Corporate Governance Policy

Corporate Governance Policy

1.1 ASX Corporate Governance Council Principles and Recommendations

Our Company has adopted comprehensive systems of control and accountability asthe basis for the administration of corporate governance. The Board is committed to administering the policies and procedures with openness and integrity, pursuing the true spirit of corporate governance commensurate with the Company's needs.

To the extent applicable, our Company has adopted The Corporate Governance Principles and Recommendations (2nd Edition) as published by ASX Corporate Governance Council (Recommendations).

In light of the Company's size and nature, the Board considers that the current board is a cost effective and practical method of directing and managing the Company. As the Company's activities develop in size, nature and scope, the size of the Board and the implementation of additional corporate governance policies and structures will be reviewed.

The Company's main corporate governance policies and practices as at the date the current date are outlined below and the Company's full Corporate Governance Plan is available in a dedicated corporate governance information section of the Company's website www.boraboraresources.com.au.

Board of directors

The Board is responsible for corporate governance of the Company. The Board develops strategies for the Company, reviews strategic objectives and monitors performance against those objectives. The goals of the corporate governance processes are to:

(a) maintain and increase Shareholder value;
(b) ensure a prudential and ethical basis for the Company's conduct and activities; and
(c) ensure compliance with the Company's legal and regulatory objectives.

Consistent with these goals, the Board assumes the following responsibilities: (a) developing initiatives for profit and asset growth;
(b) reviewing the corporate, commercial and financial performance of the Company on a regular basis;
(c) acting on behalf of, and being accountable to, the Shareholders; and
(d) identifying business risks and implementing actions to manage those risks and corporate systems to assure quality.

The Company is committed to the circulation of relevant materials to Directors in a timely manner to facilitate Directors' participation in the Board discussions on a fully-informed basis.

Composition of the Board

Election of Board members is substantially the province of the Shareholders in general meeting. However, subject thereto, the Company is committed to the following principles:

(a) the Board is to comprise persons with a blend of skills, experience and attributes appropriate for the Company and its business; and
(b) the principal criteria for the appointment of new directors is their ability to add value to the Company and its business.

No formal nomination committee or procedures have been adopted for the identification, appointment and review of the Board membership, but an informal assessment process, facilitated by the Chairman, has been committed to by the Board.

Identification and management of risk

The Board's collective experience will enable accurate identification of the principal risks that may affect the Company's business. Key operational risks and their management will be recurring items for deliberation at Board meetings.

Ethical standards

The Board is committed to the establishment and maintenance of appropriate ethical standards.

Independent professional advice

Subject to the Chairman's approval (not to be unreasonably withheld), the Directors, at the Company's expense, may obtain independent professional advice on issues arising in the course of their duties.

Remuneration arrangements

The Company intends to appoint a Managing Director following completion of the Offer. The remuneration of the Managing Director, and any other executive Directors that may be appointed in the future, will be decided by the Board at the appropriate time, without the affected Director participating in that decision-making process.

The total maximum remuneration of non-executive Directors is initially set by the Constitution and subsequent variation is by ordinary resolution of Shareholders in general meeting in accordance with the Constitution, the Corporations Act and the ASX Listing Rules, as applicable. The determination of non-executive Directors' remuneration within that maximum will be made by the Board having regard to the inputs and value to the Company of the respective contributions by each non-executive Director. The current amount has been set at an amount not to exceed $250,000 per annum.It has been agreed that the non-executive Directors (including the Chairman) shall receive a fee of $20,000 per annum, commencing from the date on which the Company is listed on ASX.

In addition, a Director may be paid fees or other amounts (i.e. subject to any necessary Shareholder approval, non-cash performance incentives such as Options) as the Directors determine where a Director performs special duties or otherwise performs services outside the scope of the ordinary duties of a Director.

Directors are also entitled to be paid reasonable travelling, hotel and other expenses incurred by them respectively in or about the performance of their duties as Directors.

The Board reviews and approves the remuneration policy to enable the Company to attract and retain executives and Directors who will create value for Shareholders having consideration to the amount considered to be commensurate for a company of its size and level of activity as well as the relevant Directors' time, commitment and responsibility. The Board is also responsible for reviewing any employee incentive and equity-based plans including the appropriateness of performance hurdles and total payments proposed.

