Corporate Governance
The Company’s current Corporate Governance
Principles are available on the Company’s website
at blackmores.com.au (go to ‘Investors’, then click on
‘Corporate Governance’). Should you not have access
to a computer, a copy of the principles can be obtained
by contacting the Company Secretary. A summary
of the content covered by each of Blackmores’
10 Corporate Governance Principles follows:
Principle 1:
Lay solid foundations for management
and oversight
Principle 1 covers the key governance responsibilities of
the Directors, which include:
•
the overall corporate governance of the Company
including its strategic direction, financial objectives,
and overseeing (or supervision) of control and
accountability systems;
•
approving the nominations of Directors to the Board;
•
ensuring management maintains a sound system
of internal controls to safeguard the assets of the
Group; and
•
monitoring the performance of the Group.
Principle 2:
Structure the Board to add value
This principle addresses protocols which are in place to
ensure that the Board reviews its composition from time
to time in an effort to ensure the Board benefits from an
appropriate balance of skills and experience.
Principle 3:
Promote ethical and responsible
decision-making
This Principle sets out a ‘Directors’ Code of Conduct’
which aims to ensure that Directors act honestly, in
good faith and in the best interests of the Company.
This Principle also sets out Blackmores’ policy with
respect to trading in Blackmores’ shares by Directors,
management and staff.
Principle 4:
Safeguard integrity in financial reporting
The Company is committed to a transparent system
for auditing and reporting of the Company’s financial
performance. Blackmores’ Audit Committee performs
a central function in achieving this goal. Principle 4 sets
out the key responsibilities and duties of the Audit
Committee and Blackmores’ policy on the appointment
of external auditors.
Principle 5:
Make timely and balanced disclosure
The Company is concerned to ensure that disclosure
of all material matters concerning the Company occurs
in a timely, honest and balanced manner. Principle 5
relates to the disclosure of such material matters.
Principle 6:
Respect the rights of shareholders
Principle 6 outlines key components of Blackmores’
efforts to ensure that shareholders and the investing
public have access to pertinent information concerning
the Company. Key communications include:
•
the annual financial report;
•
disclosures to the ASX;
•
notices and explanatory memoranda of annual
general meetings;
•
half yearly reports and shareholders’ newsletters; and
•
Blackmores’ website at blackmores.com.au.
Principle 7:
Recognise and manage risk
Principle 7 addresses how the Board ensures that an
appropriate framework of controls has been established
and maintained to ensure that areas of significant
business risk are being managed and monitored.
Principle 8:
Encourage enhanced performance
Principle 8 outlines how Board effectiveness is
ensured and maintained.
Principle 9:
Remunerate fairly and responsibly
Principle 9 addresses Blackmores’ remuneration policy
and the charter of its Remuneration Committee.
Principle 10:
Recognise the legitimate interests of
stakeholders
The Company has a Code of Conduct to provide
employees with guidance on what is acceptable
behaviour. Specifically, the Company requires that
all Directors, managers and employees maintain
the highest standards of integrity and honesty.
Principle 10 outlines key aspects of this Code which is
designed to ensure that the interests of all legitimate
stakeholders are recognised and respected.
Adoption of Corporate
Governance Principles
In accordance with the recommendations of the
Australian Stock Exchange Corporate Governance
Council announcement of March 2003, Directors
formally adopted the Principles as set out on our website
on 27 May 2004.
Recommendations Not Accepted
by Directors
The following identifies and explains why certain best
practice recommendations have not been adopted.
Principle 2:
Structure the Board to add value
Recommendation: The guidelines recommend that
the Chairperson be an independent Director.
Comment: Currently, Mr Marcus C Blackmore holds
the position of Executive Chairman. Mr Blackmore is
also the major shareholder in the Company. Given the
depth of his company experience and industry standing,
he is considered to be excellently placed to serve as
Chairman notwithstanding that pursuant to ASX
guidelines he is not considered ‘independent’. For these
reasons, the recommendation has not been adopted.
Recommendation: The guidelines state that a
Director is not ‘independent’ if he or she has served on
the Board for a period of time which could ‘reasonably
be perceived to materially interfere with the Director’s
ability to act in the best interests of the Company’.
Comment: The Company does not consider length of
tenure as a relevant disqualifying criteria for independence.
Principle 8:
Encourage enhanced performance
Recommendation: The Company should report
‘whether a performance evaluation for the board and
its members has taken place in the reporting period
and how it was conducted’.
Comment: Directors believe that evaluation is
a continuous matter and is not performed as an
extraordinary item once yearly. For this reason,
the recommendation has not been adopted.
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