Good corporate governance creates and sustains an ethical and legal environment which recognises the interests of all stakeholders in a Corporation. The Board of Port Authority of New South Wales is responsible for overall corporate governance of the Corporation and has adopted corporate governance practices and procedures that are appropriate to manage Port Authority of New South Wales in the best interests of the Shareholding Ministers and other stakeholders.
The Board has adopted the NSW Treasury Guidelines for Boards of Government Businesses (Guidelines) and this corporate governance section outlines Port Authority of New South Wales’ governance practices during 2011/12. Port Authority of New South Wales complies with each of the recommendations.
The Board is responsible for overseeing the business and commercial affairs of Port Authority of New South Wales including:
The Chief Executive Officer is responsible for the day to day management of the operation of Port Authority of New South Wales in accordance with the general policies and specific directions of the Board. It is the responsibility of the Board to oversee the activities of management in carrying out these delegated duties.
The Board’s role and responsibilities to each key stakeholder are set out in the Port Authority of New South Wales’ Board Charter.
Port Authority of New South Wales’ Code of Conduct outlines the general business ethics and acceptable standards of professional behaviour we expect of all our Directors, employees and contractors. The Code of Conduct, which is given to all new staff as part of their induction, makes everyone at Port Authority of New South Wales accountable for their own decisions and conduct.
The Code of Conduct covers general behaviour expectations, fraud and corruption responsibilities, including policies on acceptance of gifts, benefits, ethics and conflicts of interest requirements. Staff are encouraged to report any suspected breaches and, if they do so, will be protected as detailed in Port Authority of New South Wales’ Protected Disclosures Policy.
The Code is available to all staff on the Port Authority of New South Wales intranet. The Code also interacts with other more detailed policies concerning Reporting Fraud and Corruption, Disciplinary Policy, Protected Disclosures Policy and Sponsorship, Gifts and Memberships Policy.
The Board receives a summary of any breaches and resulting actions on an annual basis, however any significant breaches must be immediately reported to the CEO.
To assist the Board in discharging its functions and to allow a more detailed analysis of the specialised areas of finance, risk, audit, human resources, governance, remuneration and major projects, the following committees have been established:
Each Committee has a clear Charter setting out the Committee’s roles, responsibilities and delegated authority from the Board. The Charter of the Board and all Board Committee Charters are reviewed on a regular basis and updated as required.
Audit and Risk Committee
The Chairman of the Audit and Risk Committee is Robert Dunn. Robert is an independent non-executive Director, who is not the Chairman of the Board. The other members of the Committee are Nicholas Whitlam, who is an independent non-executive Director and Penny Bingham-Hall, who is also an independent non-executive Director.
Each of the members of the Committee is financially literate and has knowledge of the business. Robert Dunn has qualifications and experience in accounting. The Board considers the mix of skills and experience on the Audit Committee appropriate to meet the responsibilities of its Charter.
The Committee is responsible for oversight and review of:
Please refer to the Audit and Risk Committee Charter.
Remuneration and Human Resources Committee
The Chairman of the Remuneration and Human Resources Committee is Penny Bingham-Hall. Penny is an independent non-executive Director, who is not the Chairman of the Board. The other members of the Committee are Nicholas Whitlam who is an independent non-executive Director and Robert Dunn, who is also an independent, non-executive Director.
The Remuneration and Human Resources Committee is responsible for assisting the Board in fulfilling its remuneration responsibilities in regard to:
Please refer to the Remuneration and Human Resources Committee Charter.
The Chairman of the Nominations Committee is Nicholas Whitlam. Nicholas is an independent non-executive Director. Another member of the Committee is Penny Bingham-Hall, who is an independent non-executive Director.
The Nominations Committee meets on a regular basis and is responsible for assisting the Port Authority of New South Wales Board in fulfilling its corporate governance responsibilities with regard to Board composition. This includes assessing the necessary and desirable skills and experience of directors, ensuring directors have the appropriate mix of competencies and identifying skills and experience to fill those gaps and overseeing induction and continuing education of directors.
Please refer to the Nominations Committee Charter
Under the State Owned Corporations Act (NSW) 1989, Port Authority of New South Wales Board is required to have a minimum of three (3) Directors and a maximum of seven (7) Directors. One of these Directors is required to be a staff Director, elected by the staff of Port Authority of New South Wales.
Directors are appointed by the Governor, on the recommendation of the Voting Shareholders.
The Voting Shareholders appoint the Chairman, who is currently Nicholas Whitlam. Nicholas is an independent Director and his role is clearly separated from the role of the Chief Executive Officer, Grant Gilfillan.
Nicholas is currently on the board of a number of other organisations, one of which is a government board. The Chairman is responsible for leading the Board and facilitating its effective functioning.
