Board Charter

Board Charter

Aguia Resources Ltd
ABN: 94 128 256 888
As amended on June 20, 2017

1. Responsibilities of the Board

In carrying out the responsibilities and powers set out in this charter (Charter), the Board recognises its responsibility for the stewardship of the Company.

In addition to the matters it is expressly required by law to approve, the specific responsibilities of the Board are outlined under the heading “Matter Reserved for the Board Policy” which appears elsewhere in this Charter.

Generally, the powers and obligations of the Board are governed by the Corporations Act and the general law.
Without limiting those matters, the Board expressly considers itself responsible for the following:

  1. ensuring compliance with the Corporations Act, Canadian securities laws, the Listing Rules of any stock exchange on which the Company is listed ( Listing Rules) (where appropriate) and all other relevant laws;
  2. providing leadership and developing, implementing and monitoring strategic operational and financial objectives for the Company and the overall performance of the Company;
  3. appointing appropriate staff, consultants and experts to assist in the Company’s operations;
  4. ensuring appropriate financial and risk management controls are implemented;
  5. setting, monitoring and ensuring appropriate accountability and a framework for remuneration of Directors and executive officers;
  6. establishing and overseeing the Company’s process for making timely and balanced disclosure of all material information in accordance with the Listing Rules;
  7. implementing appropriate strategies to monitor performance of the Board in implementing its functions and powers;
  8. implementing and overseeing the Company’s risk management framework to enable risk to be identified, assessed and managed and to set the risk appetite the Board expects Management to operate within;
  9. appointing the Chairperson;
  10. appointing and removing the Managing Director/Chief Executive Officer and Company Secretary;
  11. approving the appointment and, where appropriate, removal of members of Management;
  12. contributing to and approving Management’s development of corporate strategy and performance objectives;
  13. monitoring Management’s implementation of strategy and performance generally, and ensuring appropriate resources are available to Management;
  14. monitoring the effectiveness of the Company’s governance practices;
  15. approving and monitoring the progress of major capital expenditure, capital management and acquisitions and divestitures;
  16. approving the annual budget;
  17. in conjunction with the Audit Committee , liaising with the Company’s external auditors;
  18. in conjunction with the Audit Committee , approving and monitoring financial and other reporting systems of the Company (including external audit) and the integrity of these systems; and
  19. appointing and overseeing Committees where appropriate to assist in the above functions and powers.

2. Composition of the Board

The structure of the Board is determined in accordance with the following principles:

  1. where practicable, a majority of the Board being Independent Directors;
  2. where practicable the Chairperson of the Board should be an Independent Director as determined in accordance with the Listing Rules , and where such an arrangement is not appropriate, an Independent Director should be appointed as ‘lead director’ and should act as the effective leader of the Board;
  3. to aim for, so far as is practicable given the size and the nature of the operations of the Company, a Board comprising members with diverse backgrounds; and
  4. to have a minimum of three Directors.

In assessing the independence of Directors, Principle 2 of the Corporate Governance Principles and Recommendations and Canadian National Instrument 52-110 “Audit Committees” generally regard an Independent Director as a non-executive Director (that is, not a member of management) who:

  1. is independent of management and free from any business or other relationship, which could, or could, in the view of the Board, reasonably be perceived to, materially interfere with the exercise of independent judgement;
  2. is not a substantial shareholder of the Company or an officer of, or otherwise associated directly with, a substantial shareholder of the Company;
  3. within the last three years has not been employed in an executive capacity by the Company or another group member;
  4. within the last three years has not been a partner, director or senior employee of a provider of material professional services to the Company or another group member;
  5. within the last three years has not been in a material business relationship (by example, as a supplier or customer) with the Company or other group member, or an officer of, or otherwise associated with, someone in such a relationship;
  6. has no material contractual relationship with the Company or another group member other than as a Director;
  7. does not have close family ties with any person who falls within any of categories (1) – (5) described above; and
  8. has not served on the Board for a period which could, or could reasonably be perceived to, materially interfere with the Director’s ability to act in the best interests of the Company or otherwise compromise their independence,

    such list not being exhaustive. Additional requirements for Independent Directors are set out in Section 11 of this Charter.

