Rex has adopted comprehensive systems of control and accountability as the basis for the administration of corporate governance. The Board is committed to administering the policies and procedures with openness and integrity, pursuing the true spirit of corporate governance commensurate with Rex’s needs. To the extent they are applicable, Rex has adopted the Principles of Good Corporate Governance Recommendations incorporating the 2010 Amendments as published by ASX Corporate Governance Council. As Rex’s activities develop in size, nature and scope, the size of the Board and implementation of additional corporate governance structures will be given further consideration.
In addition to this and consistent with ASX Listing Rule requirements, Rex has a policy concerning trading in its shares by Directors and other designated persons. A copy of that Trading Policy is available on Rex’s website.
1 Lay solid foundations for management and oversight
1.1 Companies should establish the functions reserved to the Board and those delegated to senior executives and disclose those functions.
The Board recognises the importance of distinguishing between the respective roles and responsibilities of the Board and management. The respective roles and responsibilities of the Board and the Managing Director are set out in Rex’s Board Charter.
The primary responsibility of the Board is to protect and advance the interest of Shareholders. To fulfil this role, the Board has overall responsibility for developing and approving Rex’s corporate strategy and monitoring implementation of the strategy, appointing the Managing Director, monitoring senior executives’ performance and approving Rex’s risk and audit framework. The Board is also responsible for Rex’s general corporate governance matters, including matters such as disclosures and the appointment and monitoring of any committees set up by the Board.
The Managing Director has primary responsibility to the Board for the affairs of Rex. The Managing Director’s responsibilities include implementing and monitoring (together with the Board) the strategic and financial plans for Rex, managing the appointment of senior executive positions, being the primary channel of communication and point of contact between the senior executives and the Board, providing strong leadership to, and effective management of, Rex and otherwise carrying out the day to day management of Rex.
This recommendation is also satisfied in as much as should a new Director be appointed, Rex’s Board Charter and other corporate governance documentation together with updated financial statements will be given to the new Directors together with a formal letter of appointment which will set out details in respect of, amongst other matters:
- Rex’s financial, strategic, operational and risk management position;
- each Director’s rights, duties and responsibilities; and
- the role of the Board and senior executives.
1.2 Companies should disclose the process for evaluating the performance of senior executives.
Rex’s goals for the year are set out in the Annual Report and these are used as the basis for evaluating performance of senior executives. Performance evaluations are undertaken annually, in June, by the Managing Director. The Managing Director’s performance evaluation is also undertaken annually, in June, by the Board.
1.3 Companies should provide the information indicated in the Guide to reporting on Principle 1.
It is intended that:
- an explanation of any departure from Recommendations 1.1, 1.2 or 1.3 will be included in the corporate governance statement in the Annual Report; and
- the Annual Report will disclose whether a performance evaluation for senior executives has taken place in the reporting period and whether it was in accordance with the process disclosed.
2 Structure the Board to add value
2.1 A majority of the Board should be independent Directors.
This recommendation is satisfied.
2.2 The Chair should be an independent Director.
This recommendation is satisfied.
2.3 The roles of Chair and Chief Executive Officer should not be exercised by the same individual.
This recommendation is satisfied.
2.4 The Board should establish a nomination committee.
The Board has not adopted a charter relevant to the specific functions of a nomination committee. Given the size of Rex and the Board, the Directors consider that any efficiencies achieved by the establishment of a nomination committee would be minimal, thereby not making its establishment cost effective. Rex has Board processes in place which raise issues that would otherwise be considered by a nomination committee.
2.5 Companies should disclose the process for evaluating the performance of the Board, its committees and individual Directors.
The Directors consider that due to the size of Rex and its Board, such a formal review procedure is not appropriate at this point in time and has instead adopted a self evaluation process to measure its own performance. This recommendation is satisfied in as much as the details have been included in the Annual Report and the Board Charter.
