> BKI Value Statement

> Share Trading Policy

> Diversity Policy

> Audit and Risk Committee Charter

> Nominations Committee Charter

> Remuneration Committee Charter

> Board Charter

> Executive Remuneration Policy

> Director Remuneration Policy

> Policy and Procedure for Selection and Appointment of Directors

> Code of Conduct

> Report on Diversity

> Continuous Disclosure & Shareholder Communication Policy

> Corporate Governance Statement

> Whistleblower Policy

> Anti-Bribery & Corruption Policy

> Risk Management Policy

> Contact BKI IMA

 


BKI INVESTMENT COMPANY LIMITED (BKI) COMPANY VALUES

July 2021

BKI’s core values comprise:

Alignment – As custodians of shareholders funds, we should demonstrate alignment by maintaining long term co-investment with our shareholders
Wealth preservation – Our actions should enable the long term preservation and generation of shareholder wealth
Accessibility & Affordability – We provide our active portfolio management services for a competitive low cost to make wealth preservation & generation more accessible
Continual Improvement – We are committed to continually improving our knowledge and sharing it with shareholders

 

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Share Trading Policy

July 2021

Overview

The BKI Share Trading Policy (Policy) has been developed to:
• to ensure that BKI’s Restricted Persons are aware of the restrictions on dealing in BKI securities; and
• minimise the potential for misunderstandings or suspicions that Restricted Persons are dealing in BKI securities while in possession of unpublished price-sensitive information.

Applicability

The BKI Share Trading Policy regulates dealings:
• by Directors, Officers and Employees of BKI Investment Company Limited (BKI) and its Investment Manager, Contact Asset Management Pty Limited and their associates (together, Restricted Persons);
• in shares, options and other securities issued by BKI (BKI securities).

Restrictions on Trading

• Restricted Persons are prohibited from dealing in BKI securities:
– while in possession of unpublished BKI price-sensitive information; and/or
– during Prohibited Periods.
• Restricted Persons are prohibited from engaging in short term dealing in BKI securities;

Price-sensitive information
BKI price-sensitive information is information that a reasonable person would expect to have a material effect on the price or value of BKI securities.

Dealing
For the purposes of the Policy, dealing is taking to encompass:
1. Directly buying, selling, or otherwise trading in BKI securities;
2. procuring another person to buy, sell, or otherwise trade in BKI securities ; and
3. communicating the price-sensitive information to any other person if the Restricted Person knows or ought to know that the other person will use the information, directly or indirectly, to buy, sell, or otherwise trade in BKI securities.

Anyone who contravenes the prohibitions against insider trading is guilty of an offence under the Corporations Act and their employment or service agreement with BKI or Contact Asset Management Pty Limited (as applicable) will be immediately terminated. This is regardless of whether the other terms of the Policy have been complied with.

Prohibited Periods

Prohibited periods include Closed Periods and Blackout Periods.

Closed Periods
Restricted Persons are prohibited from dealing in Closed Periods due to the proximity of these periods to the release of the Company’s half year and full year results and, typically, the announcement of any dividends declared. Closed periods are:
• from 12:01am 1 January to 12:01am on the day after the release of the Company’s Appendix 4D and half year results to the Australian Securities Exchange (ASX); and
• from 12:01am 1 July to 12:01am on the day after the release of the Company’s Appendix 4E and full year results to the Australian Securities Exchange (ASX).
It is noted that the Company currently releases to the ASX on a weekly basis an unaudited, pre-tax NTA per BKI share, which ensures the market remains regularly informed of this information. The Board has determined that there is no requirement for a formal Closed Period during the preparation of these weekly NTAs. Any price-sensitive information that arises during that process is covered by the broader ASX Continuous Disclosure provisions and the insider trading provisions of the Corporations Act.

Blackout Periods
The Board of BKI has the discretion to impose Blackout Periods at any point in time for any reason. Blackout Periods are to be established by a resolution of the Board.

Allowable Dealings

Restricted Persons are allowed to deal in BKI securities outside of Prohibited Periods within the following guidelines:
• never engage in short term dealing of the Company’s securities;
• notify the Company Secretary or Chairman of any intended dealings prior to entering into the transaction;
• notify the Company Secretary of completed dealings.
– Where the dealing in securities would result in the Company needing to make a disclosure to the Australian Securities Exchange or Australian Securities and Investments Commission, such information must be provided within sufficient time for the Company to meet its reporting obligations.

