The Board of Directors is responsible for and oversees the governance and management of CSR.
CSR's shareholders approve the appointment of Directors and hold them accountable for the performance of the Company. A key part of Directors' responsibility is to ensure that an effective corporate governance structure operates in the Company.
The governance structure shuld ensure that reasonable financial and growth targets are set and achieved and risk is properly managed, while taking into account the interests of shareholders, customers, employees, creditors and the general public. As well, CSR's corporate governance culture – our way of doing business – including leadership by the Board and senior management, is critical to CSR's continuing success.
This Board Charter sets out the functions of CSR's Board – describing the structure of the Board and its committees, the need for independence and other obligations of Directors.
Functions of the Board
The Board strives to build sustainable value for shareholders whilst protecting the assets and reputation of the Company. Its functions include:
- approving CSR strategies, budgets, plans and policies;
- assessing performance against business plans to monitor both the performance of management as well as the continuing suitability of business strategies;
- reviewing operating information to understand the state of the Company;
- considering management recommendations on proposed acquisitions, divestments and significant capital expenditure;
- considering management recommendations on capital management, the issue or allotment of equity, borrowings and other financing proposals, guarantees of non-group liabilities, and restructures;
- ensuring that the Company operates an appropriate corporate governance structure, in particular ensuring that CSR acts legally and responsibly on all matters and that the highest ethical standards are maintained;
- approving CSR's risk management strategy and frameworks and monitoring their effectiveness;
- considering the social, ethical and environmental impact of CSR's activities and monitoring compliance with CSR's sustainability policies and practices;
- maintaining a constructive and ongoing relationship with the exchanges and regulators, and approving policies regarding disclosure and communications with the market and shareholders; and
- monitoring internal governance including delegated authorities, and monitoring resources available to senior executives.
The Board also takes on the role of Nominations and Governance which includes the following functions:
- determining the appropriate size and composition of the board (in accordance with the Company's Constitution);
- monitoring the balance of skills and experience on the Board and, when necessary, appointing new Directors, for approval by shareholders;
- determining the appropriate criteria (necessary and desirable skills and experience) for appointment of directors;
- recommendations for the appointment and removal of directors; and
- review of Board succession plans.
The functions listed are matters which the Board specifically reserves for itself and does not limit the Board's overall duties and responsibilities. The Board may delegate consideration to a committee of the Board specifically constituted for the relevant purpose, to assist the Board to discharge its obligations.
Specifically, with the guidance of the CSR Board's Remuneration and Human Resources Committee:
- appointing, evaluating, rewarding or removing the Managing Director and approving appointments, the remuneration or removal of senior management, including the Chief Financial Officer and Company Secretary;
- defining the terms and conditions of appointment to and retirement from the Board;
- determining the remuneration of non-executive directors, within the aggregate amount approved by shareholders;
- overseeing induction for non-executive directors;
- the evaluation of the Board's performance;
- develop and maintain best practices human resources policies and procedures;
- overseeing CSR's remuneration framework;
- approving superannuation arrangements, guidelines for employee share plans, remuneration incentive policies, and recruitment, retention and termination policies; and
- reviewing succession planning for executives.
With the guidance of the Risk and Audit committee:
- approving policies on and overseeing the management of business and financial risks and foreign exchange, interest rate and commodity price risks;
- reviewing and monitoring processes and controls to maintain the integrity of accounting and financial records and reporting; including the independence and performance of the external auditor;
- reviewing CSR's corporate governance framework, including company policies and levels of authority;
- approving financial results and reports for public release as well as dividends to be paid to shareholders.
With the guidance of the Workplace Health, Safety and Environment Committee:
- monitoring key risks to the business in the areas of safety, occupational health and environmental issues;
- approving policies on and overseeing the management of workplace health, safety and environmental issues; and
- reviewing and monitoring CSR's strategic and operational approach to the environment and sustainability, as well as its activities in the community.
In addition, the Board may establish a Committee, for a limited time and purpose, to oversee a particularly important project or transaction.
Powers Delegated to Management
The Board shall delegate to the Managing Director the authority and power to manage the Company and its businesses within levels of authority specified by the Board from time to time. The Managing Director may delegate aspects of his/her authority and power but remains accountable to the Board for the Company's performance.
Beyond the functions reserved by the Board, the Board has delegated all authority to manage CSR and its business within the levels of authority specified by the Board from time to time. The Managing Director is required to report regularly to the Board on the progress being made by CSR's business units.
The Managing Director's role includes:
- effective leadership of the management team;
- the development of strategic objectives for the business; and
- the day-to-day management of CSR's operations.