2.6 Companies should provide the information indicated in the Guide to reporting on Principle 2.
The following material is included in the Annual Report:
- the skills, experience and expertise relevant to the position of Director held by each Director in office at the date of the Annual Report;
- the names of the Directors considered by the Board to constitute independent Directors and Rex’s materiality thresholds;
- the existence of any of the relationships listed in Box 2.1 of the Guide (regarding director independence) and an explanation of why the Board considers a Director to be independent, notwithstanding the existence of those relationships;
- a statement as to whether there is a procedure agreed by the Board for Directors to take independent professional advice at the expense of Rex;
- a statement as to the mix of skills and diversity for which the Board is looking to achieve in membership of the Board;
- the period of office held by each Director in office at the date of the Annual Report;
- whether a performance evaluation for the Board, its committees and directors has taken place in the reporting period and whether it was in accordance with the process disclosed; and
- an explanation of any departures from Recommendations 2.1, 2.2, 2.3, 2.4, 2.5 or 2.6.
The following material is publicly available on Rex’s website in a clearly marked corporate governance section:
- the Board’s policy and procedure for the selection and appointment of directors.
3 Promoting ethical and responsible decision making
3.1 Companies should establish a code of conduct and disclose the code or a summary of the code as to:
- the practices necessary to maintain confidence in the Company’s integrity;
- the practices necessary to take into account their legal obligations and the reasonable expectations of their stakeholders; and
- the responsibility and accountability of individuals for reporting and investigating reports of unethical practices.
This recommendation is satisfied. Rex’s Code of Conduct sets out Rex’s expectations for the conduct of Rex’s Directors, senior executives and employees, including in relation to business conduct, personal and professional conduct (such as confidentiality, personal behaviour and respect for others).
3.2 Companies should establish a policy concerning diversity and disclose the policy or a summary of that policy. The policy should include requirements for the Board to establish measurable objectives for achieving gender diversity and for the Board to assess annually both the objectives and progress in achieving them.
This recommendation is satisfied. Rex’s Code of Conduct sets out Rex’s policy concerning diversity. In summary, Rex’s policy concerning diversity is as follows:
Rex recognises that diversity is an economic driver of competitiveness for companies and it strives to promote an environment and culture conducive to the appointment of well qualified persons so that there is appropriate diversity to maximise the achievement of corporate goals. The objectives for achieving diversity are included in the corporate governance statement in the Annual Report. In order to promote gender diversity, Rex will engage in reviews and reporting to the Board about the proportion of women at Rex and strategies to address diversity. Rex intends to recruit the most qualified persons for each position and considers persons from a diverse pool of qualified candidates.
3.3 Companies should disclose in each Annual Report the measurable objectives for achieving gender diversity set by the Board in accordance with the diversity policy and progress towards achieving them.
The objectives for achieving diversity are included in the corporate governance statement in the Annual Report.
3.4 Companies should disclose in each annual report the proportion of women employees in the whole organisation, women in senior executive positions and women on the Board.
This recommendation is satisfied. At 30 June 2011, women made up 28% of the total workforce; and 38% of senior executives. There are currently no women on the Board of Rex.
3.5 Companies should provide the information indicated in the Guide to reporting on Principle 3.
The following material is publicly available on Rex’s website in a clearly marked corporate governance section:
- any applicable code of conduct which incorporates the diversity policy.
4 Safeguard integrity in financial reporting
4.1 The Board should establish an Audit Committee.
This recommendation is satisfied.
4.2 The Audit Committee should be structured so that it:
- Consists only of non-executive Directors;
- Consists of a majority of independent Directors;
- Is chaired by an independent Chair who is not chair of the Board;
- Has at least 3 members.
The members of the Audit Committee are Alister Maitland, Paul Chapman, and Richard Laufmann, who are all independent Directors. Alister Maitland is an independent Chair of the Audit Committee (and he is not Chair of the Board). The Directors consider that the Audit Committee is of sufficient size, independence and technical expertise to discharge its mandate effectively.
4.3 The Audit Committee should have a formal charter.
This recommendation is satisfied.
4.4 Companies should provide the information indicated in the Guide to reporting on Principle 4.
The following material is included in the corporate governance statement in the Annual Report:
- the names and qualifications of those appointed to the audit committee and their attendance at meetings of the committee, or, where a company does not have an audit committee, how the functions of an audit committee are carried out
- the number of meetings of the audit committee (contained within the Directors’ Report)
- explanation of any departures from Recommendations 4.1, 4.2, 4.3 or 4.4.
The following material is made publicly available on Rex’s website in a clearly marked corporate governance section:
- the audit committee charter, including information on procedures for the selection and appointment of the external auditor, and for the rotation of external audit engagement partners.
