Ergon Energy Board Charter
This charter was approved by the board of Ergon Energy Corporation Limited (EECL)
on 29 July 2005 and reviewed in March 2006, March 2007, April 2009 and April 2010
In this document, unless the contrary is stated, a reference to the Board covers the
board of EECL and, separately, the board of EECL subsidiaries in the Ergon Energy
Group. The Board has also adopted a Board Handbook which expands on some of
the issues covered by this charter and covers further issues including Board
operations and processes.
The powers and duties of directors are set out in the Constitution and at law –
including, under the Corporations Act 2001 and the Government Owned
Corporations Act 1993 (GOC Act).
1. Role of the Board
The company constitution of EECL states that the roles, responsibilities and
duties of the directors include those required of them under the GOC Act.
The role of the Board includes the following under the GOC Act:
(a) responsibility for the GOC’s commercial policy and management;
(b) ensuring that, as far as possible, the GOC achieves, and acts in
accordance with, its statement of corporate intent and carries out the
objectives outlined in its statement of corporate intent;
(c) accounting to the GOC’s shareholders for its performance as required by
this Act and other laws applying to the GOC;
(d) ensuring that the GOC otherwise performs its functions in a proper,
effective and efficient way.
The Board is subject to the corporate governance standards set by the Corporations
Act 2001. The Board also follows the ASX Corporate Governance Principles and
Recommendations (2nd Edition) to the extent they are reasonably applicable to Ergon
Energy’s circumstances and the Corporate Governance Guidelines for Government
Owned Corporations issued by Queensland Treasury.
The Board is committed to conducting all business activities, legally, ethically and in
accordance with the highest standards of integrity and propriety.
2. Responsibilities of, and matters reserved to, the Board
Whilst the Board retains accountability to the shareholding Ministers, it has delegated
aspects of the management of the business to the Chief Executive (the Chief
Executive may in-turn delegate matters to other senior managers).
The Board has set out the functions that are reserved to itself, and matters not
specifically reserved to the Board are delegated to the Chief Executive.
The matters reserved to the board are set out in detail in the Board Handbook and
company policy. Broadly, the Board retains responsibility for the following:
Approved 30 April 2010
• Appointment of the Chief Executive, Company Secretary and membership of
• Senior management framework, including for example delegations,
remuneration and incentive policies, performance assessment and
• Relations with shareholding Ministers
• Certain financial matters, including for example accounting policies and
approvals outside the Chief Executive’s delegation
• Business strategy, including for example setting strategic objectives and
• Approval of certain key policies.
3. Board committees
The Board of EECL has established a number of committees to assist the directors in
the discharge of their duties and to allow detailed consideration of complex issues.
The current Board committees are:
Audit & Financial Risk
AER 2010 Reset Project Due Diligence.
Each Committee has its own written charter setting out its roles and responsibilities,
composition, structure, membership requirements and the manner in which the
committee is to operate. The Committee charters are reviewed on an annual basis
and are made available on the company website.
Appointment to a Committee is a decision of the Board and all Committees comprise
4. Code of conduct and directors’ duties
The Board has adopted a Directors’ Code of Conduct and more detailed Conflicts of
The Corporations Act 2001 applies to the Board. Accordingly, the statutory duties of
directors apply and the Board follows normal procedures for the disclosure of
standing interests, and material personal interests, of directors and for how the Board
deals with such interests.
5. Independence of Directors
All Directors of EECL, including the Chairman, are non-executive directors.
The Board regularly assesses the independence of the directors and in light of their
disclosed interests and having regard to the criteria for assessing the independence
of directors under the ASX Corporate Governance Guidelines. When conducting the
assessment, materiality is judged on a case-by-case basis by reference to each
director’s individual circumstances.
Approved 30 April 2010
Senior management, working with Chairman, provide an induction program for new
directors in order to assist them in fulfilling their duties and responsibilities.
The program is to include the provision of documents and discussions with
executives. The induction also covers industry issues and the directors’
responsibilities not only on the Board, but also Board committees.
7. Board meetings
Board meetings are held on a regular basis, as determined annually by the Board.
The Board also determines a draft Annual Agenda for Board meetings. The agenda
for each Board meeting is to be determined by the Chairman, Chief Executive and
The Directors should meet at least once each year, without management, for
discussion of management issues. Otherwise, the Chief Executive, Company
Secretary and such of the senior management team as agreed by the Chief
Executive and Chairman may attend Board meetings.
8. Continuing education
Directors are encouraged to participate in professional development and keep up to
date on relevant topical issues.
A Professional Development Policy for Directors has been adopted. In particular,
Directors may attend director professional development courses that are consistent
with the Professional Development Policy and that relate to the Director’s function as
a Director or Committee member, to be paid for by Ergon Energy.
9. Access to information and independent professional advice
Each Director have the right to seek independent professional advice at the
Company’s expense, subject to the prior approval of the Chairman.
The Board has the authority to conduct or direct any investigation required to fulfil its
responsibilities and has the ability to retain, at the Company’s expense, such legal,
accounting or other services, consultants or experts as it considers necessary from
time to time in the performance of its duties.
10. Evaluation of Board performance
The Board reviews and evaluates the performance of itself and Committees on a
regular basis not exceeding two years. The performance review process is
determined by the Board from time to time in accordance with the terms of the Board
Performance Evaluation Policy approved in February 2006.
Approved 30 April 2010