This Board Charter (Charter) sets out the role, responsibilities, structure and processes of the Board of eftpos Payments Australia Limited (Company).
2. Board Role and Responsibilities
The role of the Board is to provide strategic guidance for the Company and effective oversight of management. The key responsibilities of the Board are:
- Setting the ethical tone of the Company;
- Setting the Company’s strategic direction and monitoring management’s implementation of that strategy;
- Monitoring financial outcomes and the integrity of reporting. In particular approving annual budgets and longer-term strategic and business plans;
- Appointing the Chief Executive Officer and determining the terms and conditions of employment (including remuneration);
- Reviewing the performance of the Chief Executive Officer at least annually;
- Ensuring that the delegations of authority from the Board to the Chief Executive Officer are clearly defined;
- Ensuring effective and timely reporting to the Members;
- Approving and monitoring the progress of major capital expenditure projects and the capital budget;
- Ensuring that effective audit, risk management and compliance systems are in place to protect the Company’s assets and to minimise the possibility of the Company operating beyond legal requirements or acceptable risk parameters;
- Reviewing the performance of the Board and its Committees at least annually; and
- Overseeing aspects of the employment of senior executives including remuneration, performance and succession planning.
In performing the responsibilities set out above the Board acts at all times:
- In a manner designed to create and maximise sustainable value for, and benefit to, its Members;
- In accordance with the Board Code of Conduct; and
- In accordance with the duties and obligations imposed upon them by the Company’s Constitution and by law.
3. Board Committees
The Board from time to time establishes committees to assist in carrying out its responsibilities, and adopts terms of reference setting out matters relevant to the composition, responsibilities and administration of such committees, and other matters that the Board may consider appropriate.
The Board has established the following committees:
- Finance Risk and Audit Committee;
- Rebate Committee
- Remuneration and Nominations Committee; and
- Technical Operations Committee.
These Committees assist in the good governance of the Company by allowing for detailed consideration of major issues, and providing advice to the Board.
The Board is provided with verbal updates from the Committee Chairpersons after each meeting. Any Director may attend any Committee meeting.
4. Board size and composition
The Board currently comprises of three Independent Directors, eight Directors appointed under Articles 5.3(b), 5.3(c) and 5.3 (d) of the Company’s Constitution and a Managing Director.
Directors' terms are in accordance with clauses 5.3 (i) and 5.3 (j) of the Company’s Constitution as follows:
5.3 (i) Subject to article 5.3(j), and unless a Director is removed or otherwise vacates office beforehand or unless the notice or resolution of appointment fixes a lesser period, Directors hold office until the end of the third annual general meeting of the Company after they are appointed. A Director whose term of office has expired is eligible for re-appointment. A Director must not hold office as a Director of the Company for more than 3 consecutive terms. This clause does not apply to the term of office of Director of the Chief Executive Officer, if appointed as a Director pursuant to article 7.10(b).
5.3 (j) The following transitional arrangements apply to the terms of office of Directors up to the end of the 2012 annual general meeting of the Company:
(i) 3 Directors appointed by the Members in accordance with article 5.3 (b), (c) or (d) and one Independent Director (as determined by the Board) will retire at the 2011 annual general meeting of the Company;
(ii) 2 Directors appointed by the Members in accordance with article 5.3 (b), (c) or (d) and 2 Independent Directors (as determined by the Board) will retire at the 2012 annual general meeting of the Company.
Currently the Chairperson is an independent non-executive Director.
The Constitution currently allows for the Board to be constituted of a minimum number of three Directors with no maximum.
A Director must not be a Director or Officer of another card payment scheme.
An Independent Director is a non-executive Director (ie is not a member of management or employee of a Member organisation)
5. Role of the Chairperson
The Board will appoint one of its members to be the Chairperson in accordance with the Constitution.
The Chairperson presides over the Board and General Meetings of the Company.
He or she has the task of making sure the Board is well informed and effective: that the members, individually and as a group have the opportunity to air differences, explore ideas and generate the collective views and wisdom necessary for the proper operation of the Board and the Company.
The specific roles of the Board Chairperson include:
- Ensuring the Board provides leadership and vision for the Company;
- Setting the agenda for Board meetings in conjunction with the Chief Executive Officer and the Company Secretary;
- Leading the Board, including presiding over Board meetings and directing Board discussions to effectively use the time available to address the critical issues facing the Company;
- Ensuring Board minutes properly reflect Board decisions;
- Developing an ongoing relationship with the Chief Executive Officer, such that the Chairperson is kept fully informed of matters which may be of interest to the Board;
- Acting as a mentor for the Chief Executive Officer;
- Commencing and chairing the annual process of Board and Director performance reviews;
- Promoting constructive and respectful relations between Board members and between the Board and senior management;
- Facilitating the annual assessment of the Chief Executive Officer’s performance; and
- Guiding the ongoing effectiveness and development of the Board and individual Directors.