Chief Executive Officer (CEO)
The Chief Executive Officer, Grant Gilfillan, was appointed in January 2008 and was re-appointed for a second term in March 2011. As set out in the State Owned Corporations Act (NSW) 1989, the Chief Executive Officer was appointed by the Governor on the recommendation of the Portfolio Minister, following a recommendation from the Board. The Board’s recommendation of Grant Gilfillan came after an extensive recruitment process.
The Chief Executive Officer is responsible for the day to day management of the operation of Port Authority of New South Wales in accordance with the general policies and specific directions of the Board.
All Directors are expected to exercise independent judgment when making Board decisions. It is the approach and attitude of each non-executive Director which is critical to determining independence and this must be considered in relation to each Director while taking into account all other relevant factors, which will include an assessment against the independence recommendations in the guidelines which cover whether the Director:
* Material means greater than 5% of the Corporation’s gross revenues.
The independence of each Director is reviewed on an annual basis to ensure circumstances that may affect the independent status of a Director have not changed.
Michael Sullivan is the staff elected Director, and due to his employment by Port Authority of New South Wales is not considered independent. All other Directors are considered independent.
Access to Information and Independent professional advice
Each Director has the right of access to all Port Authority of New South Wales’ information and employees. Further, the Board and each individual Director, subject to informing the Chairman, has the right to seek independent professional advice from a suitably qualified advisor, at the Sydney Port’s expense, to assist them to carry out their responsibilities. Where appropriate, a copy of this advice is to be made available to all other members of the Board.
Conflicts of interest
Port Authority of New South Wales maintains a conflicts register which registers any interests of Directors which may potentially conflict with their duties as a Director of Port Authority of New South Wales, including, other board positions.
Directors are required to update this register on an ongoing basis as circumstances change.
In addition, Directors are required to advise NSW Treasury of any interests or changes in interest.
Directors advise Treasury of any potential conflicts on appointment and the Company Secretary provides Treasury with any updates to these details.
In relation to specific Board decisions, the Board complies with Clause 2, Schedule 10 of the State Owned Corporations Act (NSW) 1989. A Director cannot take part in discussions or vote on a matter in which that Director has a material personal interest, unless the Board resolves that the interest does not disqualify the Director. There have been no related-party transactions between Port Authority of New South Wales and any Director during the year.
Other board memberships
The guidelines recommend that Directors should not hold directorships of more than three Government boards. None of Port Authority of New South Wales’ Directors have exceeded this limit. Directors inform the Chairman prior to accepting any new appointments.
The Board of Directors of Port Authority of New South Wales meets on a monthly basis and more regularly as circumstances require.
The Company Secretary is responsible for providing administrative and corporate governance support to the Board of Directors. This includes ensuring that the Board receives papers for Board and Committee meetings in advance of each meeting and attendance at Board and Committee meetings to take minutes.
The Company Secretary is appointed and removed by resolution of the Board. Regina Abood (B Com, FCIS) is the Company Secretary of Port Authority of New South Wales.
Director remuneration, appointment and education
When appointed, Directors are provided with a letter of appointment from the Voting Shareholders specifying their term of appointment and remuneration. In addition, Port Authority of New South Wales provides new Directors with an information pack to assist them in understanding Port Authority of New South Wales’ business and the requirements of the role. Information provided includes:
New Directors are also provided with a Deed of Access and Indemnity in the form approved by NSW Treasury.
The remuneration for Directors of Port Authority of New South Wales is determined by the Voting Shareholders.
In addition, new Directors are provided with access to an induction program which includes a series of meetings with the Chairman, Chief Executive Officer and key executives to gain an understanding of Port Authority of New South Wales’:
All other Directors are encouraged to continue their education. The Board followed a continuing education program for 2011/12 covering practical director skills courses, site visits and briefing on issues relevant to Port Authority of New South Wales’ operations.
In addition, Port Authority of New South Wales funds Directors’ membership of the Australian Institute of Company Directors and attendance at specific courses or conferences if appropriate.
The Board believes it is important to evaluate its own performance and that of each Director on a regular basis. To facilitate this, the Chairman provides regular informal feedback to individual Directors.
During 2009/10 NSW Treasury conducted an extensive review of State-owned Corporation boards. The NSW Treasury report was released in the second half of 2010 and provided feedback on the performance of the Port Authority of New South Wales Board and its governance practices.
In 2011, the Board engaged an external consultant to conduct a performance evaluation of the Board, its Committees and individual Directors, to assess progress since the implementation of the outcomes and recommendations of the Treasury Board Review. This involved a thorough process of individual interviews, survey completion and Board workshops.
In 2012, Board performance evaluation will be undertaken in the second half of the year.