Board Charter

Overview

The Board recognises that they are ultimately responsible for the operation and administration of Wide Bay Australia Ltd (Wide Bay) and for the delegation of various authorities to the Managing Director/Chief Executive Officer and Senior Management, where their performances and actions are monitored regularly by the Board. The Board is conscious of its obligations and accountability to shareholders as well as other regulatory and ethical expectations.

The Board accepts the responsibility for the overall performance of Wide Bay and for the Company to act in the best interest of all parties and have a commitment to a high level of ethical standards and corporate governance.

Responsibilities of the Board

The Board’s responsibilities include but are not limited to:-

1. the adoption and approval of relevant strategic plans;

2. oversight of Wide Bay including its control and accountability systems;

3. approval and monitoring of annual budgets;

4. appointing and removing the Chief Executive Officer or Managing Director;

5. ratifying and approving the appointment of and where appropriate the removal of the Chief Financial Officer and the Company Secretary;

6. input into the final approval of management development of corporate strategy and performance objectives;

7. reviewing and ratifying systems of risk management and internal compliance and control;

8. codes of conduct and legal compliance;

9. monitoring Senior Management’s performance and implementation of strategy and ensuring appropriate resources are available;

10. approving and monitoring the progress of major capital expenditure;

11. capital management and acquisition and divestitures;

12. approving and monitoring financial and other reporting;

13. planning for Board and executive succession;

14. appointment of External Auditors; and

15. determining dividends to be paid

Structure of the Board and Composition

The size of the Board is subject to the provisions of Wide Bay’s Constitution which currently provides for a minimum number of five and a maximum number of ten. Currently the number of Directors is six.

In considering the structure of the Board, the Directors should ensure that the structure is in such a way that it:-

has a proper understanding of and competence to deal with current and emerging issues of the business;

can effectively review and challenge the performance of management and exercise independent judgement.

The Board acknowledge that ultimately the Directors are elected by the shareholders however they have an important role to play in the selection of candidates for selection by the shareholders.

The Directors will appoint as Chairman of the Board one of the non-executive independent directors.

Directors other than the Managing Director are required to seek re-election on a rotation basis at least once every three years in accordance with the Constitution.

Board Renewal Policy

The Board adopted a Board Renewal Policy in September 2006. In adopting this policy the Directors were mindful of not only the growth of the society, but the greater scope of activities and possible future activities.

In particular these considerations include:-

growth in society's assets over the past 5 years - 61%;
establishment of Mortgage Risk Management Pty Ltd (the society captive lenders mortgage insurer which now handles all the society's LMI insurance requirements);
the acquisition of an equity in Financial Technology Securities Pty Ltd and the involvement with that company;
the recent extension of society's lending to include some limited forms of commercial lending, which will no doubt be further developed in the near future;
establishment of a selected margin loan product; and
the on-going policy of the society to seek and investigate acquisitions or mergers with other similar organisations and involvement with other businesses that is complimentary to the society's activities.

The Board Renewal Policy is:-

that over the next 2 years that up to 2 new directors will be appointed to the Board, with a view to broadening the range of qualifications of the Board;
in the case of existing directors their appointment is 'grandfathered' as in the past;
that the term of directors appointed in future will be limited to 10 years;
that the Chairman of the Board will be limited in future, to a term of 7 years; and
that the Chairman of the Audit Committee will be limited to a term of 5 years, which is consistent with the requirements for appointment of external auditors.

Independence

The majority of the Board should be independent directors as defined in the definition of independence given by Corporate Governance Principles 2.1.

The Board will regularly assess the independence of each director in the light of interests regularly disclosed by them on an annual basis. Directors are encouraged to disclose any potential interests they may have, which may be considered giving rise to conflict and should discuss the matter with the Chairman. Every director of the Board is entitled to seek independent professional advice at Wide Bay’s expense with the prior written approval of the Chairman.

Role of Chairman

The Chairman is responsible for leadership of the Board, for the efficient organisation and conduct of the Board’s functions and for the briefing of all directors in relation to issues arising at Board Meetings.

Chairman’s duty includes:-

promoting constructive and respective relationships between Board members and Board and management; and

to act as the primary councillor for the Chief Executive Officer or Managing Director

Board Meetings

The Board meets at least 11 times per annum and such other times as deemed appropriate for consideration of any issues that may become urgent or require attention between meetings.

These meetings can be held by technological means.

The external auditor shall meet with the Board as part of the full year financial accounts discussions.

Non-executive directors should meet at least once in each financial year for a discussion on Board and management issues and the effectiveness and satisfaction of information being provided by management.

Board Committees

The Board has established the following committees:-

an Audit and Risk Committee; and
a Remuneration Committee

The Chairman of the Board, while a member of the Audit and Risk Committee cannot assume the role of Chairman of the Audit and Risk Committee, which must be held by another independent non-executive director.

The three independent directors of the Board are members of the Audit and Risk Committee with the Remuneration Committee comprising the Chairman and the Managing Director.

Recommendations on remuneration from the Remuneration Committee are ratified by the full Board. The Managing Director’s salary is reviewed by the directors and takes into account his performance, contributions and experience.

Board Performance

At least once every twelve months there must be a performance evaluation of the Board and individual director’s contribution to the Board. The manner in which the performance evaluation is assessed is determined by the Chairman.