Corporate Governance
Governance remains an important priority for the Board of Directors.
The Company has reviewed all the ASX Corporate Governance Council’s principles and best practice recommendations and it is the Board’s intention for the Company to adopt the principles and recommendations, where it is practicable. In each section below comments are made in relation to each ASX Corporate Governance Council principle and actions the Company is taking to ensure it delivers on it obligation to best practice corporate governance or why the Board does not consider it appropriate to adopt the practice at this time.
Principle 1: Lay solid foundations for management and oversight
The responsibilities of the Board are as follows:
- Oversight of the Company, including its control and accountability systems
- Appointing and removing the Chairman
- Appointing and removing the Chief Executive Officer
- Ratifying the appointment and, where appropriate, the removal of the CFO and the Company Secretary.
- Input into a final approval of management’s development of corporate strategy and performance objectives.
- Reviewing and ratifying systems of risk management and internal compliance and control, codes of conduct and legal compliance.
- Monitoring senior management’s performance and implementation of strategy and ensuring the appropriate resources are available.
- Approving and monitoring the progress of major capital expenditure, capital management and acquisitions and divestitures and dividend policy.
Principle 2: Structure the Board to add value
The Board size and composition is subject to limits imposed by the Company’s Constitution. The Constitution provides for a minimum of three directors and a maximum of twelve. At present the Board has four Directors.
The Board continually assesses its membership and makes appointments to complement and enhance the existing skill base of the Board. The Board has not established a separate nominations committee. The current size of the Board enables all Directors to actively participate in the assessment of potential Board members. The Board has a policy of enabling Directors to seek independent professional advice at the Company’s (reasonable) expense and this advice, if appropriate, will be shared with other Directors. The board had intended to formally review its performance, however due to the changes in the Board during the year the assessment process has not occurred. The Board intends to implement a formal assessment process during the coming year.
Principle 3: Promote ethical and responsible decision making
Acuvax Limited has an established Code of Conduct which formally represents the ethical behaviour of all members of the Company including Directors, Executives and all employees. Avantogen also has a detailed policy on trading Company shares. At present, with the current size of the Company all requests for trading in Company shares by Officers and emloyees are forwarded to the Board for approval.
Principle 4: Safeguard integrity in financial reporting
Due to the nature of the Company, the size of the Board and changes during the year, the full Board has taken the responsibility of managing the Audit, Risk and Compliance. Although there is no formal Committee the Board as a whole considers the tasks below. The role and responsibilities of an Audit, Risk and Compliance Committee preformed by the full board include:
- Reviewing the annual audit plan with the external auditor;
- Reviewing the Group’s accounting and financial reporting practices, including the effect of changes in accounting standards and practices, ASX listing requirements and corporate legislation;
- Reviewing significant transactions which are not a normal part of the Group’s business;
- Reviewing half-year and full-year accounts;
- Receiving and reviewing significant Group audit reports;
- Reviewing the performance of the external auditor and proposing changes where considered necessary;
- Reviewing and approving Management’s use of auditors to provide consulting and other services beyond their core audit activities;
- Receiving and reviewing reports on the Group’s risk management activities; and
- Considering any other financial matters of the Group which the Board determines is desirable. The independence of the external auditor in charge of the Acuvax audit is maintained through rotation of the audit partner every five years (appointed 2007). The auditor annually provides a letter to the Company confirming its independence within the meaning of applicable legislation and professional standards. Management accountability is underpinned through the requirement for the CEO and CFO to state in writing that the Company’s financial reports present a true and fair view, in all material respects, of the Company’s financial condition and operational results and are in accordance with relevant accounting standards.
Principle 5: Make timely and balanced disclosure
Avantogen has an established practice of providing relevant and timely information to shareholders. Continuous Disclosure is a standard agenda item at all Board meetings and the Company makes regular announcements to the market on commercial activities, which may have an influence on the share price. Presentations that are made to analysts or investors are posted on the Company’s website. Presentations and all other announcements are sent to the ASX prior to the release into the public domain. The Chief Executive Officer or Company Secretary, are responsible for communication with the ASX.
Principle 6: Respect the right of shareholders
The Company endeavours to keep its shareholders fully informed of matters likely to be of interest to them. It does this through:
- Reports to the ASX and the press
- Half-yearly and yearly results announcements
- Annual Reports, and
- Information provided to analysts
All of the above are available on the Acuvax website and shareholders are encouraged to contact Acuvax to provide their email addresses to enable them to receive reports and announcements without delay. The Company welcomes questions from shareholders at any time and these will be answered within the confines of information that is not market sensitive or already is in the public domain.
The external auditor in charge of the Acuvax audit is available to answer shareholders questions in relation to the conduct of the audit at the Company’s annual general meeting.
Principle 7: Recognise and manage risk
Due to the changes in the Board, the full Board now considers the management of risk. There was no formal risk review process during the prior year. Due to the nature of our business the Company is very aware of risk and each current project and proposed business opportunity is evaluated on financial and particularly medical and scientific grounds by the Scientific and Medical Advisory Board. The Chief Financial Officer presents the annual insurance policies of the Company for consideration by the Board and annually report on the internal control environment within the Company.
Principle 8: Encourage enhanced performance
The structure of the Board has not been in place for a long enough period for a review to take place. It is the Board’s intention to conduct a formal review during the coming year.
Principle 9: Remunerate fairly and responsibly
Until the size of the board and activities of Company warrant the establishment of a Remuneration Committee the full board considers remuneration issues. During the year an independent advisor had reviewed the remuneration framework in relation to long term incentives for the non-executive chairman, Chief Executive Officer and senior management and deemed them to be reasonable for the industry sector in which the Company operated.
Principle 10: Recognise the legitimate interests of stakeholders
The Code of Conduct formally documents the Company’s approach to all stakeholders. The Company expects all its Directors and employees to act appropriately and in accordance with the code. The Company does not make any political donations but supports industry bodies and registered charities within the industry the Company operates.