When considering whether a Director is an Independent Director, the materiality of such interest, position, association or relationship must be assessed to determine whether it might influence, or might reasonably be perceived to influence, in a material respect, the Director’s capacity to bring an independent judgement to bear on issues before the Board and to act in the best interests of the Company and its shareholders.

A Director must advise the Chairperson (or, in the case of the Chairperson, another member of the Nominations Committee) if there is a change in his or her interests, positions, associations or relationships that could bear on his or her independence at the earliest opportunity.

No member of the Board may serve for more than three years or past the third annual general meeting following their appointment, whichever is the longer, without being re-elected by the shareholders.

Prior to the Board proposing re-election of non-executive Directors, their performance will be evaluated by the Nomination and Compensation Committee to ensure that they continue to contribute effectively to the Board.

The Board should comprise Directors with a mix of qualifications, experience and expertise which will assist the Board in fulfilling its responsibilities, as well as assisting the Company in achieving growth and delivering value to shareholders.

3. The Role of the Chairman

  1. Where possible, the Chairman should be a non-executive Director and the Managing Director/Chief Executive Officer should not be the Chairman of the Company. However where the Board concludes that the same individual can perform both roles successfully and in the best interests of the Company, the dual role will be permitted.
  2. The Chairman must be able to commit the time to discharge the role effectively.
  3. The Chairman is responsible for the leadership of the Board, ensuring it is effective, setting the agenda of the Board, conducting the Board meetings and conducting the shareholder meetings. The Chairman should facilitate the effective contribution of all Directors and promote constructive and respective relations between Directors and between the Board and management.
  4. The Chairman should facilitate the effective contribution of all Directors and promote constructive and respectful relations between Board members and management.
  5. In the event that the Chairman is absent from a meeting of the Board then the Board shall appoint a director to act as chair for that meeting.
  6. The Chairperson is also responsible for shareholder communication and arranging Board performance evaluation

4. The Role of the Managing Director/Chief Executive Officer

The Managing Director/Chief Executive Officer’s duties are to:

  1. 1. have the overall responsibility for running the affairs of the Company under delegated authority from the Board including undertaking and assessing risk management and internal control effectiveness and to implement the policies and strategies set by the Board. In carrying out his/her responsibilities, the Managing Director/Chief Executive Officer must report to the Board in a timely manner and ensure all reports to the Board present a true and fair view of the Company’s financial condition and operational results;
  2. 2. devote the whole of his or her time, attention and skill during normal business hours and at other times as reasonably necessary, to the duties of the office;
  3. 3. be accountable for planning, coordinating and directing the operations of the company;
  4. 4. promote the interests of the Company; and
  5. 5. faithfully and diligently perform the duties and exercise the powers consistent with the position of a Managing Director/Chief Executive Officer of the Company and those that are explicitly assigned by the Board.

In fulfilling his or her duties, the Managing Director/Chief Executive Officer:

  1. reports directly to the Board;
  2. provides prompt and full information to the Board regarding the conduct of the business of the Company; and
  3. complies with reasonable directions given by the Board.
  4. The Managing Director/Chief Executive Officer (together with the Chief Financial Officer, if there is one) will be required to state in writing to the Board that the financial records of the Company have been properly maintained and that the financial reports of the Company comply with relevant accounting standards and represent a true and fair view, in all material respects, of the Company’s financial position and performance

5. The Role of the Company Secretary

The role of the Company Secretary is to support the effectiveness of the Board and the Committees. In carrying out his or her responsibilities, the Company Secretary is accountable directly to the Board in the performance of this role which includes, without limitation:

  1. advising the Board and the Committees of governance matters;
  2. monitoring compliance with Board and Committee policy and procedures;
  3. coordinating the timely completion and despatch of Board and Committee papers;
  4. ensuring that the business at Board and Committee meetings is accurately recorded in the minutes; and
  5. helping to organise and facilitate the induction and professional development of Directors

6. The Role of Directors

Individual Directors should devote the necessary time to the tasks entrusted to them. All Directors should consider the number and nature of their directorships and calls on their time from other commitments. Directors and officers should be aware of their legal obligations.