Excluded Trading

The restrictions on trading in BKI securities by Restricted Persons do not apply in the following situations of passive dealing:
a. the transfer of securities already held by the Restricted Person into a superannuation fund or similar scheme where the Restricted Person is a beneficiary;
b. An investment in, or trading in units of, a fund or other scheme (other than a scheme only investing in BKI securities) where the assets of the fund or other scheme are invested at the discretion of a third party;
c. Where a Restricted Person is a trustee, trading in BKI securities by that trust provided the Restricted Person is not a beneficiary of the trust and any decision to trade during a Prohibited Period is taken by the other trustees or by the investment managers independently of the Restricted Person
d. the acceptance of a takeover offer;
e. dealing under an offer or invitation made to all or most of the Company’s security holders, such as a rights issue, a security purchase plan, a dividend or distribution reinvestment plan and an equal access buy-back, where the plan that determines the timing and structure of the offer has been approved by the Board. This includes decisions relating to whether or not to take up the entitlements and the sale of entitlements required to provide for the take up of the balance of entitlements under a renounceable pro rata issue;
f. accepting an offer to participate in an employee securities plan; and
g. any such similar transaction determined by the Directors to be a passive dealing.

Exceptional Circumstances

In Exceptional Circumstances, Restricted Persons are able to deal in BKI Securities only after complying with the following process:
• submission of a written request to the Chair of the BKI Board (Chair), including the nature of the intended form of dealing and sufficient detail of the circumstances
• The submission also needs to state that the Restricted Person is not in possession of inside information.
• The Chair must approve the submission in writing (email being acceptable)
• In circumstances where the Chair is applying to deal in exceptional circumstances, approval must be sought from and provided by the Chair of the BKI Audit and Risk Committee.
Exceptional Circumstances include severe financial hardship where the Restricted Person has a compulsion to deal with securities by Court Order, or any other circumstances deemed exceptional by the BKI Chair or Chair of the BKI Audit & Risk Committee.

 

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DIVERSITY POLICY

Purpose:

This policy has been prepared to formalise the Company’s commitment to maintaining an inclusive culture that provides equal access to opportunities to all current and prospective employees and directors.

Diversity:

Diversity encompasses all characteristics that make individuals different from one another. It includes, but is not limited to race, religion, ethnicity, gender, sexual orientation, disability, age and cultural background. At BKI, we believe that a commitment to equality and treating all individuals with respect are the cornerstones of achieving diversity.

Policy:

BKI understands that each employee brings unique skills and capabilities to their work, driven by the diverse blend of experiences and social and cultural background that has shaped them. We recognise that the success of our business is a reflection of the skills and quality of our people, both employees and at Board level. Getting an appropriate mix of skills, experience and perspective will better enable BKI to maximise returns to the Company’s shareholders, and optimise the experience of all other stakeholders when interacting with BKI.

The Company is therefore committed to creating a workplace environment and culture that:

– Is free of discrimination
– Is conducive to attracting and retaining people from a broad experience base
– Rewards performance
– Provides opportunities that allow individuals to reach their full potential irrespective of background or difference.
– Is understanding of each individual’s personal circumstances

When appointing individuals to the organisation, the most suitably qualified candidates will be selected.

When promoting individuals within the organisation, the most suitably qualified candidates will be selected.

Gender Diversity – Objectives, Measurement and Disclosure:

The Board will establish measurable objectives for addressing gender diversity that are consistent with ensuring the long term success of the Company and wellbeing of its employees and other stakeholders.

Measurement of progress in achieving the objectives will be carried out on a regular basis (at least annually, where outstanding objectives exist) by the Remuneration and Nomination Committees, who will report their findings to the Board and make recommendations as appropriate.

The Board will annually assess the objectives as to whether they remain appropriate and adequate for the Company, and also annually assess the progress made toward achieving them. BKI will comply with its reporting obligations under the ASX Listing Rules and other legislation as appropriate from time to time.

 

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AUDIT AND RISK COMMITTEE CHARTER

1. Purpose

2. Powers of the Audit & Risk Committee

3. Function of Respective Parties

4. Duties of the Audit & Risk Committee

5. Eligibility

6. Meetings

1. Purpose

1.1 The Audit & Risk Committee is established by the Board of Directors. The purpose of the Audit & Risk Committee is to assist the Board of Directors in its review of:

(a) BKI’s financial reporting principles and policies, controls and procedures;

(b) the integrity of BKI’s financial statements and the independent audit thereof, and the Company’s compliance with legal and regulatory requirements in relation thereto; and

(c) and due diligence and prudential supervision procedures required by regulatory bodies.

1.2 The Audit & Risk Committee will report to the Board on each of the matters referred to in clause 1.1

1.3 The Audit & Risk Committee is also responsible for:

(a) the appointment, evaluation and oversight of the external auditor;

(b) compensation of external auditor; and

(c) where deemed appropriate, replacement of the external auditor.

