Page 38 - Sun Resources Annual Report 2013

STATEMENT OF CORPORATE GOVERNANCE PRACTICES
Principle 2:
Structure the Board to add value
Board composition
The Board is comprised of both executive and non-
executive Directors with a majority of non-executive
Directors. Non-executive Directors bring a fresh
perspective to the Board’s consideration of strategic, risk
and performance matters.
The roles of Chairman and the Managing Director are not
exercised by the same individual.
In recognition of the importance of independent views
and the Board’s role in supervising the activities of
management, the Chairperson should be a non-executive
and independent Director. Dr W G Martinick is a non-
executive Director who is deemed to be independent.
The majority of the Board should be independent of
management and all Directors are required to exercise
independent judgement and constructively challenge the
performance of management.
The Chairperson is elected by the full Board and is
required to communicate regularly with the Managing
Director. The Company is to maintain a mix of Directors on
the Board from different backgrounds with complementary
skills and experience. The Board is required to undertake
an annual Board performance review and consider the
appropriate mix of skills required by the Board to maximise
its effectiveness and its contribution to the Group.
The Board seeks to ensure that:
• At any point in time, its membership represents
an appropriate balance between Directors with
experience and knowledge of the Group and Directors
with an external or fresh perspective.
• The size of the Board is conductive to effective
discussion and efficient decision-making.
Director’s independence
The Board has adopted specific principles in relation
to Director’s independence. These state that when
determining independence, a Director must be a non-
executive and the Board should consider whether the
Director:
• Is a substantial shareholder of the Company or an
officer of, or otherwise associated directly with, a
substantial shareholder of the Company.
• Is or has been employed in an executive capacity by
the Company or any other Group member within the
last three years.
• Within the last three years has been a principal of a
material professional adviser or a material consultant
to the Company or any other Group member, or
an employee materially associated with the service
provided.
• Is a material supplier or customer of the Company or
any other Group member, or an officer of or otherwise
associated directly or indirectly with a material supplier
or customer.
• Has a material contractual relationship with the
Company or a controlled entity other than as a Director
of the Group.
• Is free from any business or other relationship which
could, or could reasonably be perceived to, materially
interfere with the Director’s independent exercise of
their judgement.
Materiality for these purposes is determined on both
quantitative and qualitative bases.
The Board assesses independence each year. To enable
this process, the Directors must provide all information
that may be relevant to the assessment.
Dr Martinick and Mr Kestel have been assessed as
independent.
The Company does not comply with Recommendation
2.1 in that the majority of Directors are not independent.
The Board has recognised this departure and recognises
the importance of independent judgement, perspective
and advice that independent non-executives can bring
to the Company. The Board is currently in the process of
identifying, reviewing and selecting for appointing further
independent non-executive Directors. An update has
recently been provided to the market.
Conflict of Interest
In the event that a potential conflict of interest may arise,
involved Directors must withdraw from all deliberations
concerning the matter. They are not permitted to exercise
any influence over other Board members.
Board members
Details of the members of the Board, their experience,
expertise, qualifications, term of office, relationships
affecting their independence and their independent status
are set out in the Directors’ Report. At the date of signing
the Directors’ Report there are two executive Directors
and three non-executive Directors, two of whom have no
relationships adversely affecting independence and so are
deemed independent under the principles set out above.
Term of office
Under the Constitution the minimum number of Directors
is three and the maximum is ten. Directors are not
appointed for a fixed term. At each annual general meeting
one third of the Directors other than the Managing Director
must resign by rotation, with those serving the longest
resigning first. Resigning Directors may stand for re-
election.
Role of the Chairperson
The Chairperson is responsible for leading the Board,
ensuring 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 senior executives. The focus should be
on ensuring that the Board and the CEO act in an ethical
manner with strong values that support the governance
principles of the Company.
SUN RESOURCES ANNUAL REPORT 2013 36