Corporate governance

As the leading membership association in the financial services industry, Finsia aspires to the highest standards of corporate governance as are expected of major organisations operating within our industry.

Finsia is a foundation member of the ASX Corporate Governance Council. We are proud to continue this involvement with the council, with our Chief Executive Officer serving as a representative. Our Board has endorsed the revised Corporate Governance Principles and Recommendations, which were published in August 2007, and took effect from 1 January 2008.

Finsia's response to the Principles and Recommendations in effect in 2007 is set out below:

Principle 1: Lay solid foundations for management and oversight

The Board is responsible for the overall corporate governance of Finsia, including its corporate planning. The Board has a management framework, including a system of internal control, a business risk management process and has established appropriate ethical standards.  The Code of Conduct and Code of Ethics are available online.

Principle 2: Structure the Board to add value

Finsia’s Constitution determines the composition of the Board, with Directors subject to election by a direct member vote, and at least one Director elected from each region. The CEO/Managing Director is the only Director who is a member of management. The Chair and Board members are independent Directors.

As a member organisation, Finsia derives significant strength from the involvement of the Directors as members committed to the enhancement of its objectives.

Selection of Directors

Directors of the Board for 2008 and their profiles are available online.

Directors are required to disclose transactions between themselves, their firms or associated entities and Finsia, including payment for services, such as presenters’ fees and taskforce commitments.

Nominations and Remuneration Committee

The Nominations and Remuneration Committee comprises the President, Vice President and CEO.

The Constitution provides that, in addition to the elected Directors, two additional Directors may be appointed by the Board. In its consideration of candidates for the Board, the Nominations and Remuneration Committee is proactive in seeking continuity of expertise and representation of regions and industry sectors as serving Directors conclude their tenure on the Board.

The Board-endorsed guidelines for attributes required of Directors are outlined in the Board Charter. 

Regional representation

The Board appoints Regional Councils, which include representatives from business sectors. Members of Regional Councils are Finsia members and all councils include a Director of the Board.

Independent professional advice

Each Director has the right to seek independent professional advice at Finsia’s expense. The President’s prior approval is required, which is not to be withheld unreasonably.

Conflicts of interest

Board policy requires that if there is, or could be, a conflict of interest for Directors, then those Directors do not receive relevant Board papers, do not participate in those discussions or vote and also absent themselves from the meeting room when those discussions are held.

Principle 3: Promote ethical and responsible decision-making

The Board actively promotes ethical and responsible decision making. Finsia’s Code of Ethics and Code of Conduct are available from the company secretary by calling +61 2 9275 7912 or emailing CompanySecretary@finsia.com.

Principle 4: Safeguard integrity in financial reporting

In accordance with this principle, the CEO and the relevant senior manager provide signed statements 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.

To provide rigour and accountability, declarations are made by each of the operational managers that all material liabilities have been identified and communicated to the Finance Department before year-end.

Members of the Audit, Finance, Risk Management & Compliance Committee (Audit Committee) are all non-executive Directors and the Chair of the Committee is not the Chair of the Board.

Principle 5: Make timely and balanced disclosure

As a matter of best practice, Finsia discloses to members and other key stakeholders material information that may affect the organisation from time to time.

Finsia’s website provides comprehensive and up-to-date information about member benefits and services, professional development events, careers information, Finsia news and media releases, policy initiatives and corporate governance.

Principle 6: Respect the rights of shareholders

The Board considers the rights of all members and provides them with information about Finsia’s financial situation, performance and governance, major initiatives and future strategy, alliances and partnerships, and research and policy by a range of methods. Communications include our website, the Annual Report, JASSA and inFinance publications and our Annual General Meeting (AGM).

The external auditor is invited to attend the AGM and be available to answer questions about the conduct of the audit and the preparation and content of the auditor’s report.

Principle 7: Recognise and manage risk

The Board has established policies on risk oversight and management. The Audit Committee reviews the status of risk and compliance. A risk matrix complements compliance reports, which identify, assess, monitor and manage material risk throughout Finsia. A fraud control plan and whistleblower policy is also in place.

Principle 8: Encourage enhanced performance

The Board regularly undertakes external board performance reviews.

Principle 9: Remunerate fairly and responsibly

The Remuneration Committee is combined with the Nominations Committee and comprises the President, Vice President and CEO.

Finsia has an annual salary and bonus review process for all staff. Payment of any salary and bonus amounts is market driven and discretionary.

Finsia also has an executive and regional manager incentive scheme, which rewards members of the executive and regional managers on individual performance and the performance of the organisation. The funding of any payments is directly linked to the overall performance of Finsia for the year in question. The objective is to recognise those people who make a key contribution to important functions, events or customer areas. These senior roles effectively manage the overall performance of Finsia and deal with all the environmental and market forces that affect performance.

The Constitution prohibits remuneration of any Director in his or her capacity as a member of Board, other than any salary payment due to the Director as a Finsia employee.

Principle 10: Recognise the legitimate interests of stakeholders

This principle requires a Board to recognise legal and other obligations to all legitimate stakeholders. Non-shareholder stakeholders include employees, clients/customers and the community as a whole.

The requirements of this principle are addressed in the Code of Conduct mentioned under Principle 3

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