2. Powers of the Audit & Risk Committee

2.1 The Committee is required to make recommendations to the Board and does not have any executive powers to commit the Board or management to the implementation of these recommendations, other than:

(a) where the Board has delegated authority to the Audit & Risk Committee; and

(b) for matters relating to the appointment, compensation, oversight and replacement of the external auditor.

2.2 The Committee has unrestricted access to executives of BKI, representatives of the Investment Manager and to the external auditors in order to fulfil its purpose and undertake its duties.

2.3. The Committee has the ability to direct any special investigations deemed necessary and to consult independent experts where considered necessary to carry out its duties. Costs of such consultations are borne by BKI.

3. Function of Respective Parties

3.1 Other than in relation to the work of the external auditor, the function of the Audit & Risk Committee is oversight. It is recognised that members of the Audit & Risk Committee are not full time employees of BKI.

3.2 Each member of the Audit & Risk Committee is entitled to rely on executives of BKI and the Investment Manager on matters within their responsibility, and on external professionals on matters within their areas of expertise, and may assume the accuracy of information provided by such persons, so long as he or she is not aware of any reasonable grounds upon which such reliance or assumption may be inappropriate.

3.3 The Board may rely upon information provided by the Committee and its members, in relation to matters within the Committee’s responsibility under the terms of this charter, provided that is has evaluated all the information and is not aware of any reasonable basis upon which to question its accuracy.

3.4 Management of BKI is responsible for the preparation, presentation and integrity of the Group’s financial statements. Management is responsible for implementing and maintaining appropriate accounting and financial reporting principles and policies and procedures on internal controls designed to assure compliance with accounting standards, applicable laws and other regulations.

3.5 The external auditors are responsible for planning and carrying out each audit and review, in accordance with applicable auditing standards. The external auditors are accountable to shareholders through the Audit & Risk Committee.

4. Duties of the Audit & Risk Committee

4.1 The following duties are structured in accordance with the Committee’s purposes:

(a) With respect to the external auditors:

(i) select, evaluate and replace as necessary the external auditor;

(ii) review and agree the annual audit engagement letter;

(iii) approve the fees charged for audit and review services;

(iv) determine categories of non-audit services that may be provided by the external auditor;

(v) provide approval of all non-audit services that are to be undertaken by the external auditor;

(vii) review and provide oversight of audit reports prepared and issued by the external auditors on Group financial statements and activities;

(viii) consider and review reports prepared by the external auditor on critical accounting policies, all alternative treatments of financial information permitted under Australian Equivalents to International Financial Reporting Standards, and all other written communication between the external auditor and management;

(ix) resolve any disagreements between the external auditor and management regarding BKI’s financial reporting;

(x) discuss with the external auditors any relationship that may impact their objectivity and independence;

(xi) ensure that the external auditors prepare and deliver an annual statement as to their independence which includes details of all relationships with BKI;

(xii) annually review the effectiveness of the external auditor; and

(xiii) and ensure the external audit engagement partner and review partner be rotated every five years.

(b) With respect to financial reporting:

(i) receive from management and the external auditors a timely analysis of significant financial reporting issues and practices and review such analyses;

(ii) review the full-year and half-year audited financial statements, earnings press releases, other financial information being made public, any significant matters arising from the audit, management judgements and accounting estimates, and significant changes to BKI’s auditing and accounting principles, policies, controls, procedures and practices with management and external auditors;

(iii) discuss the critical accounting policies with external auditors and management;

(iv) review the certification provided by the Chief Executive Officer and the Chief Financial Officer (or equivalents) on annual and half yearly reports and review the processes that were used to reach the opinion provided in the certification;

(v) ensure the financial statements include disclosure covering governance issues in accordance with the requirements of regulators; and

(vi) review the form of opinion that the external auditors propose to render.

(e) With respect to due diligence procedures:

(i) discuss any reports prepared in relation to issues of shares, debt securities, or other instruments requiring the issue of a prospectus, where the prospectus is issued by the BKI Group;

(ii) discuss reports on the BKI Group prepared for prudential supervisors or other regulators; and

(iii) consider any reports prepared by external auditors in relation to the above due diligence procedures.

(f) With respect to corporate governance:
(i) develop and promulgate rules on the employment by BKI of members of the external audit firm; and
(ii) ensure that BKI has received an executed Code of Conduct from the Chief Executive Officer and the Chief Financial Officer (or equivalents) and the Investment Manager.

(g) With respect to reporting:

(i) review the Audit & Risk Committee Charter annually, and recommend any changes to the Board of Directors;

(ii) provide a self-assessment of the effectiveness of the Audit & Risk Committee at least annually;

(iii) ensure the Audit & Risk Committee Charter is available on the BKI web site, and that all shareholders are informed at least annually of the location of the Audit & Risk Committee Charter; and

(iv) report to the Board on the activities of the Audit & Risk Committee.