5 Make timely and balanced disclosure
5.1 Companies should establish written policies designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior executive level for that compliance and disclose those policies or a summary of those policies.
This recommendation is satisfied. Rex has established written policies and procedures designed to ensure compliance with ASX Listing Rule disclosure requirements and accountability for compliance. Rex’s Continuous Disclose Policy sets out Rex’s policies and procedures with regard to the reporting of material price sensitive information to the ASX subject to confidentiality carve-out aspects and Rex’s procedures in this regard.
5.2 Companies should provide the information indicated in the Guide to reporting on Principle 5.
An explanation of any departures from Recommendations 5.1 or 5.2 are included in the corporate governance statement in the Annual Report. The policies or a summary of those policies designed to guide compliance with Listing Rule disclosure requirements are publicly available on Rex’s website in a clearly marked corporate governance section.
6 Respect the rights of shareholders
6.1 Companies should design and disclose a communications policy for promoting effective communication with shareholders and encouraging their participation at general meetings and disclose their policy or a summary of that policy.
Rex places a high priority on communications with its Shareholders. Although Rex does not have a standalone communications policy, Rex considers that its Continuous Disclosure Policy, together with disclosure through the following means, should be sufficient to promote effective communications with shareholders:
- announcements released through to the ASX company announcements platform;
- notices of meetings to shareholders; and
- provision of all relevant documentation released on Rex’s website.
6.2 Companies should provide the information indicated in the Guide to reporting on Principle 6.
An explanation of any departure from Recommendations 6.1 or 6.2 are included in the corporate governance statement in the Annual Report.
Rex describes its communication policy with Shareholders in the corporate governance statement in the Annual Report.
7 Recognise and manage risk
7.1 Companies should establish policies for the oversight and management of material business risks and disclose a summary of those policies.
Although there is no standalone risk management policy, the Board Charter provides that it is the Board’s responsibility to approve Rex’s risk and audit framework, systems of risk management and internal control, as well as approving compliance with any risk and audit policies and protocols in place at the time.
Rex Management has reported to the Board under Recommendation 7.2 on risk management.
7.2 The Board should require management to design and implement the risk management and internal control system to manage the Company’s material business risks and report to it on whether those risks are being managed effectively. The Board should disclose that management has reported to it as to the effectiveness of the Company’s management of its material business risks.
This recommendation is satisfied.
7.3 The Board should disclose whether it has received assurance from the chief executive officer (or equivalent) and the chief financial officer (or equivalent) that the declaration provided in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks.
This recommendation is satisfied.
7.4 Companies should provide the information indicated in the Guide to reporting on Principle 7.
The following material is included in the corporate governance statement in the Annual Report:
- explanation of any departures from Recommendations 7.1, 7.2, 7.3 or 7.4;
- whether management has reported to the Board under Recommendation 7.2; and
- whether the Board has received assurance from the chief executive officer (or equivalent) and the chief financial officer (or equivalent) under Recommendation 7.3.
8 Remunerate fairly and responsibly
8.1 The Board should establish a Remuneration Committee.
This recommendation is satisfied.
8.2 The remuneration committee should be structured so that it consists of a majority of independent directors, is chaired by an independent director and has at least three members.
The members of the Remuneration Committee are Richard Laufmann, Paul Chapman and Alister Maitland, who are all independent Directors. Richard Laufmann is an independent Chair of the Remuneration Committee (and he is not Chair of the Board). The Directors consider that the Remuneration Committee is of sufficient size, independence and technical expertise to discharge its mandate effectively.
8.3 Companies should clearly distinguish the structure of Non-Executive Director’s remuneration from that of Executive Directors and senior executives.
This recommendation is satisfied.
8.4 Companies should provide the information indicated in the Guide to reporting on Principle 8.
The following material or a clear cross-reference to the location of the material is included in the corporate governance statement in the Annual Report or elsewhere in the Annual Report (as appropriate):
- the names of the members of the remuneration committee and their attendance at meetings of the committee, or where the company does not have a remuneration committee, how the functions of a remuneration committee are carried out.
- the existence and terms of any schemes for retirement benefits, other than superannuation, for non-executive directors; and
- an explanation of any departures from Recommendations 8.1, 8.2, 8.3 or 8.4.
