Ceramic Fuel Cells has long recognised the importance of following clear policies and procedures, particularly for the protection of its highly valuable innovations and technical achievements. In the same way the Company holds high standards for corporate governance, risk, and financial management.
Corporate Governance Standards
As a company listed on the Australian Securities Exchange, Ceramic Fuel Cells Limited is required to have regard to the ASX Corporate Governance Council's Principles of Good Corporate Governance and Best Practice Recommendations (available on www.asx.com.au ).
The Directors are also mindful of the corporate governance requirements imposed on AIM quoted companies and the expectations of European investors, including the recommendations of the UK ‘Combined Code' on Corporate Governance.
Both sets of recommendations cover a range of ‘aspirational' principles to promote good corporate governance. Ceramic Fuel Cells Limited intends to comply with both standards to the maximum extent practicable, considering the Company's resources, stage of development and current priorities.
Details of the Company's Corporate Governance practices are published in each Annual Report.
Board of Directors
The Board consists of a non-executive Chairman, a Managing Director, an Executive Director and one non-executive director. The Board's policy is that it should include a majority of non-executive directors.
The Board has ultimate responsibility to the shareholders for the welfare of the Company by guiding and monitoring the Company's business affairs. The Board delegates management of the Company's resources to the executive management team, under the leadership of the Managing Director. The responsibilities of the Board and the roles and division of authority between the Chairman and Managing Director are set down in a Board Charter.
Under the Company's constitution, directors are elected for three years subject to the requirement that one-third of the directors (excluding a Managing Director) must retire at each annual general meeting. A retiring director may stand for re-election. A director must declare any conflict of interest, and directors may not participate in discussions or resolutions pertaining to any matter in which the director has a material personal interest without Board approval.
In discharging their duties, directors are provided with direct access to senior management and outside advisors and auditors. Board committees and individual directors may seek, with the Chairman's approval, independent professional advice at the Company's expense in order to perform their duties.
The Board of Directors aims to have a mix of skills that is appropriate for the Company’s stage of operations. Currently these skills include: commercialising technology, manufacturing and engineering operations, clean energy financing and operations, experience in international energy markets and finance. As the Company commercialises its products, the mix of skills will also evolve, to include a greater focus on volume manufacturing, product marketing and sales.
Whilst the Company provides a workplace that is open to gender diversity, the Company currently does not have a formal policy or specific objectives for gender diversity.
In terms of geographic diversity, the Board is aware of the value of having Directors with experience in the Company’s initial target markets. The Board includes directors based in Germany (Dr Roman Dudenhausen) and the United Kingdom (Mr Alasdair Locke and Mr Robert Kennett).
The Company's policy is to execute a formal deed with each director and the Company Secretary, to clearly set out the parties' expectations regarding access to Board papers, indemnity and insurance. The Board has established three standing committees, described below. Each of these Committees has a written charter.
The Board meets approximately monthly, with additional meetings when required.
Board Charter
The Board has ultimate responsibility to the shareholders for the welfare of the Company by guiding and monitoring the Company's business affairs. The Board delegates management of the Company's resources to the executive management team, under the leadership of the Managing Director.
A formal Board charter sets out how the Board will operate, and includes the following items:
•The responsibilities of the Board and the roles and division of authority between the Chairman and Managing Director.
A description of the Board Structure and practice, including Board committees.
•A Directors' code of conduct, with principles similar to those set out in the Australian Institute of Company Directors Code of Conduct.
•Guidance on the Independence of directors and dealing with conflicts of interest.
•Director's access to management and independent advice.
•An annual review of the performance of individual directors, the Board as a whole and the Board's committees.
Audit Committee
With the recent resignation of Dr Binks, Mr Locke (Chair) is currently the sole member of the Audit Committee.
The Audit Committee recommends to the Board the appointment of the external auditors, reviews and monitors compliance with the audit plan, reviews the Company's financial reports, monitors the effectiveness of the accounting systems, the internal control environment, and the risk management and compliance system, and provides a clear line of communication between the external auditors and the Board.
The Audit Committee has a formal written charter which sets out:
•The objectives and responsibilities of the Committee.
•The composition of the Committee, namely at least three directors with a majority being non executive.
•Procedures for meetings of the Committee.