7. Board Committees

The Board delegates certain of its obligations to committees pursuant to corporate governance ‘best practices’ and applicable laws. The Board has established an Audit and Risk Committee which carries out its duties in line with the Audit and Risk Committee Charter. The Board has also established a Nomination and Remuneration Committee which is responsible for establishing remuneration policies for the Board and the Managing Director/Chief Executive Officer, and for identifying, training, developing and managing the succession of the Directors. The Board will establish such other committees as it deems appropriate from time to time for specific purposes.

The Board will execute its responsibilities with regards to approving incentives and compensation for the Managing Director/Chief Executive Officer, senior executives and non-executive Directors in consultation with the Nomination and Remuneration Committee and in accordance with practices set out in the Nomination and Remuneration Committee Charter.

The Board will execute its responsibilities with regards to nominating and training Directors in consultation with the Nomination and Remuneration Committee and in accordance with the practices set out in the Nomination and Remuneration Committee Charter.

8. Board Meetings

  1. The Board will schedule at least 6 formal Board meetings a year and hold additional meetings, including by telephone conference calls, as may be required.
  2. Meetings of the Board will be called, scheduled, and held pursuant to the Company’s constitution, as well as pursuant to applicable law.
  3. The Board will provide at least 24 hours notice of a meeting, unless all members of the Board consent to another time period or waive notice.
  4. The Chair of the Board will seek input from the Directors and Company’s management, when setting each Board meeting’s agenda.
  5. Any written material to be provided to directors for a Board meeting must be distributed in advance of the meeting to give directors time to review and understand the information. All material provided to directors will be relevant and concise.
  6. There must be two Directors present at a meeting to constitute a quorum.
  7. Unless the Board otherwise determines from time to time, the Company Secretary will be the secretary of the meeting.
  8. Any senior officer may, if invited by the Chair of the Board, attend, give presentations relating to their responsibilities and otherwise participate at Board meetings.
  9. Non-executive Directors will be given an opportunity to confer privately after every meeting. Each meeting of independent Directors will chaired by an independent Director selected by a majority of the independent Directors at that meeting.
  10. The minutes of each Board meeting shall be prepared by the Company Secretary and circulated to Directors after each meeting for approval. Minutes of meetings should be approved within one month of the meeting.
  11. The Chief Financial Officer will generally be asked to attend the Board meetings as an executive officer of the Company.

9. Access to Advice

All Directors shall be given unrestricted access to the Company’s records and information except where the Board determines that such access would be adverse to the Company’s interests.

All Directors may consult management and employees as required to enable them to discharge their duties as Directors.

The Board, Board Committees and individual Directors may seek independent external professional advice as considered necessary at the expense of the Company, subject to prior consultation with the Chairman. A copy of any such advice received would generally be made available to all members of the Board unless the Chairperson determines that this is not appropriate or that a different approach should be taken.

The independent Directors, acting together, have the authority to consult with, and set the pay of, independent counsel, advisors and experts where they consider it necessary to carry out their duties. Any costs incurred as a result of the independent Directors consulting independent counsel, advisors or experts will be borne by the Company.

The independent Directors, acting together, may conduct or authorize investigations as they deem necessary.

10. The Board’s Relationship with Management

The Board shall delegate responsibility for the day-to-day operations and administration of the Company to the Managing Director/Chief Executive Officer. The specific responsibilities delegated to the Managing Director/Chief Executive Officer are outlined in the Matters Reserved for the Managing Director/Chief Executive Officer Policy.

In addition to formal reporting structures, members of the Board are encouraged to have direct communications with management and other employees within the Company to facilitate the carrying out of their duties as Directors.

11. Director Independence

In determining the independent status of a Director, the Board will consider Canadian National Instrument 52-110 “Audit Committees” and the matters set forth in Section 2 above,

Generally, an independent Director is a non-executive Director (i.e. is not a member of management) who does not have a material relationship with the Company. The following are examples of potentially material relationships with the Company:

  • having a relationship which could, in the view of the Board, be reasonably expected to interfere with the exercise of the Director’s judgement;
  • being, within the last 3 years, an employee or executive of the Company or an immediate family member of a employee or executive of the Company;
  • having, within the last 3 years been a material professional adviser or material consultant to the Company;
  • having, within the past 3 years, subject to certain exceptions, been the partner or employee of a firm that is the internal or external auditor of the Company, or had an immediate family member with whom they share a home, similarly engaged with the internal or external auditor of the Company;
  • receiving, or having an immediate family member who is employed as an executive officer of the Company who has received, more than $75,000 in direct compensation from the Company in any 12 month period during the past three years;
  • accepting, directly or indirectly, any consulting, advisory or other compensatory fee from the Company or a subsidiary, other than as remuneration for acting in their capacity as a Director; and
  • being a partner, member, or executive of an entity that provides consulting, legal, investment banking, or financial advisory services to the Company.

