Roles and Responsibilities of the Shareholder, Board and management
The corporate governance principles have regard to the respective roles and responsibilities of the Government of Tasmania as Shareholder; the Board as custodians of the business; the Chairman as leader of the Board, the CEO as the key linkage between Board and management and the Corporation Secretary in ensuring the implementation of Board directives and good governance throughout the Corporation.
The Shareholder
In fulfilling its obligations the Board of the Corporation expects that the Government of Tasmania as owner will:-
(i) provide the Corporation with clear indication of its expectations about the Corporation’s objectives, targets and performance (the Corporation may provide advice to the shareholder about the objectives and parameters);
(ii) ensure that the responsible Minister and where appropriate the Treasurer meet on a regular basis with the Chairman or any other member of the Board delegated for a particular purpose to review and, if necessary, amend the objectives and targets and to define the parameters within which the Corporation may operate;
(iii) provide the Board with its reaction to the Corporate Plan and any changes proposed to it in a timely manner;
(iv) be clear about any prohibitions regarding the Corporation’s future directions, and
(v) inform the Board of any changes in the direction it wishes the Corporation to pursue within the framework of the GBE Act.
The Board
The Board of the Corporation must take note of the Shareholder’s objectives and advise the Shareholder of any inconsistencies with the policies and decisions of the Shareholder which may limit the ability of the Corporation to meet its objectives.
The Board has an obligation to advise the Shareholder of any actual or anticipated restraints on achieving the Corporation’s objectives or targets.
The fundamental constraints on the Corporation are:-
(i) it will not do anything unlawful;
(ii) it will not take any commercial or operational decision that exposes the assets or income of the Corporation to an unacceptable level of risk, and
(iii) it will not act outside its charter without specific approval of the Shareholder.
The role of the Board is, inter alia, to interact with Management in determining strategy, and to oversee, monitor and provide direction to management of the Corporation. It shall ensure that the relationships between the key parties are working effectively in the Corporation’s interests. Each Board member has an obligation to raise any relevant issue of strategy, policy, management or compliance.
The Board’s responsibilities include:-
(i) interaction with Management in determining the business strategy of the Corporation;
(ii) ensuring that the business and affairs of the Corporation are managed in a manner that is in accordance with sound commercial practice,
(iii) monitoring the Corporation’s performance and the implementation of the strategy;
(iv) setting the policy framework for the Corporation’s operations;
(v) advising the Shareholder on a frequent and regular basis on the Corporation’s strategic directions;
(vi) ensuring compliance with all statutory requirements and regulations as well as the Treasurer’s Instructions in relation to the performance of the Corporation including the Board, and
(vii) recommending to the Minister in the case of appointment of the CEO; and the Minister and the Treasurer in the case of directors (through the Director Selection Advisory Panel) suitable persons to the respective appointments.
The Chairman
The Chairman of the Corporation is responsible for providing leadership to the Board and for representing the Corporation in statutory relations with the shareholders, including accounting to the Parliament and the public.
A key relationship exists between the Chairman and the CEO and neither person should act in a way that prejudices or detracts from the effective professional working of that relationship. A key role of the Board is to be satisfied that the relationship is working to the benefit of the Corporation and the Shareholder.
The Chairman and CEO shall manage the Corporation’s external relations so as to maintain the profile of the Corporation and a reputation for integrity and competence.
The Chairman, in conjunction with the Corporation Secretary, is responsible for arranging Board meetings and ensuring the appropriateness of the agenda for those meetings and of the operations of the Board Committees.
The Chief Executive Officer
The CEO is the key linkage between the Board and management of the Corporation.
The role of the CEO is to:-
(i) administer the Corporation so as to meet the agreed objectives and targets,
(ii) ensure the Board is fully and frankly advised on any material issues that might affect the performance of the Corporation,
(iii) appoint the senior management of the Corporation and to report regularly to the Board on their performance,
(iv) ensure the Corporation meets all its statutory obligations, and
(v) in conjunction with the Chairman, publicly represent the Corporation.
Role of the Board
The Board is also established by the GBE Act and is responsible for ensuring the business and affairs of the Corporation are managed in accordance with sound commercial practice. It must ensure the performance of its functions and the achievement of its objectives.
The objectives of the Corporation, its functions and powers for which the Board is responsible are set out in Sections 7, 8 and 9 of the GBE Act. The Board may delegate any of its functions or powers other than the power of delegation (Section 15).