•The authority of the Committee, and rights of access to management and external advisors.
Technical Committee
With the recent resignation of its Chairman, Dr Binks, Mr Kennett is the sole Technical Committee member, with the Chief Technical Officer and other senior managers attending by invitation. All Directors are entitled to attend all meetings of the Technical Committee. The Technical Committee overviews the Company's product and technology development programmes and advises the Board upon those matters, including technology risks.
The Technical Committee has a formal written charter which sets out:
•The objectives and responsibilities of the Committee.
•The composition of the Committee, namely at least two non-executive directors, the Managing Director and the Chief Technical Officer of the Company.
•Procedures for meetings of the Committee.
Remuneration and Nominations Committee
The Remuneration and Nominations Committee comprises Mr Locke (Chair) and Dr Dudenhausen.
The Committee reviews the remuneration of directors and senior management and the Company's recruitment, retention and termination policies for senior management. The Committee also monitors Board composition, Board and senior management succession planning, and reviews the performance of the Managing Director.
The Remuneration and Nominations Committee has a formal written charter which sets out:
•The objectives of the Committee.
•The composition of the Committee, namely at least three independent non-executive directors of the Company.
•Procedures for meetings of the Committee.
•Responsibilities of the Committee relating to Nomination and Remuneration.
Company Policies
Ceramic Fuel Cells Limited has adopted a range of policies and procedures to ensure it follows appropriate standards of corporate governance, including the following policies.
Code of Conduct
The Code of Conduct is designed to maintain confidence in the integrity of Ceramic Fuel Cells Limited and its subsidiaries. This code expresses certain basic principles that Ceramic Fuel Cells Limited, its employees, contractors and external consultants should follow in all dealings related to the Company.The Code requires all directors, officers and senior management and employees to observe high standards of ethics and behaviour in all of the Company's activities.
In particular the Code sets out principles relating to:
•Compliance with the law, particularly laws relating to competition and consumer protection, insider trading, privacy
•Occupational health & safety policy
•Equality in employment
•Confidentiality
•Conflict of interests
•Procedures for reporting any breaches of the Code.
Continuous Disclosure Policy
As a listed company, Ceramic Fuel Cells Limited is required to disclose certain information to the market, to ensure that investors are properly informed about the company. The Company's Continuous Disclosure Policy is intended to ensure that Ceramic Fuel Cells Limited directors and staff understand and comply with the legal constraints on disclosing information.
The Policy includes provisions dealing with:
•Information that Ceramic Fuel Cells Limited must disclose to the market, including certain ‘price sensitive' information and other mandatory disclosure required by the ASX or AIM markets.
•A Disclosure Committee that is responsible for managing Ceramic Fuel Cell Limited's disclosure.
•Disclosure of information to the ASX and AIM markets, to the public and to analysts and investors.
•When a trading halt (or suspension) may be appropriate.
Securities Trading Policy
As a listed company, the law imposes restrictions on employees trading in the shares of Ceramic Fuel Cells Limited.
The Company's Securities Trading Policy contains basic guidelines that apply to all employees, Directors, and contractors, regarding the prohibition on ‘insider trading'.
The Policy also contains additional restrictions on trading by Directors and senior staff, including restrictions on dealing in Ceramic Fuel Cells Limited securities during certain ‘close periods' and restrictions on short-term trading.
Shareholder Communications
Ceramic Fuel Cells Limited takes a number of steps to promote effective communication with shareholders, including:
•Holding regular briefings for brokers and investors, in Australia and Europe;
•Re-designing and continued updates of the Company website;
•Providing a facility for shareholders to subscribe to receive announcements and other shareholder correspondence by email;
•Placing on the Company website Company announcements and presentations, and the full text of AGM notices and explanatory material;
•Providing webcasts and podcasts through the Boardroomradio service www.brr.com.au/cfu
Risk Management
Management and the Board place a strong emphasis on identifying and mitigating the key risks facing the Company.
Management regularly identifies and reviews the key risks across the Company's operations - including technical, commercial and manufacturing risks. These risks are also reported regularly to the Board Audit Committee and the technical taskforce. The major risks are also communicated to shareholders in the Company's Annual Reports.
http://www.cfcl.com.au/Corporate_Governance/
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