(h) With respect to internal controls:

(i) review the effectiveness and efficiency of operations;

(ii) assess the reliability of financial reporting;

(iii) ensure compliance with applicable laws and regulations; and

(iv) review in a general manner the Company’s policies with respect to risk assessment and risk management.

5. Eligibility

5.1 The Audit & Risk Committee shall appoint one of its members, other than the Chairman of the Board, to serve as its chairman.

5.2 The majority of the Audit & Risk Committee members must be independent non-executive directors.

5.3 The independence criteria set out in the Board Charter will apply to determining eligibility of Audit & Risk Committee members.

5.4 Each member of the Audit & Risk Committee must be appropriately financially literate (as such qualification is interpreted by the Board in its business judgement) and have a strong understanding of the industry in which the Company operates.

5.5 The Chairman of the Audit & Risk Committee will be a ‘financial expert’. A financial expert is a person who, as a result of education and experience as a public accountant or auditor or as the principal financial officer, controller or principal accounting officer of a Company, has an understanding of financial statements, and Australian Equivalents to International Financial Reporting Standards, and experience in preparing or auditing financial statements of companies comparable to BKI, in the application of GAAP to accounting for estimated, accruals and reserves, in internal accounting controls and in the functioning of audit committees.

6. Meetings

6.1 The Audit & Risk Committee will meet at least two times annually, and more frequently if it deems necessary.

6.2 Representatives of management and of the external auditors may be invited to attend part or all of any meeting of the Audit & Risk Committee. The Committee may request certain parties to withdraw from any part of the meeting, and may request any officer or employee of the Company, the Investment Manager or the external auditors to attend a meeting.

6.3 The Audit & Risk Committee will meet at least once annually with the external auditors, in the absence of management. The Audit & Risk Committee will request the external auditor to advise it whether any officer of BKI or the Investment Manager has taken any action to improperly influence, coerce, manipulate or mislead any member of the external audit team for the purpose of rendering the financial statements materially misleading.

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NOMINATIONS COMMITTEE CHARTER

Contents

1. Purpose
2. Powers of the Nominations Committee
3. Duties of the Nominations Committee
4. Meetings
5. Delegation to Subcommittee
6. Board Composition

1. Purpose

The Nominations Committee is established by the Board of Directors. The purpose of the Nominations Committee is to:

(a) assess the membership of the Board having regard to present and future needs of the Company

(b) assess the independence of directors to ensure the majority of the Board are independent directors

(c) propose candidates for Board vacancies in consideration of qualifications, experience and domicile

(d) oversee Board succession

(d) evaluating Board performance

2. Powers of the Nomination Committee

The Nominations Committee has the ability to direct any special investigation deemed necessary and to consult independent experts where considered necessary to carry out its duties. Costs of such consultations are borne by BKI.

3. Duties of the Nominations Committee

The following duties are structured in accordance with the Nominations Committee’s purposes:

(a) To make recommendations to the Board from time to time as to changes that the Committee believes to be desirable to the size of the Board.

(b) To identify individuals believed to be qualified to become Board members and to recommend such candidates to the Board. In nominating candidates, the Committee shall take into consideration such factors as it deems appropriate. These factors may include judgement, skill, diversity, experience with business and other organisations of comparable size, the interplay of the candidate’s experience with the experience of other Board members, and the extent to which the candidate would be a desirable addition to the Board and any committees of the Board.

(c) To identify Board members qualified to fill vacancies on any committee of the Board (including the Committee) and to recommend that the Board appoint the identified member or members to the respective committee. In nominating a candidate for committee membership, the Committee shall take into consideration the factors set forth in the charter of the committee, if any, as well as any other factors it deems appropriate, including without limitation the consistency of the candidate’s experience with the goals of the committee and the interplay of the candidate’s experience with the experience of other committee members.

(d) Establish procedures for the Committee to exercise oversight of the evaluation of the Board and management.

(e) Recommend to the Chairman of the Board the appropriate process for evaluation of the performance of each director.

(f) Any other duties or responsibilities expressly delegated to the Committee by the Board from time to time relating to the nomination of Board and committee members.

(g) Oversee Board succession.

4. Meetings

The Nominations Committee will meet at least once annually, and more frequently if it deems necessary.

5. Delegation to Subcommittee

The Nominations Committee, in its discretion, delegate all or a portion of its duties and responsibilities to a subcommittee of the Committee.

