Since the introduction of the ASX Principles of Good Corporate Governance and Best Practice Recommendations (“ASX Guidelines”), Rockeby Biomed Limited (“Company”) has made it a priority to adopt systems of control and accountability as the basis for the administration of corporate governance. Some of these policies and procedures are summarised in this report. Commensurate with the spirit of the ASX Guidelines, the Company has followed each Recommendation where the Board has considered the Recommendation to be an appropriate benchmark for corporate governance practices, taking into account factors such as the size of the Company and the Board, resources available and the activities of the Company. Where, after due consideration, the Company’s corporate governance practices depart from the Recommendations, the Board has offered full disclosure of the nature of, and reason for, the adoption of its own practice.
Further information about the Company’s corporate governance practices is set out on the Company’s website at www.rockeby.com. In accordance with the recommendations of the ASX, information published on the Company’s website includes charters (for the board and its sub-committees), codes of conduct and other policies and procedures relating to the board and its responsibilities.
EXPLANATIONS FOR DEPARTURES FROM BEST PRACTICE RECOMMENDATIONS
Shortly before the end of the reporting period, the Company adopted comprehensive documentation for the administration of corporate governance. Therefore, as at the end of the Reporting Period, the Company complies with each of the ASX Guidelines.
For a portion of the reporting period the Company did not comply with the following ASX Guidelines:
Principle 2 Recommendation 2.1: The majority of the Board should be independent directors
Notification of Departure: Up until April 2006, the board did not have a majority of independent directors.
Explanation for Departure: At the time, the Board’s composition was considered adequate for the Company’s current size and operations and included an appropriate mix of skills and expertise relevant to the Company’s business. During the reporting period there were changes to the Board and from April 2006 the majority of the Board was independent.
Prior to the adoption of formal corporate governance documentation, the Company did not comply with the following recommendations:
Recommendation 1.1: Formalise and disclose the funtions reserved to the Board and those delegated to management Formalise directors’ appointments in writing
Recommendation 2.4: The Board should establish a Nomination Committee.
Recommendation 3.1: Establish a Code of Conduct to guide the directors the chiefexecutive offi cer (or equivalent), the chief financial offi cer (or equivalent) and any other key executives as to:
3.1.1 the practices necessary to maintain confidence in the Company’s integrity
3.1.2 the responsibility and accountability of individuals for reporting and investigating reports of unethical practices.
Recommendation 3.2: Disclose the policy concerning trading in Company securities by directors, offi cers and employees.
Recommendation 4.1: Require the chief executive offi cer (or equivalent) and the chief financial offi cer (or equivalent) to state in writing to the Board 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.
Recommendation 4.2: The Board should establish an Audit Committee.
Recommendation 4.3: Structure the Audit Committee so that it consists
of:
- only non-executive directors
- a majority of independent directors
- an independent chairperson, who is not chairperson to the Board
- at least three members.
Recommendation 4.4: The Audit Committee should have a formal charter.
Recommendation 5.1: Establish written policies and procedures designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior management level for that compliance.
Recommendation 6.1: Design and disclose a communications strategy to promote effective communication with shareholders and encourage effective participation at general meetings.
Recommendation 7.1: The Board or appropriate Board committee should establish policies on risk oversight and management.
Recommendation 7.2: The chief executive offi cer (or equivalent) and the chief financial offi cer (or equivalent) should state to the Board in writing that:
7.2.1 the statement given in accordance with best practice recommendation 4.1 (the integrity of financial statements) is founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the Board
7.2.2 the Company’s risk management and internal compliance and control system is operating effi ciently and effectively in all material respects.
Recommendation 9.2: The Board should establish a Remuneration Committee.
Recommendation 10.1: Establish and disclose a Code of Conduct to guide compliance with legal and other obligations to legitimate stake holders.
In all cases, the Board followed the recommendations in practice, but had not formally documented them. The recommendations have now been documented and disclosed and accordingly the Company now complies with each of these recommendations.