The composition, structure and proceedings of the Board are primarily governed by the Constitution of the Company (a copy can be found on the Company's website) and the laws governing corporations in jurisdictions where the Company operates.
The Board aims to have at all times a Board of Directors with the appropriate mix of skills and experience relevant to CSR's businesses and the Board's responsibilities.
Appointment and re-election of Directors
The Board shall identify candidates with appropriate skills and experience to maintain the necessary mix of expertise on the Board.
Before appointment to the Board, candidates confirm that they will have sufficient time to meet their obligations to the Company, in light of other commitments.
For shareholder meetings where Directors are standing for election or re-election, the notice of meeting must include each candidate's biographical details, including skills, experience and qualifications; all material information in its possession relevant to a decision on whether or not to elect or re-elect a director (including details of relationships with the Company and other Directors); Directorships held; particulars of other positions which involve significant time commitments; the term of office already served; any other relevant information, as well as particulars required by law. Directors standing for election or re-election at a general meeting shall be asked to introduce themselves to shareholders at the meeting.
New Directors shall be provided with a formal letter of appointment setting out the terms and conditions of appointment, together with a timetable of Board and committee meetings as well as other commitments, information on the Company, and a copy of the Board Charter and relevant Company policies. New Directors shall execute a Deed of Indemnity, Insurance and Access (as approved by shareholders in 1999) and are required to execute an Agreement requiring the Director to promptly advise CSR of transactions in the Company's shares.
Non-executive Directors are subject to re-election by rotation at least every three years. Newly appointed Directors must seek re-election at the first general meeting of shareholders following their appointment. Directors appointed from 2001 will not seek re-election after serving for ten years.
The Chairman shall be elected by the Board and must be an independent non-executive director. The Chairman's role includes:
- providing effective leadership to the Board in relation to all Board matters;
- representing the views of the Board to the public;
- convening regular Board meetings throughout the year and ensuring that minutes of meetings accurately record decisions taken and, where appropriate, the views of individual Directors;
- guiding the agenda and conduct of all Board meetings;
- reviewing the performance of non-executive Directors and the Board;
- overseeing non-executive Director and senior management succession; and
- promoting consultative, productive and successful relations between the Board and management.
The Board appoints and removes the Company Secretary. All Directors shall have direct access to the Company Secretary.
The Company Secretary shall be accountable to the Managing Director, and to the Board through the Chairman, on all corporate governance matters.
The Company Secretary shall be responsible for communication with the Australian Securities Exchange about listing rule matters. The Company Secretary is responsible for the day-to-day operations of the Company Secretary's office including lodgments with relevant securities exchanges and other regulators, the administration of Board and Board Committee meetings (including preparation of meeting minutes), the management of dividend payments and associated share plans, the administration of CSR and oversight of the relationship with CSR's Share Registrar.
Keeping Directors Informed
The Chairman shall brief new Directors on their roles and responsibilities and make available the minutes and papers of Board and Committee meetings.
New Directors shall also be briefed by the Managing Director and other senior executives about the Company, its structure, people, policies and culture, the industries in which it operates and business strategies and performance. Their induction will include a series of site visits to review operations.
Board papers are distributed at least four days before each meeting. The Managing Director will send to Directors a comprehensive monthly performance report – whether or not a Board meeting is scheduled. Directors will have unrestricted access to Company records and information.
Time is to be allocated at Board and Committee meetings for continuing education on significant issues facing the Company and changes to the regulatory environment. This is to include briefings by management and external consultants from time to time. These briefings and inspections of operations shall be arranged so as to give Directors access to a wide range of employees.
Access to Independent Advice
Directors may obtain independent professional advice at CSR's expense on matters arising in the course of their Board and Committee duties, after obtaining the Chairman's approval. A copy of any such advice shall be provided to all other Directors and they must be advised if the Chairman's approval is withheld.
Non-executive Directors' Meetings
The Non-executive Directors are expected to meet on a regular basis, without management present. These meetings include a review of management performance, at the appropriate time.
Independence of Non-executive Directors
A majority of the Board must be independent Directors.
To be judged independent, a Director must, in the opinion of the Board, be independent of management and have no material business or other relationship that could interfere with – or could reasonably be perceived to interfere with – the proper exercise of that Director's duties.