6. Guidance to Board Composition

6.1 The majority of the Board must be independent directors

6.2 BKI is to maintain a mix of directors on the Board from different backgrounds with complementary skills and experience

6.3 The Nominations Committee must seek to ensure:

(a) membership represents an appropriate balance between directors with experience and knowledge of BKI and directors with an external perspective; and

(b) the size of the Board is conducive to effective discussions and efficient decision making.

 

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REMUNERATION COMMITTEE CHARTER

Contents

1. Purpose

2. Powers of the Remuneration Committee

3. Duties of the Remuneration Committee

4. Meetings

5. Delegation to Subcommittee

 

1. Purpose

1.1 The Remuneration Committee is established by the Board of Directors. The purpose of the Remuneration Committee is to:

(a) review and recommend to the board for approval policies for remuneration programs appropriate for BKI;

(b) review and make recommendations to the Board in respect of the administration of BKI’s remuneration programs;

(c) review and make recommendations to the Board in respect of the remuneration of senior executive officers and non-executive directors; and

(d) prepare for approval by the Board any report on executive remuneration that may be:

(i) required by any listing rule, legislation, regulatory body, or other regulatory requirement; or

(ii) proposed for inclusion in BKI’s annual report,

and to report regularly to the Board on each of the above matters.

 

2. Powers of the Remuneration Committee

2.1 The Remuneration Committee has the ability to direct any special investigations deemed necessary and to consult independent experts where considered necessary to carry out its duties. Costs of such consultations are borne by BKI.

 

3. Duties of the Remuneration Committee

3.1 The following duties are structured in accordance with the Remuneration Committee’s purposes:

(a) In consultation with senior management, review and recommend to the Board for approval BKI’s general approach to remuneration, and oversee the development and implementation of remuneration programs.

(b) Review and recommend to the Board for approval corporate goals and objectives relevant to the remuneration of the Chief Executive Officer and all other Executive management;

(c) evaluate the performance of each Executive in light of those goals and objectives;

(d) recommend to the Board the remuneration level for each Executive based on this evaluation. In determining the long-term incentive component of Executive remuneration, the Remuneration Committee shall consider, among other factors, BKI’s performance and relative shareholder return, the value of similar incentive awards to Executives at comparable companies, the awards given to each Executive in past years, and any other factors that the committee determines is appropriate.

(e) recommend to the Board other terms of employment for each Executive offficer.

(f) Approve any statement on BKI’s remuneration policy and executive remuneration disclosures that may be:

(i) required by any listing rule, legislation, regulatory body, or other regulatory requirement; or

(ii) proposed for inclusion in BKI’s annual report.

(g) Review the remuneration of non-executive directors annually.

(h) Review any transaction between the organisation and the directors, or any interest associated with the directors, to ensure the structure and terms of transaction are in compliance with the Corporations Act 2001 and are appropriately disclosed.

4. Meetings

4.1 The Remuneration Committee will meet at least once annually, and more frequently if it deems necessary.

4.2 Representatives of management may be invited to attend part or all of any meeting of the Remuneration Committee. The Remuneration Committee may request certain parties to withdraw form any part of the meeting. No employee, including the Chief Executive Officer, should attend any meeting where their performance or remuneration are discussed, unless specifically invited by the Remuneration Committee.

5. Delegation to Subcommittee

5.1 The Remuneration Committee may, in its discretion, delegate any of its duties and responsibilities to a subcommittee of the Committee.

 

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BOARD CHARTER

Contents
1. Introduction
2. Purpose and Role
3. Powers
4. Specific Responsibilities
5. Board Membership
6. Independence
7. Meetings
8. Board Committees
9. Self Assessment
10. Procedures for Handling a Conflict of Interest

1. Introduction

1.1 In carrying out its responsibilities and powers as set out in this Charter, the Board will at all times recognise its overriding responsibility to act honestly, fairly, diligently and in accordance with the law in serving the interests of BKI’s shareholders, as well as its employees, clients, and the community. It will work to promote and maintain an environment within BKI that establishes these principles as basic guidelines for all of its employees and representatives at all times.

2. Purpose and Role

2.1 The Board is responsible for:

(a) charting the direction, strategies and financial objectives for BKI and monitoring the implementation of those policies, strategies and financial objectives;

(b) monitoring compliance with regulatory requirements and ethical standards; and

(c) appointing and reviewing the performance of the Chief Executive Officer.

(d) appointing and administering the contractual performance of the Investment Manager.

2.2 In performing the responsibilities set out above the Board should act at all times:

(a) in a manner designed to create and continue to build sustainable value for shareholders; and

(b) in accordance with the duties and obligations imposed upon them by the Constitution and by law.