The role of the board is categorised below. Its role is to:-
Corporate Objectives, Strategies, Directions and Policies
(i) identify the broad objectives of the Corporation within the framework of the requirements of the GBE Act (1995) as amended;
(ii) develop strategies and policies which are directed towards achieving the Corporation’s objectives;
(iii) join in the identification and to encourage the formulation and development of strategies, policies and business initiatives to be brought forward for its consideration;
(iv) consider and approve business initiatives presented by management (including significant changes to existing arrangements), monitor progress of approved initiatives and progress towards meeting the Corporation’s objectives and, where appropriate, make recommendations to Government of Tasmania;
(v) empower management to implement the approved strategies and business initiatives;
(vi) ensure that policies on key issues, including exposure to various risks, are in place and are appropriate for the business;
(vii) monitor the external environment to identify and consider those factors which may affect the Corporation’s business; and
(viii) approve the Corporation’s values and foster a corporate culture which is consistent with the objectives of the Corporation.
CEO and Senior Executive Positions
(i) recommend the appointment and remuneration, and annually monitor the performance, of the CEO and the Corporation Secretary;
(ii) review and approve the Senior Executive Structure of the Corporation, with recommendations brought forward by the CEO;
(iii) to approve the Delegations manual;
(iv) review and approve the appointment and remuneration of General Managers reporting to the CEO and monitor their performance, with recommendations brought forward by the CEO; and
(v) review and approve succession plans for the CEO and Senior Executives of the Corporation.
Corporate Plans, Budgets and Performance Monitoring
(i) review and approve corporate plans and budgets, and set appropriate Key Performance Indicators (KPIs);
(ii) monitor performance against those plans and budgets, reviewing management’s implementation and take corrective action where necessary;
(iii) conduct a regular review of performance against broader KPI’s including competitor/benchmark comparisons; and
(iv) establish and maintain a process for the identification, monitoring and mitigation of risk.
Shareholder Relationships
(v) report to shareholders from time to time on the affairs of the Corporation as required by the GBE Act (1995);
(vi) keep shareholders informed of proposed major developments and initiatives in the business; and
(vii) demonstrate full and open disclosure in the Corporation’s dealings with all stakeholders.
Regulatory Compliance
(i) ensure that an effective system of internal control is in place for and monitor the operation of the:
- accounting and financial reporting;
- internal audit;
- adherence to Corporation policies; and
- compliance across the business with applicable laws, regulations, Industry Codes and applicable Treasurer’s Instructions
(ii) establish an audit committee to oversee the external and internal audit scope and processes, and to consider and review audit reports;
(iii) review and approve the annual financial statements to ensure that they conform with applicable accounting standards and any other legislative and/or regulatory requirements; and
(iv) ensure that the Corporation identifies and responds to emerging risks and regulatory and bureaucratic constraints;
Board Effectiveness
(i) review and assess its own performance including the balance of competencies represented by its members;
(ii) identify and recommend new directors as required;
(iii) establish appropriate Committees of the Board to assist the Board in carrying out its responsibilities and to monitor the effectiveness of those Committees; and
(iv) ensure access for the Board or individual Directors to external advisors with appropriate skills and relevant, technical, commercial and legal areas to assist the Board in carrying out its responsibilities.
Role of the Chairperson
The Chairperson’s position is established by Section 11 of the GBE Act.
The Chairperson represents the Board in the ongoing performance of its role tasks and accountabilities.
The Chairperson is the public representative of the Board.
It is the Chairperson’s Role to:
Chair the Board
(i) settle Board Agendas in liaison with the CEO and Corporation Secretary and convene meetings of the Board;
(ii) ensure appropriate matters are brought before the Board for information, discussion or decision, including matters which Directors may wish to raise;
(iii) foster a climate of openness, common purpose, and debate in an orderly manner where contributions by all members are valued;
(iv) chair Board meetings in a manner which results in consensus and commitment to clear and unambiguous Board decisions;
(v) direct Board discussions to effectively address the matters before the Board and the critical issues (if any) facing the business; and
(vi) ensure Board minutes properly record Board decisions and the business conducted at the meetings.