Trading policy

The Board has adopted a policy that sets out the guidelines on the sale and purchase of securities in the Company by its key management personnel (i.e. Directors and, if applicable, any employees reporting directly to the managing director). The policy generally provides thatthe written acknowledgement of the Chair (or the Board in the case of the Chairman) must beobtained prior to trading.

External audit

The Company in general meetings is responsible for the appointment of the external auditors of the Company, and the Board from time to time will review the scope, performance and fees of those external auditors.

Audit committee

The Company will not have a separate audit committee until such time as the Board is of a sufficient size and structure, and the Company's operations are of a sufficient magnitude for a separate committee to be of benefit to the Company. In the meantime, the full Board will carry out the duties that would ordinarily be assigned to that committee under the written terms of reference for that committee, including but not limited to, monitoring and reviewing any matters of significance affecting financial reporting and compliance, the integrity of the financial reporting of the Company, the Company's internal financial controlsystem and risk management systems and the external audit function.

Diversity policy

The Board has adopted a diversity policy which provides a framework for the Company to achieve, amongst other things, a diverse and skilled workforce, a workplace culture characterised by inclusive practices and behaviours for the benefit of all staff, improved employment and career development opportunities for women and a work environment that values and utilises the contributions of employees with diverse backgrounds, experiences and perspectives.

 

1.2 Departures from Recommendations

Following admission to the Official List of ASX, the Company will be required to report any departures from the Recommendations in its annual financial report.

The Company's compliance and departures from the Recommendations are set out on the following pages.

