMH Group’s reputation as a good corporate citizen which seeks the respect of the community and environment in which it operates;|
|•||perform their duties in ways that minimise environmental impacts and maximise workplace safety;|
|•||exercise fairness, courtesy, respect, consideration and sensitivity in all dealings within their workplace and with customers, suppliers and the public generally;|
|•||act with honesty, integrity, decency and responsibility at all times|
An employee that breaches the Code of Ethics and Conduct may face disciplinary action. If an employee suspects that a breach of the Code of Ethics and Conduct has occurred or will occur, he or she must advise that breach to management. No employee will be disadvantaged or prejudiced if he or she reports in good faith a suspected breach. All reports will be acted upon and kept confidential.
As part of its commitment to recognising the legitimate interests of stakeholders, the OMH Group has established the Code of Ethics and Conduct to guide compliance with legal and other obligations to legitimate stakeholders. These stakeholders include employees, customers, government authorities, creditors and the community as whole. This Code includes the following.
Responsibilities to Shareholders and the Financial Community Generally
The OMH Group complies with the spirit as well as the letter of all laws and regulations that govern shareholders’ rights. The OMH Group has processes in place designed to ensure the truthful and factual presentation of the OMH Group’s financial position and prepares and maintains its accounts fairly and accurately in accordance with the generally accepted accounting and international financial reporting standards.
The OMH Group endeavours to provide a safe workplace in which there is equal opportunity for all employees at all levels of the OMH Group. The OMH Group does not tolerate the offering or acceptance of bribes or the misuse of OMH Group assets or resources.
Responsibilities to the Community
As part of the community the OMH Group:
Responsibility to the Individual
The OMH Group is committed to keeping private information confidential which has been provided by employees and investors and protect it from uses other than those for which it was provided.
Conflicts of Interest
Employees and Directors must avoid conflicts as well as the appearance of conflicts between personal interests and the interests of the OMH Group.
How the OMH Group Monitors and Ensures Compliance with its Code
The Board, management and all employees of the OMH Group are committed to implementing this Code of Ethics and Conduct and each individual is accountable for such compliance.
Disciplinary measures may be imposed for violating the Code.
Continuous Disclosure to ASX
The Continuous Disclosure Policy requires all executives and Directors to inform the Chief Executive Officer or in his absence the Company Secretary of any potentially material information as soon as practicable after they become aware of that information.
Information is material if it is likely that the information would influence investors who commonly acquire securities on ASX in deciding whether to buy, sell or hold the Company’s securities.
Information is not material and need not be disclosed if:
|•||A reasonable person would not expect the information to be disclosed or is material but due to a specific valid commercial reason is not to be disclosed; and|
|•||The information is confidential; or|
|•||One of the following applies:|
It would breach a law or regulation to disclose the information;
|The information concerns an incomplete proposal or negotiation;|
|The information comprises matters of supposition or is insufficiently definite to warrant disclosure;|
|The information is generated for internal management purposes;|
|The information is a trade secret;|
|It would breach a material term of an agreement, to which the OMH Group is a party, to disclose the information;|
|It would harm the OMH Group’s potential application or possible patent application; or|
|The information is scientific data that release of which may benefit the OMH Group’s potential competitors.|
The Chief Executive Officer is responsible for interpreting and monitoring the OMH Group’s disclosure policy and where necessary informing the Board. The Company Secretary is responsible for all communications with ASX.
Communication with Shareholders
The Company places considerable importance on effective communications with shareholders. Directors recognise that shareholders, as the ultimate owners of the company, are entitled to receive timely and relevant high quality information about their investment. Similarly, prospective new investors are entitled to be able to make informed investment decisions when considering the purchase of shares.
The Company aims to communicate with shareholders and other stakeholders in an open, regular and timely manner so that the market has sufficient information to make informed investment decisions on the operations and results of the OMH Group. The strategy provides for the use of systems that ensure a regular and timely release of information about the OMH Group is provided to shareholders.
OMH Group’s Continuous Disclosure and Market Communications Policy encourages effective communication with its shareholders by requiring:
The Board encourages full participation of shareholders at the Annual General Meeting to ensure a high level of accountability and understanding of the OMH Group’s strategy and goals. Copies of the addresses by the Chairman and CEO are disclosed to the market and posted to the company’s website.
