Finsia is a founding member of the ASX Corporate Governance Council and Finsia’s chief executive is a member of the council. Finsia’s board has endorsed the revised Corporate Governance Council Principles and Recommendations.
The board is focused on ensuring stakeholders are informed of our activities and that the confidence of our members is preserved.
Principle 1: Lay solid foundations for management 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 established ethical standards.
Principle 2: Structure the Board to add value
The Finsia constitution determines the composition of the board, with directors subject to election by a direct national vote by members. At least one director is elected from each of the regions. The chief executive officer/managing director is the only director who is a member of management. The chair and board members are independent directors.
As a membership organisation, we derive strength from the involvement of the directors as members committed to the enhancement of Finsia’s objectives.
Selection of Directors
The directors in office at the date of this statement are set out in the directors’ report on page 23.
Biographical details outlining skills, experience and expertise relevant to the position of director are provided in the board profile on pages 18-20. Other directorships are also included.
Finsia is committed to ensuring gender diversity in the composition of its board of directors, which aligns with the proposed principles outlined in the ASX governance guidelines on gender equality. Three of 11 elected directors in 2011 were women. The board has an induction program in place for new directors.
The nominations and remuneration committee comprises the president and vice president or as otherwise determined by the board from time to time.
The composition of, and attendance at meetings of the nominations and remuneration committee are shown in the directors’ report on page 25.
The constitution provides that, in addition to the elected directors, two additional directors may be appointed by the board. In March 2011, Ms Jane Dharam SF Fin was appointed as an additional director.
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. This committee utilises a board skills matrix. Potential directors, with diverse skills, have been identified.
The board-endorsed guidelines for attributes required of directors are outlined in the board charter, which is available at finsia.com/about.
The board regularly undertakes external board performance reviews.
The board appoints regional councils, which include representatives from various 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.
Principle 3: Promote ethical and responsible decision-making
The board actively promotes ethical and responsible decision-making and the Code of Ethics and Code of Conduct are available at finsia.com/about.
Directors are required to disclose transactions between themselves, their firms or associated entities and Finsia, including payment for services.
The board takes seriously its legal obligations and has regard to the resonable expectations of all stakeholders.
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.
The policy provides for a register of interests to be maintained and reviewed as an agenda item at each meeting of the board.
Gender reporting and ASX guidelines
As a member of the ASX Corporate Governance Council, Finsia was directly involved in raising the bar on gender diversity in financial services, which resulted in changes to the ASX Corporate Governance principles and recommendations.
The changes, which took effect from 1 January 2011, require ASX listed companies to disclose the proportion of women employees in the whole organisation, women in senior executive positions, and women on the board in their annual report on an ‘if not, why not’ basis.
Proportion of women as of December 2011
- Women employees – whole organisation 74%
- Women – senior executive positions 66%
- Women – on the board 25%
Although not a listed company, the Finsia board reports against the ASX Corporate Governance Principles and Recommendations in its annual report and on its website. As part of this process, the Finsia board and executive are committed to developing a Finsia diversity policy to include broader diversity considerations for members and Finsia committees.
Principle 4: Safeguard integrity in financial reporting
In accordance with the ASX principle, the chief executive officer and the director of finance have provided 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 as part of the year-end accounting process.
Members of the audit, finance, risk management and compliance committee (audit committee) are all non-executive directors, and the chair of the committee is not the chair of the board.
Membership of the committee during 2011 is set out in the directors’ report on page 25.
Principle 5: Make timely and balanced disclosure
Finsia discloses to members and other key stakeholders material information that may affect the organisation from time to time.
Our website, finsia.com, provides comprehensive and up-to-date information about member benefits and services, professional development events, careers information, Finsia news and media releases, advocacy initiatives and corporate governance.
Principle 6: Respect the rights of shareholders
The board carefully considers the rights of all members of Finsia and provides members with information about Finsia’s financial situation, performance and governance, major initiatives and future strategy, alliances and partnerships, and policy and advocacy by a range of methods.
Communications include the annual report, JASSA and inFinance publications, the Finsia website and the 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. In addition, the chief executive officer and the director of finance have stated to the board in writing that:
- the integrity of financial statements is founded on a system of risk management and internal compliance and control which implements the policies adopted by the board
- the risk management and internal compliance and control system is operating efficiently and effectively in all material respects.
Finsia has adequate risk management and compliance controls in place.
The board also, on a regular basis, receives reports about the strength of the risk management framework and processes.
IT infrastructure and services are outsourced to an external hosting facility. In the event of a significant business disruption effective recovery procedures are provided for within the Business Continuity Plan (BCP), which is reviewed on an annual basis.
The audit committee reviews the status of risk and compliance. The risk matrix, developed in 2006, complements the quarterly, half-yearly and annual compliance reports, which identify, assess, monitor and manage material risk throughout the organisation.
A fraud control plan and a whistleblower policy are also in place.
Principle 8: Remunerate fairly and responsibly
The remuneration committee is combined with the nominations committee and comprises the president and vice president or as determined by the board from time to time.
Attendance at meetings of the committee is shown in the directors’ report on page 25.
We have an annual salary and bonus review process for all staff. Payments of any salary and bonus amounts are market driven, performance-based and discretionary.
We operate a variable incentive program, which has delivered an enhanced capability to drive individual employee performance and to reward high performance and further support Finsia’s performance culture.
The constitution prohibits remuneration of any director in his or her capacity as a member of the board, other than any salary payment due to the director as a Finsia employee.
Details of directors’ remuneration and superannuation are set out in Note 15 of the financial statements.