Principles and RECOMMENDATIONs COMMENT
1. Lay solid foundations for management and oversight
1.1 Companies should establish the functions reserved to the board and those delegated to senior executives and disclose those functions. The Company’s Corporate Governance Policy includes a Board Charter, which discloses the specific responsibilities of the board.
1.2 Companies should disclose the process for evaluating the performance of senior executives. The Company’s Corporate Governance Plan includes a section on performance evaluation practices adopted by the Company. The Chair will monitor the Board and the Board will monitor the performance of any senior executives who are not directors, including measuring actual performance against planned performance.
1.3 Companies should provide the information indicated in the Guide to reporting on Principle 1. The Company will explain departures (if any) from Principles and Recommendations 1.1 and 1.2 in its future annual reports. Performance evaluations for senior executives and board members will be completed prior to the end of the financial year. No performance evaluation of senior executives has taken place to date as this process is conducted annually and the first year has not been completed. Future annual reports will disclose whether such a performance evaluation has taken place in the relevant reporting period and whether it was in accordance with the process disclosed. The Corporate Governance Plan, which includes the Board Charter, is posted on the Company’s website.
2. Structure the board to add value
2.1 A majority of the board should be independent directors. A majority of the directors are independent directors.
2.2 The chair should be an independent director. The Chair is an independent director.
2.3 The roles of chair and chief executive officer should not be exercised by the same individual. The Company plans to appoint a Managing Director who is separate from the Chair.
2.4 The board should establish a nomination committee. The Board has not established a nomination committee. Given the present size of the Company, the Board has decided that a nomination committee is not appropriate. The functions of the nomination committee are carried out by the full Board.
2.5 Companies should disclose the process for evaluating the performance of the board, its committees and individual directors. The Board has adopted a policy to assist in evaluating Board performance in its Corporate Governance Plan (Performance Evaluation Practices). The Chair will review the composition of the Board and the performance of each Director to ensure that the Board continues to have a mix of skills and experience necessary for the conduct of the Company’s activities. Any new Directors will receive an induction appropriate for his/her experience.
2.6 Companies should provide the information indicated in the Guide to reporting on Principle 2. The Company has provided details of each Director, such as their skills, experience and expertise relevant to their position and will also provide these details on its website and in future annual reports. Explanation of departures from Principles and Recommendations 2.1, 2.2, 2.3, 2.4 and 2.5 are set out above. The Company will also explain any departures from Principles and Recommendations 2.1, 2.2, 2.3, 2.4 and 2.5 (if any) in its future annual reports. No performance evaluation of the Board and individual Directors has taken place to date as this process is conducted annually and the first year has not been completed. Future annual reports will disclose whether such a performance evaluation has taken place in the relevant reporting period and whether it was in accordance with the process disclosed. The Corporate Governance Plan is posted on the Company’s website.
3. Promote ethical and responsible decision-making
3.1 Companies should establish a code of conduct and disclose the code or a summary of the code as to:
  • the practices necessary to maintain confidence in the company’s integrity
  • the practices necessary to take into account their legal obligations and the reasonable expectations of their stakeholders
  • the responsibility and accountability of individuals for reporting and investigating reports of unethical practices.
The Company’s Corporate Governance Plan includes a ‘Corporate Code of Conduct’, which provides a framework for decisions and actions in relation to ethical conduct in employment
3.2 Companies should establish a policy concerning diversity and disclose the policy or a summary of that policy. The policy should include requirements for the board to establish measureable objectives for achieving gender diversity and for the board to assess annually both the objectives and progress in achieving them. The Company’s Corporate Governance Plan includes a ‘Diversity Policy’, which provides a framework for establishing measureable objectives for achieving gender diversity and for the Board to assess annually both the objectives and progress in achieving them.
3.3 Companies should disclose in each annual report the measureable objectives for achieving gender diversity set by the board in accordance with the diversity policy and progress in achieving them. This disclosure has not yet been made as the first year has not been completed. Future annual reports will disclose the measureable objectives for achievinggender diversity set by the board in accordance with the diversity policy and progress in achieving them.
3.4 Companies should disclose in each annual report the proportion of women employees in the whole organisation, women in senior executive positions and women on the board. This disclosure has not yet been made as the first year has not been completed. Future annual reports will disclose the proportion of women employees in the whole organisation, women in senior executive positions and women on the board.
3.5 Companies should provide the information indicated in the Guide to reporting on Principle 3. Explanation of departures from Principles and Recommendations 3.1, 3.2, 3.3 and 3.4 are set out above. The Company will also explain any departures from Principles and Recommendations 3.1, 3.2, 3.3 and 3.4 (if any) in its future annual reports. The Corporate Governance Plan, which includes the Corporate Code of Conduct and Diversity Policy, is posted on the Company’s website.
4. Safeguard integrity in financial reporting
4.1 The board should establish an audit committee. The Board has not established an audit committee. Given the present size and complexity of the Company, the Board has decided that a separate audit committee was not required. The functions of this committee will be carried out by the full Board.
4.2 The audit committee should be structured so that it:
  • consists only of non-executive directors
  • consists of a majority of independent directors
  • is chaired by an independent chair, who is not chair of the board
  • has at least three members.