The Company’s external auditor attends the company’s AGM to answer shareholder questions about the conduct of the audit, the preparation and content of the audit report, the accounting policies adopted by the Company and the independence of the auditor in relation to the conduct of the audit.
OMH’s significant briefings with major institutional investors and analysts, are lodged with the ASX and are made available on OMH’s website. Presentation material from significant briefings or management speeches is also lodged with ASX and posted to the website.
Approach to Risk Management and Internal Control
The Board recognises that risk management and internal compliance and control are key elements of good corporate governance.
The OMH Group’s Risk and Internal Control policy describes the manner in which OMH:
OMH considers that effective risk management is about achieving a balanced approach to risk and reward. Risk management enables the company to capitalise on potential opportunities while mitigating potential adverse effects. Both mitigation and optimisation strategies are considered equally important in risk management.
Risk Management Roles and Responsibilities
The Board is responsible for reviewing and approving OMH risk management strategy, policy and key risk parameters, including determining the Group’s appetite for country risk and major investment decisions.
The Board is also responsible for satisfying itself that management has developed and implemented a sound system of risk management and internal control. The Board has delegated oversight of the risk and internal control policy, including review of the effectiveness of OMH’s internal control framework and risk management process, to the key Executive Management team in conjunction with the Board.
Management is responsible for designing, implementing, reviewing and providing assurance as to the effectiveness of the policy. This responsibility includes developing business and functional risk identification, specific risk treatment, controls, monitoring and reporting capability. Within each major business and functional area there is a designated operational risk and assurance person, with specific responsibilities designed to guide compliance and reporting.
Each business unit has a risk management section within its annual business plan, and these plans are discussed at regular performance reviews. In addition each business unit reports annually to the Board on its business plan, risk profile and management of risk.
The Board is responsible for the oversight of the OMH Group’s risk management and control framework. Responsibility for control and risk management is delegated to the appropriate level of management within the OMH Group with the Chief Executive Officer and Chief Financial Officer having ultimate responsibility to the Board for the risk management and control framework.
Integrity of Financial Reporting
The OMH Group’s Chief Executive Officer and Chief Financial Officer report in writing to the Board that:
Role of External Auditor
The OMH Group’s practice is to invite the auditor to attend the Annual General Meeting and be available to answer shareholder questions about the conduct of the audit and the preparation and content of the auditor’s report.
The Board seeks to ensure that ensure that the appointment of the external auditor is limited to maintaining the independence of the external auditor and to assess whether the provision of any non-audit services by the external auditor that may be proposed is appropriate.
The services considered not acceptable for provision by the external auditor include:
The Board has adopted a self-evaluation process to measure its own performance during each financial year. Also, an annual review is undertaken in relation to the composition and skills mix of the Directors.
Arrangements put in place by the Board to monitor the performance of the OMH Group’s Executive Directors and senior executives include:
The performance of each Director retiring at the next Annual General Meeting is taken into account by the Board in determining whether or not the Board should support the re-election of the Director.
Non-Executive Director’s must retire at the third Annual General Meeting following their lection or most recent re-election. At least one Non-Executive Director must stand for election at each Annual General Meeting. Any Director appointed to fill a casual vacancy since the date of the previous Annual General Meeting must submit themselves to Shareholders for election at the next Annual General Meeting.
Board support for a Director’s re-election is not automatic and is subject to satisfactory Director performance.
The Remuneration Committee reviews and makes recommendations to the Board on the criteria for and the evaluation of, the performance of the Executive Chairman and the Chief Executive Officer.
The OMH Group’s remuneration policy aims to reward executives fairly and responsibly in accordance with the international market and ensure that OMH:
Executive remuneration is reviewed annually having regard to individual and business performance (compared against agreed financial and non-financial performance measures set at the start of the year), relevant comparative information and expert advice from both internal and independent external sources.
Remuneration consists of the following key elements:
The operational targets for the Executive Directors and Senior Executives consist of a number of key performance indicators including safety, production, operating expenditure, return to shareholders’ funds, enhancing corporate credibility and creation of value for shareholders.
At the end of the calendar year the Board assesses the actual performance of the consolidated entity and individual against the key performance indicators previously set. Any cash incentives and/or options granted require Board approval. Options proposed to be granted to any Directors also require shareholder approval.