Individuals would, in the absence of evidence or convincing argument to the contrary, be judged to be not independent if they were:
• recently employed by CSR or any of its subsidiaries; or
• directly involved in the audit of CSR or any of its subsidiaries; or
• directly involved in the provision of advice or consulting services to CSR where the amount paid during the year for that advice or services exceeded 5% of the total fees earned by that firm or 1% of CSR’s consolidated group revenue; or
• directly involved with a supplier to the Company where the amount paid during the year by CSR to that supplier exceeded 5% of the consolidated group revenue of that Company or 5% of CSR’s consolidated group revenue; or
• directly involved with a customer of the Company where the amount paid during the year by that customer to CSR exceeded 5% of the consolidated group revenue of that Company or 5% of CSR’s consolidated group revenue; or
• a substantial shareholder of CSR, or an officer of, or otherwise associated directly with, a substantial shareholder.
Any change in the nature of the independence status of a non-executive director must be promptly notified to the Chairman and Company Secretary.
Conflict of interest
Directors must keep the Board advised, on an ongoing basis, of any interests that could potentially conflict with those of CSR and shall advise the Company Secretary of all Directorships held in other companies.
If a potential material conflict of interest arises, the Director concerned shall advise the Chairman prior to any Board meeting at which the issue is to be discussed. The Director shall not receive the relevant Board papers and shall leave the Board meeting while the relevant matter is considered. Any potential conflict of interest must be recorded in the Board minutes.
Directors are required to notify the Chairman before accepting a role with another listed company, or any role which carries a substantial workload or has the potential to create a conflict of interest with CSR.
The Board shall operate three Committees, each comprising at least three independent, non-executive Directors:
- Risk and Audit Committee
- Remuneration and Human Resources Committee
- Workplace Health, Safety and Environment Committee
The Chairman of the Board may chair the Remuneration and Human Resources Committee, but not the Risk and Audit committee. When appointing members of each Committee, the Board shall take account of the skills and experience appropriate for that Committee as well as any statutory or regulatory requirements.
The three Committees operated by the Board shall consider and determine the matters for which they are responsible in accordance with their Charter. Copies of the charter of each Committee are published on the Company's website. All Directors are invited to attend any Committee meeting and can access Committee papers at all times.
Review of Board, Committee and Individual Directors' Performance
The Board, often through the Remuneration and Human Resources Committee, shall regularly carry out a formal review of the performance of the Board, its Committees, and each non-executive Director. The review shall involve obtaining feedback from Directors and those senior CSR people interacting with the Board and its Committees. The review shall assess:
- the effectiveness of the Board and each Committee in meeting the requirements of its Charter;
- whether the Board and each Committee has members with the appropriate mix of skills and experience to properly perform their functions;
- the contribution made by each Director at meetings and in carrying out their responsibilities as Directors generally, including preparing for meetings;
- whether adequate time is being allocated to CSR matters, taking into account each Director's other commitments;
- the independence of each Non-executive Director, taking into account the Director's other interests and Directorships;
- whether the content, format and timeliness of agendas, papers and presentations provided to the Board and each committee are adequate for them to properly perform their functions; and
- any other comments or suggestions made during the feedback process.
The Remuneration and Human Resources Committee shall annually review the performance of the Managing Director and any other executive Directors as may be appointed. This is in line with CSR's annual performance appraisal and salary review process, which requires that the performance of each executive be evaluated against pre-set goals, taking into account feedback from the executive's senior manager as well as peers and the people who report to them.
The Board approves guidelines/charters against which the Board, Committees established by the Board and individual Directors are appraised. The outcomes of performance assessments, along with plans and objectives for the new financial year, are submitted to the Board for consideration.
Shareholding in CSR
All Directors and senior management are encouraged to acquire a beneficial interest in CSR shares equivalent in value to one year's fixed remuneration, to be valued at the time of purchase.
Restrictions on share dealings by Directors
In accordance with the CSR Share Trading Policy and the ASX Listing Rules, Directors and senior management may only buy or sell CSR shares, or give instructions about their participation in the CSR share plans, during the month commencing 24 hours after the date of the annual and half yearly results announcements and the annual general meeting. Directors must advise and obtain clearance from the Chairman before trading in CSR shares. Directors are prohibited from buying or selling CSR shares at any time if they are aware of any market sensitive information that has not been made public.
All CSR share dealings by Directors must be promptly notified to the Australian Securities Exchange.
A copy of CSR's Share Trading Policy is available on CSR's website.
All proceedings of the Board, including Board papers, presentations and other information provided to the Board, shall be kept confidential except as required by law or as agreed by the Board.
Code of conduct
The Company shall have a Code of Business Conduct and Ethics which sets out the way CSR conducts business and guides the behaviour of everyone in CSR – employees and Directors – clearly stating the Company's firm commitment to behaving honestly and fairly. It is available on the Company's website.
Reviewed & updated: 30 March 2016