3. Powers

3.1 In addition to matters expressly required by law to be approved by the Board, powers specifically reserved for the Board are as follows:

(a) appointment of a Chief Executive Officer and determination of his or her terms and conditions (including remuneration);

(b) appointment of an Investment Manager, and determination of the terms and conditions of the Investment Management Agreement governing the appointment, including remuneration;

(c) approval of any matters in excess of discretions that it may have delegated to a Chief Executive Officer, Investment Manager and/or other Company executives in relation to credit transactions, market risk limits and expenditure; and

(d) Approvals of each of the following:

(i) the strategic plan, at least annually;

(ii) the budget, at least annually;

(iii) the remuneration and conditions of service including financial incentives for any executive directors and the Company Secretary, at least annually;

(iv) significant changes to organisational structure and the appointment of such senior officers or external advisors and managers as the Board may determine;

(v) the acquisition, establishment, disposal or cessation of any significant business of BKI;

(vi) the issue of any shares, options, equity instruments or other securities in BKI;

(vii) any public statements which reflect significant issues of BKI policy or strategy; and

(viii) any changes to the discretions delegated from the Board.

 

4. Specific Responsibilities

4.1 The Board has a specific responsibility for:

(a) contributing to the development of and approving the corporate strategy

(b) reviewing and approving business results, business plans, the annual budget and financial plans

(c) authorising and monitoring major investment and strategic commitments

(d) ensuring the maintenance of credit quality

(e) ensuring regulatory compliance

(f) reviewing internal controls

(g) monitoring and influencing the culture, reputation and ethical standards of the Company

(h) ensuring adequate risk management processes

(i) monitoring the Board composition, director selection and Board processes and performance

(j) overseeing and monitoring:

  • Organisational performance and the achievement of the Company’s strategic goals and objectives
  • Compliance with the Company’s code of conduct
  • Progress of significant corporate projects

(k) monitoring financial performance including approval of the annual report and half-year financial reports

(l) contributing to the performance assessment for the members of the senior executive team including the Chief Executive Officer and other senior management

(m) appointing, managing and assessing the performance of any Investment Manager

(n) ensuring there are effective management processes in place and approving major corporate initiatives

(o) enhancing and protecting the reputation of the Company

(p) reporting to shareholders

4.2 Responsibilities specifically delegated to Company Executives and/or the Investment Manager include:

(a) organisation and monitoring of the investment portfolio

(b) managing organisational performance and the achievement of the Group’s strategic goals and objectives

(c) management of financial performance

(d) management of internal controls

(e) appointment, management and assessing the performance assessment of other staff

5. Board Membership

5.1 The Board should comprise a majority of non-executive directors who satisfy the criteria for independence as stated in Section 6 below.
5.2 The directors shall appoint a chairperson of the Board.

6. Independence

6.1 In accordance with Corporate Governance Principles and Recommendations (4th Edition) released by the Australian Stock Exchange Corporate Governance Council, the examples of interests, positions, associations, and relationships that might cause doubts about the independence of a director include if the director:

(a) is, or has been, employed in an executive capacity by the entity or any of its child entities and there has not been a period of at least three years between ceasing such employment and serving on the Board;(b) receives performance-based remuneration (including options or performance rights) from, or participates in an employee incentive scheme of, the entity;

(c) is, or has been within the last three years, in a material business relationship (eg as a supplier, professional advisor, consultant or customer) with the entity or any of its child entities, or is an officer of, or otherwise associated with, someone with such a relationship;

(d) is, represents, or is or has been within the last three years an officer or employee of or professional advisor to, a substantial security holder of the entity. [In accordance with Section 9 of the Corporations Act, a substantial shareholder holds greater than 5% of BKI’s issued capital];

(e) Has close personal ties with any person who falls within any of the categories described above; or

(f) has been a director of the entity for such a period that their independence from management and substantial holders may have been compromised.

6.2 In each case, the materiality of interest, position, association or relationship needs to be assessed to determine whether it might interfere, or might reasonably be seen to interfere, with the director’s capacity to bring an independent judgement to bear on issues before the board and to act in the best interest of the entity and its security holders generally.

6.3 Materiality for these purposes is determined on both quantitative and qualitative bases. An amount of over 5% of annual turnover of the Company is considered material. In addition, a transaction of any amount or a relationship is deemed material if knowledge of it impacts the shareholders’ understanding of the director’s performance.

7. Meetings

7.1 Board and Committee papers should where possible be provided to directors at least four days prior to the relevant meeting.

7.2 The non-executive directors should meet at least once each year for private discussion of management issues.

7.3 The Board should meet formally at least 6 times per year. In additional the Board will meet whenever necessary to deal with specific matters needing attention between the scheduled meetings.

8. Board Committees

8.1 The Board may from time to time establish Committees to assist it in carrying out its responsibilities, and shall adopt Charters setting out matters relevant to the composition, responsibilities and administration of such committees, and other matters that the Board may consider appropriate.

