Corporate Governance Statement
Approved by the Board of Directors on 22 February 2017
The Corporate Governance Statement is reviewed annually. The current Statement was approved by the Board on 22 February 2017.
The Energy and Water Ombudsman (SA) Limited is a public company limited by guarantee, incorporated under the Corporations Act 2001 (Cth). The Board of Directors is committed to achieving and demonstrating the highest standards of corporate governance. The Company’s corporate governance framework has been developed in accordance with the Corporate Governance Principles and Recommendations released by the ASX Corporate Governance Council, as far as they apply to the Company. The Board continues to review the framework and practices to ensure they meet the interests of the Members.
The Board has primary responsibility for the formal administration of the Company, policy matters, oversight of the Scheme’s operation and maintaining the independence of the Ombudsman. The Ombudsman has responsibility for the day-to-day operation of the Scheme and the resolution of individual complaints. These roles are complementary and generally the Ombudsman will attend Board meetings as an observer and an advisor as appropriate.
A description of the Company’s main corporate governance practices is set out below.
1. The Board of Directors
The Company is governed by a Board whose principal source and rules of governance include:
- The Constitution and Charter
- The Board Charter
- Terms of Reference of the Board Committees
- Board Policy
The composition of the Board is determined by the Company’s Constitution. The Board consists of nine directors and comprises:
- Two directors elected by Electricity Members; one director elected by Gas Members and one director elected by Water Members (“Industry Directors”)
- Four persons nominated by the Essential Services Commission (of South Australia) (the Commission) to represent customers of electricity, gas and water services or public interest groups relevant to such services (“Consumer Directors”)
- An independent Chair
The current Directors of the Company are:
- Mr P Bicknell, Independent Chair
- Mr G Barton, Gas Industry Director (Australian Gas Networks)
- Ms J Byrne, Consumer Director
- Ms M Cross, Consumer Director
- Ms W Eyre, Consumer Director
- Mr P Makinson, Electricity Industry Director (SA Power Networks)
- Ms K Matthias, Consumer Director
- Ms K Rowlands, Water Industry Director (SA Water)
- Mr A Sinclair, Electricity Industry Director (AGL)
In appointing directors, as far as the structure of the Scheme allows, the appropriate mix and balance of skills available is taken into account and appropriate checks are undertaken before appointing a person a director.
An induction program for new directors is in place, and appropriate professional development opportunities are provided to develop and maintain the skills and knowledge needed to perform their role as directors effectively where necessary.
The Company has a strong commitment to gender diversity, demonstrated by high female participation at all levels of the organisation, including among management and the Board of Directors.
As at 30 June, two-thirds of the Board were female, half of the management team were female, and the rest of the staff were 10 male and 7 female members. The overall percentage across the Company, including Board members, was 50% female and 50% male.
The Directors appoint, with the approval of the Commission, a person to be the independent Chair of the Board for a term of three years. The Chair is eligible for reappointment for subsequent term or terms of three years.
The Chair of any meeting has a deliberative vote, but does not have a casting vote on any matter.
Mr Bill Cossey, AM, was appointed the Chair in March 2009, re-appointed in 2012 and retired in March 2015. Mr Peter Bicknell, BA, M Soc Admin, JP, was appointed as the independent Chair with effect from 22 March 2015.
The Company establishes written agreements with each director setting out the terms of their appointment. These include Deeds of Access and Indemnity, which contain the arrangements which the Company and the Director have made concerning indemnities, insurance, Company records and confidentiality, and letters of appointment setting out details of directors’ fees, committees on which they may serve and their roles and responsibilities and expectations of them.
Term of Office
The Company’s Constitution specifies that no director who is elected is to hold office for period in excess of three years, or until the third annual general meeting following the director’s election, whichever is the longer, without submitting himself or herself for re-election.
The Directors nominated by the Commission and appointed by the Directors hold office for a term of up to three years, and they are eligible to be nominated and appointed again for subsequent term or terms. However, no director appointed by the Commission, nor the independent Chair, can serve more than nine consecutive years as a director.
The Board currently holds six formal meetings per year, with additional meetings called as necessary to address specific significant matters that arise.
Conflict of Interest
Directors must advise the Board, on an ongoing basis, of any personal interest that could potentially conflict with those of the Company. No director is perceived to have any personal conflicts of interest by virtue of their employment by a Member of the Company.
It is accepted that the potential for conflict of interest is inherent in the structure of the Company, and that there may be circumstances where a director needs to abstain from voting on matters they may feel conflicted with.
A director is not counted in the quorum of a Board meeting considering any contract or proposed contract in which he or she has an interest, and is not entitled to vote on the matter. The details are recorded in the minutes of the meeting.
Chair and Ombudsman
The Chair is responsible for leading the Board, ensuring the Directors are properly briefed in all matters relevant to their role and responsibilities, facilitating board discussions and managing the Board’s relationship with the Company’s management team.
