| Corporate Governance |
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Introduction During the 2009 financial year, the Board of Genetic Technologies Limited made a number of amendments to the Company’s policies and practices to strengthen its corporate governance and to bring it more closely into line with the Recommendations of the ASX Corporate Governance Council. Following the release by the Council of the second edition of the Corporate Governance Principles and Recommendations on 2 August 2007, the Company’s governance structure has been further reviewed in light of the new guidance. In most respects, Genetic Technologies Limited complies with the Recommendations however, in several areas, policies and practices are being further developed to bring them more closely into line. As new policies are produced, or as the existing ones are amended, they are published on this website. Policies As at the date of this Statement, the following eleven Corporate Governance documents had been adopted by the Board, in addition to the Company’s Constitution which was revised and subsequently approved by the Company’s shareholders in November 2005. The following policies have been adopted by the Company:
Principles The following statements relate to the second edition of the Principles and Recommendations that were released by the ASX Corporate Governance Council on 2 August 2007. Principle 1: Lay solid foundations for management and oversight The Board of Directors of Genetic Technologies Limited is responsible for the corporate governance of the Group. The Board guides and monitors the business and affairs of Genetic Technologies Limited on behalf of the shareholders by whom they are elected and to whom they are accountable. The Board Charter and a separate statement of “Matters Reserved for the Board”, both of which have been adopted by the Board, meet the definition of “good practice”. A formal letter of appointment for new directors has been adopted. The Board protocol is also relevant. The process for evaluating senior executives is referred to in the Board Charter and is developed further in the Corporate Governance Committee Charter. The performance evaluation relating to the 2009 financial year was completed after the end of the reporting period. Further information is provided in the Remuneration Report on pages 7 to 14 inclusive of the 2009 Annual Report. Principle 2: Structure the Board to add value Since the completion of the 2006 Corporate Governance Statement, the Company has restructured its Board so that it complies with ASX Recommendations 2.1, 2.2 and 2.3. There is now a majority of Independent Directors on the Board. The skills, experience and expertise relevant to the position of director held by each Director in office as at the date of this Statement is included in the Directors’ Report which forms part of the Financial Report. Directors of Genetic Technologies Limited are considered to be independent when they are independent of Management and free from any business or other relationship that could materially interfere with - or could reasonably be perceived to materially interfere with - the exercise of their unfettered and independent judgement. The independence of each Director has been considered by the Board during the reporting period. In the context of director independence, “materiality” is considered from both the perspective of the Company and each individual Director. Directors holding more than 5% of the Company’s shares are not considered to be independent. In accordance with the definition of independence above, and the materiality threshold set, the following Directors of Genetic Technologies Limited are considered to be independent:
There are procedures in place, as agreed by the Board, to enable Directors, in furtherance of their duties, to seek independent professional advice at the Company’s expense. The approximate terms in office of each Director in office are set out below.
A review of Board performance, with the assistance of an external consultant, was conducted during the 2006 financial year however, due to several changes in the structure and composition of the Board, no such review was conducted during the 2009 financial year. Corporate Governance Committee During the 2005 financial year, the Board established a Nomination and Remuneration Committee, which meets to ensure that the Board continues to operate within the established guidelines including selecting candidates for the position of Director. During the 2006 financial year, the Committee’s role was expanded to include matters related to the Company’s Corporate Governance affairs and its name changed to the Corporate Governance Committee to reflect that additional role. The members of the Committee have the right to appoint an independent consultant to attend meetings of the Committee, as appropriate. The members of the Corporate Governance Committee are: Sidney C. Hack (Chairman) Tommaso Bonvino Huw D. Jones Details of Directors’ attendances at meetings of the Corporate Governance Committee are provided in the Directors’ Report on page 39 of the 2009 Annual Report. Principle 3: Promote ethical and responsible decision making The Company’s Code of Conduct, Whistleblower Policy and Securities Trading Policy are listed above. The Board considers that the Company complies with this Principle. Principle 4: Safeguard integrity in financial reporting The Board has established an Audit Committee which operates under a specific Charter approved by the Board. It is the Board’s responsibility to ensure that an effective internal control framework exists within the entity. This includes internal controls to deal with both the effectiveness and efficiency of significant business processes, the safeguarding of assets, the maintenance of proper accounting records, and the reliability of financial information as well as non-financial considerations such as the benchmarking of operational key performance indicators. The Board has delegated the responsibility for the establishment and maintenance of a framework of internal control and ethical standards for the management of the Group to the Audit Committee. The Audit Committee also provides the Board with assurance regarding the reliability of financial information for inclusion in the Company’s financial reports. The members of the Audit Committee are: Sidney C. Hack (Chairman) Dr. Malcolm R. Brandon Huw D. Jones Details of Directors’ attendances at meetings of the Audit Committee are provided in the Directors’ Report on page 39 of the 2009 Annual Report. Principle 5: Make timely and balanced disclosure The Board has adopted and published a Continuous Disclosure Policy (refer above), which was reviewed during the reporting period. Principle 6: Respect the rights of shareholders The Board has adopted and published a Shareholder Communications Policy (refer above) and shareholder participation at general meetings of shareholders is encouraged. Principle 7: Recognise and manage risk The Company’s Risk and Compliance Policy covers the controls necessary to manage the identified risks. During the previous financial year, the Company expanded its risk management activities with the establishment of a Risk Management Committee which meets to evaluate risks faced by the business and reports back to the Audit Committee its findings on the effective management of those risks which have been identified. The Board has received assurances from the CEO and the CFO that the declaration provided by them in accordance with section 295A of the Corporations Act 2001 is founded on a sound system of risk management and internal control and that the system is operating in all material respects in relation to the financial reporting risks. Principle 8: Remunerate fairly and responsibly It is the Company’s objective to provide maximum shareholder benefit from the retention of a high quality Board and executive team by remunerating Directors and key Executives fairly and appropriately with reference to relevant employment market conditions. A full discussion of the Company’s remuneration philosophy and framework and the remuneration received by Directors and Executives during the 2009 financial year is included in the Remuneration Report, which is contained within the Directors’ Report. The Board has delegated to the Corporate Governance Committee the responsibility for the detailed oversight of remuneration matters. The Committee, which comprises a majority of Independent Directors, is chaired by an Independent Director. The Charter of the Committee is published on the Company’s website. During the 2009 financial year, further work was undertaken to improve the structure of the Company’s incentive system generally. |