8.2 The Board shall as a minimum establish the following Committees (with discretion as to whether some committees are joint committees), and shall adopt Charters setting out all matters relevant to the composition, responsibilities and administration of those Committees:

(a) Audit & Risk Committee;

(b) Investment Committee;

(c) Remuneration Committee; and

(d) Nomination Committee.

9. Self Assessment

9.1 The Board and committees shall each undertake an annual performance evaluation of themselves that:

(a) compares the performance of the Board/committee with the requirements of it’s Charter;

(b) sets forth the goals and objectives of the Board/committee for the upcoming year; and

(c) effects any improvements to the Board or committee charter deemed necessary or desirable.

9.2 The performance evaluation shall be conducted in such manner as the Board/committee deems appropriate.

9.3 The Chair of the Company must annually assess the performance of each director and meet privately with each director to discuss this assessment.

9.4 The Chair’s performance is to be reviewed by the Board annually.

10. Procedures for Handling a Conflict of Interest

10.1 A Director who has:

(a) a material personal interest in a matter which relates to the affairs of the company; or

(b) any other interest which the Director believes is appropriate to disclose in order to avoid an actual conflict of interest or the perception of a conflict of interest,

may not be present at a meeting when the matter is being considered, and may not vote on the matter.

The minutes of the meeting should record the decision taken by the Directors who do not have an interest in the matter.

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DIRECTOR REMUNERATION POLICY

TABLE OF CONTENTS
1. Introduction and purpose
2. Policy
3. Procedure
4. Compensation structure
5. Exclusions

 

1. Introduction and purpose

The adopted BKI Investment Company Pty Limited (“BKI”) Remuneration Committee Charter continues unchanged. This document outlines the policy and procedure the Company will follow in the determination of remuneration for its non-executive directors including director fees; committee chair fees; committee membership fees, and special exertion fees to be paid for services provided to the Company over and above their duties as non-executive directors (“special exertion fees”).

 

2. Policy

As a publicly listed Company, the Board of BKI has an ongoing requirement to recruit and retain a suitable number of adequately qualified and experienced non-executive directors to deliver the commercial expectations of its shareholders, to achieve the governance and oversight required of it and to do so at reasonable cost.

The Remuneration Committee is responsible for recommending to the Board the appropriate remuneration for directors.

The Company’s policy is to pay its directors at or below the median market rate of fees paid by similar sized companies, in similar or related industries to itself, cognisant of the frequency and duration of meetings also being comparable.

The Company adopts a similar policy with respect to Chair fees, committee membership fees and special exertion fees.
The Company does not pay performance related incentives to its non- executive directors.

 

3. Procedure

On an annual basis the Remuneration Committee will establish the current market ranges for non-executive director remuneration and any changes in current best practice. To assist it in this process the Committee may procure commercially available data, appoint and retain expert advisers, or utilise information in the business press and/or the knowledge of its members.

Non-executive directors’ fees will be benchmarked whenever it is deemed appropriate.

At least once a year the Remuneration Committee will recommend to the Board whether any change in the quantum or the packaging of remuneration is needed to meet the Company’s policy objectives.

Whenever there is a recommended change in the overall quantum of remuneration paid to the non-executive director group as a whole, the Remuneration Committee will also confirm to the Board that the remuneration intended to be paid to non-executive directors falls within the fee cap approved by shareholders. Whenever necessary, the Remuneration Committee will recommend to the Board the extent to which the cap should be increased at a subsequent meeting of shareholders to facilitate the Company’s policy objectives in the medium term.

 

4. Compensation structure

The Company favours a fixed cash fee basis for the payment of non- executive directors. Those members who serve as Chairs of Committees may receive an additional fee if determined by the Remuneration Committee.

The Company will not offer to non-executive directors any of the following:

performance related incentive payments, or

performance related incentive plan participation, or

retirement benefits other than statutory superannuation payments

 

5. Exclusions

This policy does not cover the determination of remuneration for executive directors. Remuneration for executive directors is covered by a separate policy “BKI Executive Remuneration Policy”.

 

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POLICY AND PROCEDURE FOR SELECTION AND APPOINTMENT OF DIRECTORS

TABLE OF CONTENTS

1.0 INTRODUCTION AND PURPOSE
2.0 POLICY
3.0 PROCEDURE
3.1 Regular review of Board composition
3.2 Requirements of potential directors
3.3 Selecting a candidate
3.4 Appointment of director
3.5 Requirements after director is appointed
3.6 Letter of appointment
4.0 Board skills matrix
1.0 INTRODUCTION AND PURPOSE

This document outlines the policy and procedure BKI Investment Company Limited
(“BKI”, “the Company”) will follow in appointing a new director.
The Board should have sufficient Directors to discharge its obligations but no more than 10. The majority of the Board should be independent, or be able to bring independent judgement to bear in the execution of their duties.