The Board Chairman is also subject to the same duties as all other directors, including complying with the Board Code of Conduct
6. Responsibilities of Chief Executive Officer
The Chief Executive Officer is responsible to the Board for the overall management and performance of the Company. The Chief Executive Officer should manage the Company in accordance with the strategy, plans, practices and policies approved by the Board to achieve the agreed objectives. In addition the Chief Executive Officer’s responsibilities include:
- Ensuring that the ethical standards established by the Board are complied with;
- Ensuring that the authorities delegated from the Board of Directors are exercised in a competent manner and within the intent of such delegation;
- Being the conduit through which the Board is provided sufficient and relevant information to act effectively;
- Providing leadership to the Company and acting as the Company’s interface with its operating environment and the general business community;
- Keeping the Board Chairperson apprised of all matters of significance that occur between the Board meetings;
- Achieving the performance targets set by the Board;
- Ensuring the Company’s risk management and internal control frameworks are developed, implemented and managed;
- Ensuring that Company policies are complied with;
- Referring all matters outside his/her delegation to the Board for approval; and
- Other responsibilities as designated by the Board from time to time.
7. Board Meetings
Full Board meetings will normally be held every 2 months, in between 1 hour teleconference Board updates and held at venues, dates and times are agreed in advance. Additional meetings may be scheduled as required.
Urgent matters requiring the approval of the Board or a board committee that arise between scheduled meetings can be dealt with by way of circulating resolution.
Where it is not possible for sufficient Directors necessary for a quorum to attend the same location, the Board may hold a meeting via teleconference.
An agenda for each Board meeting and briefing materials will be distributed to each Director approximately five days prior to each meeting.
The Chairperson will normally set the agenda for Board meetings although any Director may request the inclusion of specific items.
It is expected that each Director will make every effort to attend each Board meeting and each meeting of any Board committee on which he/she sits. Attendance in person is preferred but attendance by teleconference is permitted if necessary.
Each Director should be familiar with the agenda for each meeting, have carefully reviewed all materials distributed in advance of the meeting, and be prepared to participate meaningfully in the meeting and to discuss all scheduled items of business.
Each Director is free to raise at any Board meeting subjects that are not on the agenda for that meeting.
The proceedings and deliberations of the Board and its committees are confidential. Each Director will maintain the confidentiality of information received in connection with his/her service as a Director.
The minutes of Board and Board Committee meetings will be circulated prior to the next meeting and will be confirmed at the next meeting.
Senior members of management may be invited to attend Board meetings to present reports on, or seek approvals within, their areas of responsibility.
The external auditor will meet with the Finance and Audit Committee at least once per year as part of annual financial accounts preparation and reporting.
The Company Secretary supports the effectiveness of the Board by monitoring that Board policy and procedures are followed and co-ordinates the completion and despatch of Board Agendas, briefing papers and minutes of proceedings.
The Company Secretary is responsible to the Board, through the Chairperson, on all governance matters and for meeting statutory reporting requirements in accordance with relevant legislation.
8. Conflicts of interest
In order to ensure their independent status all directors of the Company are subject to the statutory duties and prohibitions regarding conflicts of interest. The Company relies on the integrity of the Board of Directors to identify and disclose any issues which may give rise to a conflict of interest.
The Company Secretary will maintain a Register of Disclosures. Each Director is required to complete a Director’s Disclosure of Interest form on appointment to the Board and to review that form, as a minimum, every six months to ensure that the information held by the organisation is up to date.
Further to the declarations contained in the Register of Disclosures, Directors are required to declare any real or perceived conflicts of interest in relation to the matters before each board or committee meeting.
Any such matters declared will be added to the Register.
Non-executive Directors are entitled to accept positions with other companies. However, directors must observe their duties as set out in the Board Code of Conduct, and general law, in accepting any position with another company and in particular, those duties relating to conflicts of interest.
The Auditor is appointed in accordance with the Corporations Act.
On an annual basis, the Board evaluates the Auditor’s performance and ongoing independence.
10. Director access to professional advice
In the discharge of their duties, directors have the right to seek independent professional advice at the expense of the Company, subject to the prior approval of the Chairperson.
11. Board Performance and evaluation
The Board shall review its performance annually, with particular attention being paid to the extent to which it has met its responsibilities in terms of this Charter. The Board will approve a framework and process to assess the effectiveness of the Board, its committees and directors, with a view to ensuring that performance accords with best practice.
The findings of the review of performance will be discussed at a nominated Board meeting or at a scheduled Board workshop.
12. Chief Executive Officer performance and evaluation
The Chief Executive Officer and the Chairperson shall negotiate and sign a Performance Agreement within four (4) months of the commencement of the Contract of Employment for the remainder of the year and annually thereafter. If the parties so agree, the Performance Agreement can be varied at any time, in writing.
The performance of the Chief Executive Officer will be reviewed every twelve months (or at such other times as the Chairperson in his absolute discretion determines) throughout the period of employment.
The performance of the Chief Executive Officer is a matter for full Board deliberation and is a separate agenda item at the relevant Board meeting.
13. Review of the Board Charter
The Board will review this Charter on an annual basis or such other time as deemed necessary.