Leadership and Responsibilities
(i) act as spokesperson for the business in matters that call for communications with the Portfolio Minister, the Treasurer, the Government of Tasmania and Parliament;
(ii) provide parliamentary and government liaison;
(iii) make public announcements, as may be required, pertaining to the business’ operations;
(iv) develop productive, ongoing and mutual relationships with the CEO and the Corporation Secretary;
(v) delegate functions and powers to the CEO where the Chairperson or other Directors are unavailable, or as agreed;
(vi) act as mentor for the CEO;
(vii) ensure the CEO is aware of the Board’s expectations in terms of performance and information;
(viii) ensure appropriate relationships between individual directors and executive team members
(ix) chair other formal meetings of the business as may be required;
(x) oversee the preparation, finalising and publication as required of the Annual Report; and
(xi) develop a draft annual agenda to plan Board activities, list items for Board consideration and set down regular Board meeting dates for the coming year.
Board Direction
(i) be primarily responsible for the direction and effectiveness of the Board;
(ii) review Board Membership and Succession Planning, including submission of any Board recommendation for the appointment of a CEO to the Portfolio Minister and the Premier, or for the appointment of other directors to the Portfolio Minister and the Treasurer;
(iii) monitor and review the adequacy of the information to be presented to the Board for its decision making;
(iv) obtain further information which the Chairperson or a Director considers necessary for consideration and decision making on any matter relevant to the Board including obtaining external advice or the making of independent enquiries;
(v) ensure the timely dissemination of information relevant to the Board’s deliberations;
(vi) ensure the Board has defined its role and relationship with management to enable both to function effectively and efficiently;
(vii) ensure the Board properly discharges its legislative responsibilities;
(viii) advise and counsel Board members;
(ix) between meetings act as a link between the Board and the CEO and senior management;
(x) oversee the establishment and operation of Board committees, including their composition, terms of reference, effectiveness and remuneration;
(xi) ensure that the performance of the Board, collectively and individually, is reviewed annually in order to ensure the Board, as a whole, performs effectively;
(xii) consider requests from a Director or the Directors collectively or from a Committee of the Board for obtaining independent advice and to make any necessary arrangements for the provision of that advice including authorising payments for advice and services provided; and
(xiii) list for discussion by the Board any request or suggestion by a Director for independent advice to that Director or the Board on any relevant matter.
Role of the CEO
Section 19 of the GBE Act 1995 provides the statutory basis for the Role of the CEO. Specifically, it states the CEO is responsible to the Board for the general administration and management of the GBE. Additionally, the CEO must perform any functions, and exercise any powers, delegated to him or her by the Board.
This document is designed to set down and clarify the responsibilities of the CEO and, if also a Director, the responsibilities as a director so that they can be readily integrated into the overall governance of the Corporation. Each section of the document has been drawn to respectively reflect the management, business and leadership roles required of a CEO.
The CEO is responsible to the Board for crying out the role of the position under the following areas:
General Administration and Management of Hydro Tasmania
(i) generally administer and manage the day-to-day operations of the Corporation in accordance with the Corporate Plan, the Ministerial Charter, relevant legislative requirements and the requirements of the Board;
(ii) ensure implementation of the decisions of the Board in conjunction with the Corporation Secretary;
(iii) ensure that all actions comply with the Corporation's policies in force from time to time;
(iv) make recommendations for the setting of controls, managing risks and the development of future strategies;
(v) take and approve all and any actions and initiatives required to implement the broad objectives, guidelines and policies established by the Board;
(vi) inform the Board on issues where the CEO has special knowledge or experience;
(vii) regularly advise the Board on the operating and financial performance of the Corporation;
(viii) consult with the Chairman and the Corporation Secretary in connection with the preparation of an annual Board agenda and the agendas and papers for meetings of the Board;
(ix) ensure the Corporation’s compliance with Treasurer’s Instructions on issue from time to time;
(x) advise the Board promptly of any adverse developments within the meaning of Section 13 of the GBE Act, or generally;
(xi) perform functions normally undertaken by the Chairman at the request of the Chairman or the Board;
(xii) ensure that transactions outside the CEO's delegation levels are referred to the Board for approval; and
(xiii) perform any functions and exercise any powers delegated by the Board to the CEO.
Identification and Capture of Business Opportunities
(i) interact and interface with the Board to identify and capture such opportunities; and
(ii) ensure that strategic issues are identified, well considered and brought forward in a timely and manageable manner.
Provide Organisational Leadership which Promotes the Corporation's Vision and Values
(i) demonstrate commitment to the Corporation's values;
(ii) promote the Corporation to both internal and external stakeholders;
(iii) coach and mentor senior staff; and
(iv) engender a creative link between the Board and the management in the alignment of the Corporation with its strategic directions.