2.0 POLICY

To ensure the Board of BKI consists of members with the range of skills and qualities to meet its primary responsibility for promoting the success of BKI and its subsidiaries (“the Group”) in a way that ensures the interests of shareholders and stakeholders are promoted and protected.

Retiring directors are not automatically re-appointed. Directors are appointed for a period of no more than three years and are subject to the selection and appointment procedures outlined below.

Board renewal is assured through a policy of regular Board skills matrix review (3.1.1. and 4.0) and special requirements for nomination after a director has served 9 years and/or three terms of office.

The Nomination Committee is responsible for recommending to the Board the appointment or re-appointment of all directors.

3.0 PROCEDURE

Directors should ensure the Company is properly managed to protect and enhance shareholder value, to meet the Company’s obligations to all stakeholders including shareholders, and to comply with all the Company’s legal obligations including compliance with the Corporations Act and ASX Listing Rules. In carrying out this duty, the Board should always be mindful of the need for establishing a Board that enhances the efficient and effective running of the Group. The following procedure is to be followed in selecting and appointing a new director to the Board of BKI:

3.1 Regular review of Board composition

The Nomination Committee will regularly (at least annually) review the size and composition of the Board. This review should consider:

3.1.1 The Board’s current skills and qualities compared to the desired skills matrix outlined in Section 4; and

3.1.2 The needs of the Company for the current business structure as well as considering the future; and

3.1.3 The balance of independence.

3.2 Requirements of potential directors

Potential Board candidates should:

3.2.1 Complement the current board composition – i.e. is there an appropriate mix of directors with financial expertise and relevant industry experience?

3.2.2 Have the required skills, knowledge and expertise to add value to the Board.

3.2.3 Provide the Board with further competencies and be able to provide independent and objective advice.

3.2.4 Have no material conflicts of interest with the Company.

3.2.5 Have a reputable standing in the business community.

3.2.6 Be able to commit the necessary time to their position. In general, the maximum number of directorships or equivalent positions for an individual should not exceed five, unless the director can clearly demonstrate that they have the time to commit to additional appointments. Each non-executive director should specifically acknowledge to the Company prior to appointment or being submitted for election that they will have sufficient time to meet what is expected of them.

3.3 Selecting a candidate

3.3.1 The Nomination Committee will generate a list of potential candidates. This list can be developed using the Nomination Committee members’ networks or by using the services of an independent executive search firm.

3.3.2 The Nomination Committee will review the list of candidates to ensure they meet the requirements of the selection criteria and reflect the Board policy with respect to diversity. If no clear candidate stands out then a short list will be prepared and Nomination Committee members will interview each short-listed candidate. The Nomination Committee will then recommend to the Board the preferred candidate to become a director of the Company.

3.3.3 Where there is a choice to be made between candidates, the Board has a responsibility to shareholders to enable a fair and professional comparative assessment of the candidates’ skills and experience in light of identified Board needs and to advise shareholders about the outcome of that assessment, with the objective that the election will result in the Board having the best mix of available skills to deal with the circumstances facing the Company. As such, the Board will, in a Notice of Meeting, recommend to shareholders eligible to vote any candidate/s it considers will best fit the current identified needs of the Board. If there are “open” proxy votes, the chairperson of the meeting will exercise those votes in favour of the Board’s recommended candidate/s.

3.3.4 Once the Board has agreed on the preferred candidate to become a director, that person should be approached by the Chairman of the Company and/or the Chairman of the Nomination Committee, as most appropriate in the particular circumstance, to provide a signed consent to act as a director of the Company.

3.4 Appointment of director

3.4.1 The appointment of directors is to include the determination of the terms, conditions, responsibilities and expectations of the position such that any potential candidate can fit the criteria which satisfy the objective of the appointment.

3.4.2 Non-executive directors should be appointed subject to the Company’s constitution, ASX Listing Rules and Corporations Act provisions.

3.4.3 The ultimate decision about who is elected to the Board is to be made by the shareholders.

3.4.4 Candidates’ qualifications, professional experience and assertions will be verified prior to appointment, including but not limited to:

• Professional qualifications directly with the issuing institutions

• All current board, executive and other relevant positions and assertions directly with the chair and/or most senior manager as appropriate

• Professional assertions with referees, including at least one director/manager to whom the candidate reported. Referee profiles and contact details are retained.

• Criminal record and bankruptcy history

3.4.5 The Board must provide shareholders with all material information