To ensure Wilson Investment Fund Limited (the Company) operates effectively and in the best interests of shareholders, the Board has followed the Corporate Governance Principles and Recommendations established by the ASX Corporate Governance Council having regard to the nature of the Company's activities and its size.
ROLE OF THE BOARD
The Company has a Board but no full time employees. Subject at all times to any written guidelines issued by the Board of Directors of Wilson Investment Fund Limited Limited, the day-to-day management and investment of funds is carried out by MAM Pty Limited (the Manager) pursuant to a management agreement.
The role of the Board is to set strategic direction and to be responsible for the overall corporate governance of the Company which includes:
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to oversee and monitor the performance of the Manager's compliance with the management agreement and to ensure that the Manager is monitoring the performance of other external service providers;
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ensuring adequate internal controls exist and are appropriately monitored for compliance;
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ensuring significant business risks are identified and appropriately managed;
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approving the interim and final financial statements and related reports and other communications to the ASX and shareholders; and
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setting appropriate business standards and code for ethical behaviour.
The Board aims to ensure that all Directors and the Manager act with the utmost integrity and objectivity and endeavour to enhance the reputation of the Company. The Board should act in a manner designed to create and build sustainable value for shareholders.
COMPOSITION OF THE BOARD
The skills, experience and expertise relevant to the position of each director who is in office at the date of the annual report and their term in office are detailed in the directors' report.
The Board has two independent Directors and two non independent Directors. The names of the Directors considered to be independent are:
John Abernethy
Julian Gosse
Whilst the Company agrees with the benefits of a majority of independent Directors, it believes that it can better achieve the results of the Company with the current Boards' level of expertise and without burdening shareholders with the additional costs associated with adding further independent Directors.
The Chairman is not independent. The Company believes that an independent Chairman does not necessarily improve the function of the Board. The Company believes that when the Chairman is a significant driver behind the business and is a sizeable shareholder, it adds value to the Company.
The Board monitors the business risks and system of internal control and guides the affairs of the Company in the discharge of its stewardship responsibilities. The Board confirms that there is an ongoing process of identifying, evaluating and managing the risks faced by the Company. The risk framework and internal controls have been documented in the Risk Management Policy. Responsibility for managing and progressing the profitable operation and development of the Company is delegated to the Chairman who reports back to the rest of the Board.
Given the size of the Board, the Board as a whole considers the composition of the Board and appointment of new Directors. The Board identifies suitable candidates to fill vacancies as they arise. The performance of each Director is reviewed by the Chairman periodically. At every annual general meeting one third of the Directors must retire from office and be eligible for re-election. Shareholder approval is required on the composition of the Board.
AUDIT & RISK COMMITTEE
The Company has formed an Audit & Risk Committee consisting of three non-executive Directors of whom two are independent as defined by the ASX Corporate Governance Council's principles. This is considered adequate given the size of the Board (4 members) and the nature of the Company. The members of the Audit & Risk Committee are:
John Abernethy Chairman, independent
Matthew Kidman Non-Executive Director, non-independent
Julian Gosse Non-Executive Director, independent
The Committee's responsibilities are to:
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oversee the existence and maintenance of internal controls and procedures to ensure compliance with all applicable regulatory obligations;
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oversee the financial reporting process;
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review the annual and half-year financial reports and recommend them for approval by the Board of Directors;
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nominate external auditors; and
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review the existing external audit arrangements.
The external audit firm partner responsible for the Company audit attends meetings by invitation. The Committee formally reports to the Board after each of its meetings.
The Company's external audit is undertaken by Moore Stephens Sydney and the audit engagement partner is required to be changed at regular intervals. Scott Whiddett, a partner of Moore Stephens Sydney, is the partner responsible for the external audit of the Company for the 2008 financial year.
REMUNERATION OF DIRECTORS
Given the number of Directors (4), a remuneration committee has not been formed as it is believed that such a committee would not serve to protect or enhance the interests of the shareholders. As such, the Board deals with the issue of remuneration as a whole.
The maximum total remuneration of the Directors of the Company has been set at $80,000 per annum to be divided in such proportions as they agree. The scope of the Company's operations, and the frequency of Board meetings are principal determinants of the fee level. Further detail is provided in the Directors' Report.
Entities associated with the Chairman, Geoff Wilson, and Director, Matthew Kidman of Wilson Investment Fund Limited hold 80% and 20% respectively of the issued shares of the investment management company, MAM Pty Limited. Further detail is provided in the Directors' Report.
SHAREHOLDER COMMUNICATION
The Board aims to ensure that the shareholders are informed of all major developments affecting the Company's state of affairs.
Measures are in place to ensure all investors have equal and timely access to material information concerning the Company and that Company announcements are factual and presented in a clear and balanced way.
The Company Secretary is primarily responsible for coordinating the disclosure of information to shareholders and regulators under the direction of the Board.
Information is communicated to shareholders through the:
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website;
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ASX Company Announcements platform;
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Annual Report;
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monthly NTA releases; and
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other correspondence regarding matters that impact shareholders as required.
Monthly NTA releases contain additional information concerning the underlying investment portfolio of the Company in an effort to give investors a better understanding of the Company.
The Board encourages full participation of shareholders at the Annual General Meeting to ensure a high level of accountability and identification with the Company's strategy and goals.
Shareholder information sessions are also held twice a year in May and November following the AGM. These provide an informal forum where shareholders are given the opportunity to raise questions and participate in general discussion about the Company.
BOARD'S POLICY ON DEALING IN SHARES
Directors are not required to hold a minimum number of shares pursuant to the Company's Constitution. However, their current relevant interests in the Company's shares are shown in the Directors' Report.
Subject to them not being in possession of undisclosed price sensitive information, Directors may deal in shares of the Company when appropriate. As Wilson Investment Fund Limited is an investment company announcing its results monthly, the Board believes the shareholders are generally fully informed.
INDEPENDENT PROFESSIONAL ADVICE AND ACCESS TO COMPANY INFORMATION
Each Director has the right to access all relevant information and subject to prior consultation with the Chairman, may seek independent professional advice at the entity's expense. A copy of advice received by the Director is made available to all other members of the Board.
CONFLICT OF INTEREST
In accordance with the Corporations Act 2001, the Directors must keep the Board advised, on an ongoing basis, of any interests that could potentially conflict with those of the Company. Where the Board believes that a significant conflict exists, the Director concerned does not receive the relevant Board papers and is not present at the meeting whilst the item is considered.