The Ombudsman is responsible for the day to day operation of the Scheme, implementing company strategies and policies and the resolution of individual complaints.
Mr Sandy Canale was appointed the Ombudsman in December 2007 and was re-appointed in December 2012 for a term of five years.
The Board appoints a Company Secretary for such term and upon such terms and conditions as the Board thinks fit. The appointment of the Company Secretary is formally resolved by the Board in accordance with section 204D of the Corporations Act.
The Company Secretary is accountable to, and reports directly to, the Board, through the Chairman, on all matters to do with the proper functioning of the Board. All Directors have direct access to, and may seek information from, the Company Secretary, to assist them in carrying out their duties as Directors.
Ms Pia Bentick, FCIS, FGIA, Barrister (np), was appointed the Company Secretary in March 2000, and is also the Corporate Counsel and a member of the senior management team.
Independent Professional Advice
Directors may obtain independent professional advice at the Company’s expense, on matters relevant to the Company’s affairs to assist them in carrying out their duties as Directors, subject to providing prior notice to the Chair. Copy of any advice received by a Director may be made available to other members of the Board.
The Ombudsman, the Business Services Manager and the Company Secretary are required to make a financial reporting certification to the Board with regard to the integrity of the financial statements of the Company, risk management and internal compliance in respect of each financial year, or any reporting period if so required by the Board.
Board Performance Assessment
The Board has a policy relating to the importance of reviewing its own performance and that of its Committees on an ongoing basis. As an internal assessment, the Chair will hold individual discussions with each Director to discuss their performance every other year.
The first external Board Review was conducted in 2016. Board Performance will be formally assessed biennially where deemed appropriate in the circumstances.
2. Board Committees
The Company’s Constitution provides for the Board to appoint, from time to time, a committee known as the Budget Committee, comprising an equal number of Industry Directors and independent or Consumer Directors.
In addition to the Budget Committee, the Board will establish such other committees as it deems appropriate. Membership of committees comprises of Directors and Officers of the Company and such other persons as the Board determines. The Board may delegate any of its powers and/or functions (except powers conferred and duties imposed on the Directors by law which are incapable of delegation) to a committee or an officer of the Company.
The Board has established Committees as set out below. The role and responsibilities of these Committees are detailed in formal Charters. Other committees may be established from time to time for specific purposes.
The Budget Committee formulates, for each Financial Year, a proposed Annual Funding Figure for the Company in a proposed Budget in consultation with the Ombudsman, and submits this to the Board at a time determined by the Board before the commencement of that Financial Year. The terms of reference of the Budget Committee are set out in the Budget Committee Charter adopted by the Board.
The Members of the Budget Committee are:
- Mr Patrick Makinson, Chair, Industry Director
- Mr Peter Bicknell, Independent Chair
- Ms Margaret Cross, Consumer Director
- Ms Kerry Rowlands, Industry Director.
The Remuneration Committee reviews the Directors’ fees and the Ombudsman’s remuneration annually. The terms of reference of the Remuneration Committee are set out in the Remuneration Committee Charter adopted by the Board.
The members of the Remuneration Committee are:
- Mr Peter Bicknell (Chair)
- Mr Geoffrey Barton
- Ms Wendy Eyre
- Ms Kay Matthias.
3. Conduct and Ethics
Code of Conduct
The Board has adopted a code of conduct that details the conduct and behaviour it expects from the employees of the Company in the performance of their duties. All employees are expected to perform their duties with professionalism, efficiency, fairness, impartiality, honesty and sensitivity.
4. Risk Management
Risk Management Plan
A Risk Management Plan is in place to assist the Company in achieving its risk management objectives – to ensure protection against financial loss, to ensure legal and regulatory obligations are satisfied, and that business opportunities and risks are identified and properly managed, and appropriately monitored by the Board. However, the Board recognises that no cost-effective internal control framework will preclude all errors and irregularities.
The Senior Management Team assists the Board in ensuring compliance with internal controls and risk management plans by regularly reviewing the effectiveness of the compliance and control systems, and reports to the Board quarterly.
5. Communication with Members and the holding of General Meetings
The Board encourages full participation of Members at general meetings to ensure a high level of accountability and identification with the Company’s strategy and goals. Important issues are presented to Members as single resolutions. It is current practice that proxy forms are issued to all eligible Members with the notice of general meetings.
Members are required to vote on the annual funding figure for the Company, the aggregate remuneration of Directors and changes to the Company’s Constitution. Copies of the Constitution are available to Members on request from the Company Secretary or from the Company’s website www.ewosa.com.au.
Other means of communication with members include:
- The Annual Report, which is available to all members and at the Company’s website
- The Financial Report, which is posted to all members
- Stakeholder meetings with the Ombudsman and regular meetings with the operational staff at the operational
Feedback from members is also regularly sought through various surveys and informal feedback opportunities.