At 29 August 2011, the Board included six non-executive directors, the Group Managing Director and an alternate non-executive Director. The TOWER Constitution requires a minimum of six directors and provides for a maximum of nine.
The Remuneration & Appointments Committee is responsible for identifying directors for appointment to the Board to ensure there is an appropriate blend of commercial skills and experience to govern and add value to TOWER and to ensure the Board works effectively. The Committee is also responsible for the Board Protocols which have been established to facilitate the effective operation of the Board. Current directors contribute significant commercial, financial, legal and investment skills to the Board.
Role of Chairman
The Chairman’s role is to lead and manage the Board so that it operates effectively, and to facilitate interaction between the Board and the Group Managing Director. The Chairman of the Board is elected by the directors. The Board supports the separation of the roles of Chairman and Group Managing Director and these roles have always been separate at TOWER. Bill Falconer was appointed Chairman of TOWER Limited on 29 August 2011.
Nominations, appointments and ongoing education
The Remuneration and Appointments Committee recommends to the Board suitable candidates for appointment as directors. The Committee will consider, among other things:
On appointment to the Board, directors receive a formal letter of appointment outlining their duties and obligations and are provided induction information about TOWER in the form of a Director’s Manual. The Director’s Manual contains historical background on TOWER and its operations, information about how the Group is structured, details of the Company’s directors’ and officers’ insurance, the Board Charter and other TOWER corporate governance policies. The induction process also involves one-on-one discussions with the Chairman, other directors and briefings from senior management to help new directors participate actively in Board decision-making at the earliest opportunity.
To ensure ongoing education, directors are regularly informed of developments that affect TOWER’s industry and business environment, as well as company and legal issues that impact the directors themselves. The Directors receive comprehensive board papers and briefing information before Board meetings, including a report from the Group Managing Director and divisional reports from the CEO of each business unit. Directors have unrestricted access to management and any additional information they consider necessary for informed decisionmaking. The Company Secretary is usually the first point of contact for such requests.
Senior management also attend Board meetings in order to provide presentations to the Board and answer any queries directors may have. This allows the Board to understand the practical issues affecting TOWER and the impact of these issues on its performance. Directors are expected to develop their skills, competencies and industry knowledge by taking responsibility for their continuing education. A Director may obtain independent professional advice relating to the affairs of TOWER or his/her responsibilities as a Director or Board Committee member. Where the Director has the approval of the Board Chairman or Committee Chairman to obtain independent professional advice, TOWER will meet the reasonable costs of the advice.
Director Independence
The Board Protocols require that a majority of the Board are independent directors. The Board regularly assesses the independence of each Director based on the interests disclosed by them. For this purpose directors are required to immediately advise the Board of any new or changed relationships so the Board can make this assessment. Based on the NZX Listing Rules and the ASX Corporate Governance Council Principles and Recommendations, the Board Protocols define a Director as being independent if he/ she is a non-executive Director who does not have any direct or indirect interest or relationship that could, or could reasonably be perceived to:
Examples of relationships that remove independence are relationships with a material TOWER customer, supplier, professional advisor or substantial shareholder. The Board considers that five of the directors are independent, namely: Bill Falconer, John Spencer and Susie Staley. The Board considers that Mike Jefferies and Michael Allen are not independent as a result of their appointment to the TOWER Board by Guinness Peat Group, a substantial shareholder of TOWER.
In accordance with TOWER’s Constitution, directors with an actual or potential conflict of interest on particular issues are required to disclose the conflict and may still attend meetings but will abstain from voting on that issue.
TOWER's Constitution
Retirement and re-election
At least one-third of the total number of directors must retire from office each year by rotation and, if they choose, stand for re-election by shareholders at the Annual Meeting. The directors who retire each year are those who have been in office longest since their last election. If two directors have held office for equal terms and cannot agree who will retire, it is determined by lot. The Group Managing Director is not required to retire by rotation. In addition, all directors appointed by the Board since the last Annual Meeting to fill a casual vacancy must stand for election. Shareholders will be provided with relevant information on the directors standing for re-election prior to the Annual Meeting to enable them to make informed decisions when voting.
Board and Committee Performance Review
The Board recognises that the performance of the directors, and Board Committees are crucial to TOWER’s success and to the interests of shareholders. The Board regularly reviews its own composition and performance and that of the Board Committees in accordance with the terms of the Board Charter (which also includes a review of the Board structure, policies, Board succession, delegations and the necessity for and composition of the Committees). The Remuneration & Appointments Committee is responsible for the regular performance management and annual appraisal of the Group Managing Director, individual directors and senior executives. Evaluations may be carried out by an external consultant. Director share ownership All Directors are required by the Company’s constitution to hold TOWER shares. Directors and management are required to comply with TOWER’s Insider Trading and Market Manipulation Policy when purchasing and disposing of TOWER securities.
Indemnities and Insurance
TOWER has given Deeds of Indemnity to directors for potential liabilities and costs they may incur for acts or omissions in their capacity as directors. Directors’ and Officers’ liability insurance is in place for directors and employees acting on behalf of TOWER and its subsidiaries. While the insurance covers risks arising out of acts or omissions of directors and employees acting for TOWER, it does not cover dishonest, fraudulent or malicious acts or omissions, or criminal liability
Attendance at Board and Committee Meetings
The Group Managing Director attends all Committee meetings and the Chief Operating Officer attends meetings of the Group Audit & Compliance Committee and Group Investment Committee. The Company Secretary attends all Board and Committee meetings, and is responsible for taking accurate minutes of each meeting and ensuring that Board procedures are observed.
Director Profiles