The duties in relation to conflict are of particular importance when a Director is considering whether or not he or she should attend and participate in Board meetings.

This rule requires a Director to avoid situations in which there is a “real and sensible possibility” of conflict between the Director’s personal interests and the Company’s interests. This duty is also of particular significance where Directors hold multiple directorships. While merely holding multiple directorships, even in competing companies, is not a breach of the rule against conflict, the rule will be breached if the Director discloses confidential information which the Director has gained as a result of their directorship of the other company.

Consequently, if a Director has a conflicting personal interest, whether direct or indirect, in a matter to be discussed at a meeting of the Board, they should first disclose this matter to the Board and then consider whether participating in the matter would result in a breach of their fiduciary duties.

A Director who has a personal interest in a matter that relates to the affairs of the Company is required to disclose this to the Company.

Directors who have a personal interest in a matter which could be reasonably expected to influence the Director’s judgement, generally must not attend a meeting of the Board while that matter is being considered or vote on the matter. However, a Director may do these things if a resolution of the Board is passed to this effect or if ASIC has given its consent.

Despite this, the same caution must be exercised as discussed above if the other Directors consent to the conflicted Director participating in the meeting. The conflicted Director should ensure that participation won’t be in breach of his or her fiduciary duties or the duties imposed by the Corporations Act.

12. Matters Reserved for the Board

In order to fulfill the Board’s responsibility for stewardship over the Company, the Board will undertake the following tasks:

1. Annual

  • In conjunction with management, establishing the goals (short, medium and long term) and strategy for the Company.
  • Maintaining a strategic planning process and approving the strategic plans and major operating plans of the Company, taking into account the opportunities and risks of the Company’s business.
  • Approving the annual operating budget.
  • Reviewing and providing feedback on the performance of the Managing Director/Chief Executive Officer.
  • Reviewing the performance of the Board, the individual Directors and any Board committees at least annually.
  • Reviewing and approving the full-year financial statements and Directors’ report.
  • Approving the annual report and notice of annual general meeting.
  • Reviewing the Company’s communication policy with regards to stakeholders including shareholders and regulators.
  • Reviewing the Company’s management information systems to ensure it is consistent with good governance practices and promotes effective internal controls.
  • Review the Company’s approach to corporate governance, including the Company’s corporate governance principles and guidelines.

2. Quarterly

  • Reviewing and approving the quarterly and half-year financial statements.
  • Reviewing and approving the quarterly budgets.
  • Satisfying themselves: (i) as to the integrity of the Managing Director/Chief Executive Officer and other executive officers, and (ii) that the Managing Director/Chief Executive Officer and other executive officers create a culture of integrity throughout the Company.

3. Monthly

  • Reviewing the activities and performance of the Company in meeting its objectives, based on approved operating plans and budgets.
  • Preparing for and participation in Board meetings.
  • Setting guidelines for the Managing Director/Chief Executive Officer in regard the appointment of other senior executives and staff required by the Company.
  • Approving the compensation level of the Managing Director/Chief Executive Officer in consideration to the recommendations of the Nomination and Remuneration Committee.
  • Endorsing the terms and conditions of senior executives (those staff reporting to the Managing Director/Chief Executive Officer).
  • Approving, on the recommendation of the Nomination and Remuneration Committee, superannuation arrangements for the Company’s employees.
  • Setting the remuneration of Directors, giving consideration to the recommendations of the Nomination and Remuneration Committee.
  • Ensuring a high standard of corporate governance practice and regulatory compliance and promoting ethical and responsible decision making.
  • Planning Board succession to ensure membership of the Board is skilled and appropriate for the Company’s needs.
  • Establishing and determining powers and functions of any Board committees and reviewing those powers and functions annually, or as circumstances demand.
  • Identifying and examining the principal risks of the Company’s business, maintaining an understanding of the risk profile of the Company, ensuring the implementation of appropriate systems to manage these risks, and when necessary, approving risk management policies, internal controls and codes of conduct.
  • Being satisfied that procedures are in place so that the stock exchanges on which the Company is listed and other applicable regulators are promptly and adequately informed of all material matters and that shareholders are informed of material matters as required by law.
  • Recommending to shareholders the appointment of the external auditors as and when their appointment or re-appointment is required to be approved by them.
  • Approving:
    • any changes to the capital of the Company, including capital restructures, capital returns, share buy backs and all new issues of securities in a Company. This includes the issue of shares or options provided in employment contracts.
    • operational and capital expenditure outside the approved budget and delegated authority limits;
    • mergers, acquisitions and disposals of businesses and/or equity investments and divestments;
    • all borrowing and debt funding arrangements and or changes to existing borrowing facilities;
    • significant property acquisitions and disposals; and
    • all other regulatory filing and matters required by law.