Role of Individual Directors
In performing and exercising the functions and powers of his or her office, Part 5 of the GBE Act imposes certain statutory duties upon a director of the Corporation. The role of directors, acting in accordance with those duties, is to ensure the Board meets its responsibility to the Portfolio Minister and the Treasurer under section 12 of the GBE Act.
Co-existing with this specific statutory responsibility, a director also has at law a fiduciary responsibility to the Corporation and to use due care and diligence in fulfilling the functions of his or her office.
The Director’s role is to:
Conformance
(i) use the powers of office with the level of skill and care expected to discharge his or her duties in good faith, honestly and for a proper purpose in the best interests of the Corporation;
(ii) understand the business of the Corporation in its competitive, commercial context and to act with required care and diligence, demonstrating commercial reasonableness in the decision making process;
(iii) make reasonable inquiries to ensure that the Corporation is operating efficiently, effectively and legally towards achieving its goals;
(iv) in a timely manner, ensure he or she is provided with adequate information in connection with Government policy and future issues likely to impact upon the Corporation;
(v) ensure they have and maintain adequate knowledge of their legal responsibilities and are familiar with legislation regulating the operation of the Corporation;
(vi) have and maintain an adequate knowledge of the Corporation’s internal organisation and operating performance;
(vii) where appropriate, with the Chairperson’s approval, obtain independent advice and assistance to carry out the director’s responsibilities;
(viii) adhere to the values of the Corporation in his or her dealings with members of the Corporation and the broader business community; and
(ix) maintain a broad familiarity with the actual operation of the business at its various sites.
Performance
(i) where practicable, attend all meetings of the Board or a committee of the Board of which he or she may be a member;
(ii) prepare adequately for meetings of the Board or of a committee by obtaining and thoroughly reviewing all agenda items;
(iii) undertake diligent consideration of all proposals placed before the Board and the critical issues (if any) facing the Corporation;
(iv) question, request information, raise an issue and fully canvass all aspects of any issue confronting the Corporation and cast a vote on any resolution according to one’s own decision;
(v) be independent in judgement and actions and to take all reasonable steps to be satisfied as to the soundness of all decisions taken by the Board;
(vi) encourage management to monitor and consider broader perspectives of business from different industries and bring forward for discussion in a constructive and creative way suggestions, propositions and ideas in connection with the growth development and improvement of the Corporation;
(vii) encourage management to take reasonable steps to be in a position to identify new business and other entities with which alliances might be considered by management in order for it to leverage opportunities in the business community; and
(viii) encourage management to take all reasonable opportunities to represent, promote and demonstrate a commitment to the Corporation within the business community and to the public at large.
Role of Management
Part 5 of the Government Business Enterprises Act imposes certain statutory duties upon officers of the Corporation. An “officer” is defined to include a person who is concerned with, or takes part in, the management of the Corporation (Section 3) (emphasis added). Subject to the overall supervision of the Board and its Committees, the management must ensure it complies with those duties, and other general law duties, in meeting its day to day responsibility to manage and operate Corporation resources in accordance with the delegated authority of the Board.
Business Management
The role of Management is, under the general direction of the CEO, to:
(i) manage the day to day operations of the business in accordance with the delegated authority of the Board;
(ii) be actively involved in forecasting, establishing objectives and developing strategies, plans and budgets to reach those objectives, including establishing policies and procedures in support of these;
(iii) implement decisions and policies within specific areas of responsibility;
(iv) act in accordance with the law and with policies, systems and procedures set down by the Board;
(v) keep the Board informed with details of the performance of the business against the Board’s strategies and targets;
(vi) ensure compliance with the requirements of laws, regulations, industry codes, contractual obligations and organisational policies and standards;
(vii) implement and maintain a sound risk management framework within the business;
(viii) incorporate monitoring and review mechanisms at the operational and project levels within the business;
(ix) keep themselves informed and educated, in detail, in relation to the business of the Corporation;
(x) clearly understand, support and act in accordance with the vision/mission, goals, values and ethics of the business;
(xi) have a clear understanding of the objectives and KPI’s of the business;
(xii) ensure measures and systems are in place that alert the Board to changes in business conditions and performance in a timely manner to enable effective response(s);
(xiii) have a commitment towards achieving/improving commercial and environmental performance levels of the business, whilst exercising sound business judgment; and
(xiv) with the Board, have regard to the need for succession planning within the business.