Shield Mining Limited (“the Company”) has adopted comprehensive systems of control and accountability as the basis for the administration of corporate governance. The Board of the Company 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, Australian Securities Exchange (“ASX”) and other statutory requirements. Full details of the Company’s corporate governance policies are set out on the Company’s website at www.shieldmining.com. This information includes the following sections:
- Board and Management Charter;
- Nomination Committee Charter;
- Policy and Procedure for Selection and Appointment Of New Directors;
- Board Code of Conduct;
- Corporate Code of Conduct;
- Policy on Directors and Executives Dealing in Securities;
- Audit Committee Charter;
- Policy and Procedure for Selection of External Auditor and Rotation of
Audit Engagement Partners;
- Policy on Continuous Disclosure Requirements;
- Insider Trading Policy for Employees;
- Shareholders Communication Policy;
- Risk Management Policy;
- Process for Performance Evaluation of the Board, Board Committees,
Directors and Key Executives;
- Remuneration Committee Charter; and
- Remuneration Policy.
A summary of the Company’s compliance with the ASX Corporate Governance Principles and Recommendations (2nd edition) is as follows:
PRINCIPLE 1 –
BOARD AND MANAGEMENT ROLES AND RESPONSIBILITIES
The Company has formalised and disclosed the roles and responsibilities of the Board and those delegated to senior management in its Board Charter.
The responsibilities of the Board include determining and monitoring the objectives and strategic direction of Shield Mining, monitoring the performance of the Company and its senior executives, approving business plans and budgets, and developing and ensuring adherence to company policies. The Board is also responsible for compliance with the codes of conduct, overseeing risk management and internal controls, and the assessment, appointment and removal of the Chief Executive Officer, Company Secretary and other senior executives.
The senior management are responsible for the efficient and effective operation of the Company in accordance with the objectives, strategies and policies determined by the Board.
The Nomination Committee (or its equivalent) evaluates and advises the Board on the performance of the Managing Director. For the current year, this review has been postponed until after completion of the recent fundraising.
The Managing Director is responsible for evaluating the performance of senior management. These reviews have taken place progressively over the course of 2008-09.
PRINCIPLE 2 – COMPOSITION OF THE BOARD
The Board of the Company currently consists of one executive and three non-executive directors. Details of the Company Directors, independence status, and their period of office are included in the Directors’ Report. Shield Mining’s Board composition follows the ASX recommendations, in that a majority of directors are independent, and the Company has an independent (non-executive) Chairman, being Mr Alexander Burns.
Mr Burns is a substantial shareholder in Shield Mining Limited as defined by section 9 of the Corporations Act 2001, holding 5.37% of issued capital as at 30 August 2009. The Board has assessed his independence and considers that he retains the status of an Independent Chair. The Board is of the opinion that the value of Mr Burns’ shareholding is, on its own and in the absence of any other material contractual or commercial relationship, insufficient to necessitate a change in independence status given his personal circumstances.
Both Dr Schalk van der Merwe and Mr Robert (Bob) Cornelius are considered to be independent because their personal holdings in the company are small and they have no other material contractual or commercial relationship with the Company.
Mr David Netherway is the Managing Director/CEO of the company and, as such, is not considered independent.
Subject to the Chairman’s approval, which is not to be unreasonably withheld, directors have the right, at the Company’s expense, to obtain independent professional advice on issues arising in the course of their duties.
The Board assumes the responsibility of carrying out the functions of the Nomination Committee at the current time. The Company has adopted a Nomination Committee Charter establishing how the functions are to be performed in the absence of a separate committee.
The Board conducts an annual review of its performance, and the performance of Directors, the Chairman and any committees established, in accordance with the Nomination Committee function based upon the procedures set out in the charter. For the current year this review has been deferred until after completion of the recent fundraising.
The Company has a policy defining the procedure for the selection and appointment of new directors. Candidates for the Board are considered and selected by reference to a number of factors which include, but are not limited to, their relevant experience and achievements, compatibility with other Board members, credibility within the Company’s scope of activities, and intellectual and physical ability to undertake Board duties and responsibilities. Directors are initially appointed by the full Board, subject to election by shareholders at the next general meeting.
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