Whilst the audit committee is not structured in the manner set out in the Principles and Recommendations, the Board is of the view that the experience and professionalism of the persons on the Board is sufficient to ensure that all significant matters are appropriately addressed and actioned. Further, the Board does not consider that the Company is of sufficient size to justify the appointment of additional directors for the sole purpose of satisfying this recommendation as it would be cost prohibitive and counterproductive. As the operations of the Company develop the Board will reassess the formation of the audit committee.
4.3 The audit committee should have a formal charter. The Company’s Corporate Governance Plan includes an Audit and Risk Committee Charter, which discloses its specific responsibilities.
4.4 Companies should provide the information indicated in the Guide to reporting on Principle 4. Explanation of departures from Principles and Recommendations 4.1, 4.2 and 4.3 are set out above. The Company will also explain any departures from Principles and Recommendations 4.1, 4.2 and 4.3 (if any) in its future annual reports. The Corporate Governance Plan, which includes the Audit & Risk Committee Charter, is posted on the Company’s website.
5. Make timely and balanced disclosure
5.1 Companies should establish written policies designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior executive level for that compliance and disclose those policies or a summary of those policies. The Company has a continuous disclosure program in place designed to ensure compliance with ASX Listing Rule disclosure and to ensure accountability at a senior executive level for compliance and factual presentation of the Company’s financial position.
5.2 Companies should provide the information indicated in Guide to Reporting on Principle 5. The Company has not currently departed from Principle and Recommendation 5.1. The Company will provide an explanation of departures from Principle and Recommendation 5.1 (if any) in its future annual reports. The Corporate Governance Plan, which includes a continuous disclosure program, is posted on the Company’s website.
6. Respect the rights of shareholders
6.1 Companies should design a communications policy for promoting effective communication with shareholders and encouraging their participation at general meetings and disclose their policy or a summary of that policy. The Company’s Corporate Governance Plan includes a shareholders communication strategy, which aims to ensure that the shareholders are informed of all major developments affecting the Company’s state of affairs.
6.2 Companies should provide the information indicated in the Guide to reporting on Principle 6. The Company has not currently departed from Principle and Recommendation 6.1. The Company will provide an explanation of departures from Principle and Recommendation 6.1 (if any) in its future annual reports. The Corporate Governance Plan, which includes a shareholders communication strategy, will be posted on the Company’s website.
7. Recognise and manage risk
7.1 Companies should establish policies for the oversight and management of material business risks and disclose a summary of those policies. The Company’s Corporate Governance Plan includes a risk management policy. The Board monitors and if necessary receives advice on areas of operational and financial risk, and considers strategies for appropriate risk management arrangements.
7.2 The board should require management to design and implement the risk management and internal control system to manage the company’s material business risks and report to it on whether those risks are being managed effectively. The board should disclose that management has reported to it as to the effectiveness of the company’s management of its material business risks. The Board will require that risk management and internal control systems are designed and implemented and that a report is provided at the relevant time.
7.3 The board should disclose whether it has received assurance from the chief executive officer (or equivalent) and the chief financial officer (or equivalent) that the declaration provided in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks. The Boardwill seek this assurance from the relevant individuals at the relevant time.
7.4 Companies should provide the information indicated in Guide to Reporting on Principle 7. The Company has not currently departed from Principles and Recommendations 7.1, 7.2 and 7.3. The Company will provide an explanation of any departures fromPrinciples and Recommendations 7.1, 7.2 and 7.3 (if any) in its future annual reports. The Corporate Governance Plan, which includes a risk management policy, is posted on the Company’s website.
8. Remunerate fairly and responsibly
8.1 The board should establish a remuneration committee. The Board has not established a remuneration committee. Given the present size of the company, the Board has decided that a remuneration committee is not required. The functions of this committee will be carried out by the full Board. The Company’s Corporate Governance Plan includes a Remuneration Committee Charter, which discloses its specific responsibilities.
8.2 The remuneration committee should be structured so that it:
  • consists of a majority of independent directors
  • is chaired by an independent director
  • has at least three members
The Board has not established a remuneration committee (refer above). The Board is currently comprised of a majority of independent directors, is chaired by an independent director and has three directors. Non-executive directors may receive options. The issue of options to non-executive directors is considered an appropriate method of providing sufficient incentive and reward whilst maintaining cash reserves.
8.3 Companies should clearly distinguish the structure of non-executive directors’ remuneration from that of executive directors and senior executives. The Board has distinguished the structure of non executive directors’ remuneration from that of executive directors and senior executives. The Company’s constitution provides that the remuneration of non-executive Directors will be not be more than the aggregate fixed sum set by the constitution and subsequently varied by resolution at a general meeting of shareholders. The Board is responsible for determining the remuneration of executive directors and senior executives (without the participation of the affected director). It is the Board’s objective to provide maximum stakeholder benefit from the retention of a high quality Board and executive team by remunerating executive directors and senior executives fairly and appropriately with reference to relevant employment market conditions and by linking the nature and amount of executive directors’ and senior executives/emoluments to the Company’s financial and operational performance.
8.4 Companies should provide the information indicated in the Guide to reporting on Principle 8. Explanation of departures from Principles and Recommendations 8.1, 8.2 and 8.3 (if any) are set out above. The Company will also provide an explanation of any departures from Principles and Recommendations 8.1, 8.2 and 8.3 (if any) in its future annual reports. The Corporate Governance Plan, which includes the Remuneration Committee Charter, is posted on the Company’s website.