4. Ad hoc

  • Appointing and approving the terms and conditions of appointment of the Managing Director/Chief Executive Officer, Chief Financial Officer and Company Secretary.
  • Establishing appropriate levels of delegation to the Managing Director/Chief Executive Officer to allow him to manage the Company’s operations effectively.
  • Reviewing, and if appropriate approving, all draft technical reports provided by external consultants (the engagement of such consultants to be conditional upon a requirement that the consultant submit a draft of their report for consideration and comments by the Company with the final report only to be provided by the consultant when the draft has been approved by a Director of the Company).
  • Developing a Company policy for the review and approval of any transactions or agreements in which a director or executive officer has a material interest (“Conflict Transactions”) and reviewing, approving and overseeing any Conflict Transactions on an ongoing basis.

The Board may not delegate its overall responsibility for the matters listed above. However, the responsibility for the day-to-day operation and administration of the Company may be delegated by the Board to the Managing Director/Chief Executive Officer. The Board will ensure that the Managing Director/Chief Executive Officer and the management team is appropriately qualified and experienced to discharge their responsibilities and has in place procedures to assess the performance of the Managing Director/Chief Executive Officer and executive Directors. While there is a clear division between the responsibilities of the Board and management, the Board is responsible for ensuring that management’s objectives and activities are aligned with the expectations and risks identified by Board.

Matters Reserved for the Managing Director/Chief Executive Officer

1. Strategy

  • Formulating and reviewing, with the Board, the strategy for the Company and developing actions and plans to implement the strategy. Reporting to the Board on the progress against those plans.
  • Developing actions with the management team to implement the strategy.
  • Developing annual operating plans and budgets (with the Chief Financial Officer) in accordance with strategies endorsed by the Board.
  • Reporting to the Board regularly on the Company’s progress against the strategy.

2. Management team and employees

  • Negotiating terms and conditions of appointment of senior executives (reporting directly to the Managing Director/Chief Executive Officer) within guidelines set by the Board.
  • Appointing senior executives endorsed by the Board and other staff members within guidelines set by the Board.
  • Providing strong leadership to the management team and ensure all employees understand the strategy and operational plans and their part in their achievement.
  • Ensuring procedures and training are in place to provide a safe work environment.
  • Ensuring employees are educated on legal requirements and Company policies such that compliance is the culture and a high level of ethical behaviour is expected.

3. Board of Directors

  • Ensuring all matters requiring review or approval by the Board are brought to the Board with adequate information and time to allow proper consideration of such matters.
  • Advising the Board in a timely manner of any significant change in the risk profile of the Company together with actions taken or proposed.
  • Providing, with the Chief Financial Officer, certification to the Board on the integrity of the financial statements annually and half-yearly.
  • Ensuring Directors are continually informed on the business of the Company, the environments in which it operates and any changes in its obligations.

4. General

  • Ensuring effective communication with shareholders and the investment community in line with the Company’s shareholder communication policy.
  • Identifying business growth opportunities, evaluate these and present these to the Board for consideration and contribution.
  • All other matters necessary for the day-to-day management of the Company and not reserved for the Board

5. Delegated authority

  • The Board has established levels of delegated expenditure authority for the Managing Director/Chief Executive Officer and Chief Financial Officer.