September 2011
The Redundancy Payment Central Fund Ltd trading as Incolink and its Board are committed to achieving and demonstrating the highest standards of corporate governance. The board is made up of both employer and union representatives as determined by the trust in 1988. The board continues to review its framework and practices to ensure they meet the best interests of members. The company’s corporate governance framework was revised in 2011.
The directors are responsible to the members for the performance of the company in both the short and the longer-term and seek to balance sometimes competing objectives in the best interests of the company as a whole. Their focus is to enhance the interests of members and other key stakeholders and to ensure the company is properly managed.
Day to day management of the company’s affairs and the implementation of the corporate strategy and policy initiatives are formally delegated by the board to the Chief Executive Officer and senior managers. The relationship between the board and senior management is critical to the company’s long-term success.
A description of the company’s main corporate governance practices is set out below. All these practices, unless otherwise stated, are in place at June 2011.
Board of Directors
The Board operates in accordance with the Constitution of the Company and the terms of the Trust Deeds of the various trusts of which the Company is a Trustee.
Board Composition
The Board is composed of 10 office bearers namely:
- Chairman, both independent and non-voting
- Chief Executive Officer, non-voting
- 8 Directors, made up of 4 Union and 4 Employer Association representatives.
There must be:
- Not less than 8 voting directors; and
- Not more than 8 voting directors.
Every voting director must be nominated by an employer association or union in the Victorian Building and Construction Industry. These are
- 3 nominated by MBAV
- 1 nominated by MBAV, after 4/5ths recommendation from five participating associations
- 1 CEPU – Plumbing Division
- 3 CFMEU – Construction & General Division
Principal stakeholders in RPCF are the following industry organisations:
Employers
- AMCA - Air conditioning and Mechanical Contractors Association of Victoria
- AWCIV - Association of Wall and Ceiling Industries Victoria
- MBAV - Master Builders Association of Victoria
- MPA - Master Painters Australia
- MP&MSAA - Master Plumbers & Mechanical Services Association
- VECCI - Victorian Employers Chamber of Commerce
- CCF – Civil Contractors Federation
Unions
- AMWU – Australian Manufacturing Workers Union
- AWU – Australian Workers Union
- CEPU – Plumbers Union
- CFMEU – Construction Forestry Mining Energy Union
- CFMEU – FFTS - Division (Victorian Branch)
- VTHC – Victorian Trades Hall Council
Responsibility
The responsibility of the Board is to act at all times in a responsible fiduciary manner in relation to the company’s financial dealings, as well as to.
- Ensure that the company has the ability to meet its debts as and when they fall due.
- Oversee the company including its control and accountability systems
- Appoint and remove the Chief Executive Officer or equivalent
- Where appropriate, ratify the appointment and the removal of senior executives
- Provide input into and final approval of management’s development of corporate strategy and performance objectives
- Review, ratify and monitor systems of risk management and internal control, codes of conduct and legal compliance.
- Monitor senior executives’ performance and implementation strategy
- Ensure appropriate resources are available to senior executives
- Approve and monitor the progress of major capital expenditure, capital management and acquisitions and divestitures
- Approve and monitor financial and other reporting.
Additionally the directors must act in good faith, avoid conflicts of interest and owe duty of care to the organisation
Director’s Independence
The Board has adopted specific principles in relation to directors' independence. In order to remain independent, the director must declare to the Chairperson and refrain from voting on related issues if the issue being voted on directly affects their particular stakeholder organisations or themselves personally.
Terms of Office
The Company’s Constitution specifies a 2 year term for employer representatives with the possibility of a further 2 year re-appointment. Union representatives remain on the board for as long as their organisations nominate them to the role.
Chairperson and Chief Executive Officer
The Chairperson is responsible for leading the Board, ensuring directors are properly briefed in all matters relevant to their role and responsibilities, facilitating Board discussions and managing the board's relationship with the company's senior executive and management.
The CEO is responsible for implementing company strategies and policies.
Independent Professional Advice
Directors have the right, for Board-related matters, to seek independent professional advice at the company's expense. Prior written approval of the Chairperson is required, but this will not be unreasonably withheld.
Corporate Reporting
The CEO makes the following certification to the Board:
- That the company’s financial reports are complete and present a true and fair view, in all material respects, of the financial conduct and operational results of the company and are in accordance with relevant accounting standards;
- That the above statement is founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the board and that the company’s risk management and internal compliance and control is operating efficiently.
Board Committees
The Board has established a number of committees to assist in the execution of its duties and to allow detailed consideration of complex issues. The outcomes of committee meetings are tabled at the subsequent board meeting.
Investment/Finance Committee
The Investments/Finance committee has authority, within the scope of its responsibilities, to seek any information it requires from any employee or external party.
The Investments/Finance Committee has appropriate financial expertise and all members are financially literate and have an appropriate understanding of the sector in which the company operates.
The Investments/Finance Committee has power delegated to consider and make recommendations to the Board on any significant investment matter of relevance to Incolink.
Remuneration Committee
Power delegated to conduct annual reviews of staff salaries and implement any decisions of the Committee resulting from any such review.
Also conducts periodic reviews of remuneration arrangements for members of the Board and makes recommendations to the Board.
Audit Committee
The Audit Committee is responsible for the review and reporting to the Board on bi-annual basis of company’s financial position as prepared by company auditors.
The Audit Committee is responsible for reviewing the external auditors’ report of Incolink’s operations and also for recommending a change in auditors if they see fit.
External Auditors
The company appoints external auditors who clearly demonstrate quality and independence. The performance of the external auditor is reviewed annually and applications for tender of external audit services are requested as deemed appropriate. Stannards was appointed as the external auditor in 1998.
Risk assessment and management
The Board is responsible for ensuring there are adequate policies in relation to risk management, compliance and internal control systems. Company policies are designed to ensure strategic, operational, legal, reputational and financial risks are identified, assessed, effectively and efficiently managed and monitored to enable achievement of the organisation's objectives.
Considerable importance is placed on maintaining a sufficiently strong control environment. There is an organisational structure with clearly drawn lines of accountability and delegation of authority. Adherence to the Code of Conduct (see below) is required at all times and the board actively promotes a culture of quality and integrity.
The company's risk management policy and the operation of the risk management and compliance system are managed by the organisation's Risk Management Committee which consists of senior staff chaired by the Finance Manager. The board and the Audit Committee receive annual reports from the Risk Management Committee which are required to meet quarterly
Health and safety
The organisation recognises the importance of occupational health and safety (OH&S) and is committed to the highest levels of performance. Incolink recognises it has both a moral and legal responsibility to provide a safe and healthy environment for its employees, sub-contractors, clients and the public. Incolink is committed to continually improving health and safety performance with an overall objective of “No Injuries”. Incolink acknowledges the best health and safety outcomes will be achieved through the joint cooperation of management and employees.
Employees through their representative will be consulted on all changes at the workplace and systems of work that may impact on their health and safety; on issues regarding identification and control of hazards; the suitability of facilities; and on the adequacy of training in relation to occupational health and safety.
Code of Conduct
The organisation has developed a Director’s Code of Conduct (the Code) which has been fully endorsed by the board and applies to all directors. The code reflects the highest standards of behaviour and professionalism and the practices necessary to maintain confidence in the organisation's integrity.
In summary, the Code requires that directors must never permit their personal or professional interests to conflict, or even appear to conflict, with the interests of Incolink. The Code and values are discussed with each new director as part of their induction training.
The full Code of Conduct is available by contacting Incolink.
An Incolink Staff Policy Manual exists for employees and is available on the company intranet.