Governance

1. Responsibilities of Management and The Board

Introduction

Under the ASX Listing Rule 4.10, companies are required to disclose in their Annual Report the extent to which they have followed the best practice recommendations of the ASX Corporate Governance Council.

Corporate governance is the system of which companies are directed and managed.  It influences how the objectives of the company are achieved, how risk is monitored and assessed and how performance is optimised.

Good corporate governance structures encourage companies to create value and provide accountability and control systems commensurate with the risks involved.

Responsibility of the Board

The Board is responsible for:

  • Oversight of the company;
  • Appointment and removal of all senior executives including the Company Secretary;
  • Input into and final approval of senior management’s development of corporate strategy and performance objectives;
  • Review and ratify risk management, internal compliance and control and codes of conduct.
  • Monitor and review senior management’s performance and implementation of strategy, ensuring appropriate resources are available;
  • Approval and monitoring and progress of major capital expenditure, capital management, acquisitions and divestitures; and
  • Approval and monitoring financial, operational and other reporting.

Responsibilities of Management

Management is responsible for:

  • The day to day management and running of the company;
  • Recommendation of corporate strategy;
  • Utilisation of appropriate resources to achieve corporate strategy;
  • Identification and recommendation of appropriate risk management procedures for the company;
  • Development and recommendation of policies and procedures to ensure compliance with statutory and moral responsibilities of the company.

2. Board Composition and Structure

Introduction

Under the ASX Listing Rule 4.10, companies are required to disclose in their Annual Report the extent to which they have followed the best practice recommendations of the ASX Corporate Governance Council.

Corporate governance is the system of which companies are directed and managed.  It influences how the objectives of the company are achieved, how risk is monitored and assessed and how performance is optimised.

Good corporate governance structures encourage companies to create value and provide accountability and control systems commensurate with the risks involved.

Sandfire Resources NL Policy

The composition of the Board is determined using the following principles:

  • The Board comprises five Directors and may be increased where it is felt that additional expertise is required in specific areas, or when an outstanding candidate is identified.
  • The Board does not at this time have a majority of independent non-executive Directors but when considered appropriate and economical this will be rectified.
  • The Chairperson of the Board is a non-executive person.
  • The Board comprises Directors with a broad range of expertise but with an emphasis on exploration and mining related experience.

The Board has a Nomination Committee that consists of all members of the Board.  The committee reviews its composition as required to ensure that the Board has the appropriate mix of expertise and experience.  When a vacancy exists, for whatever reason, or where it is considered that the Board would benefit from the services of a new director with particular skills, candidates with the appropriate expertise and experience will be considered.  The Board then appoints the most suitable candidate who must stand for election at the next general meeting of shareholders.

The Board as a whole reviews the performance of all Directors each year.  Directors whose performance is unsatisfactory are counselled and encouraged to improve their performance.  If the Board believes their performance has not adequately improved, they are asked to retire.

The corporate governance section of the Annual Report contains information on Directors consistent with the recommendations of the best practice principles in relation to the composition and structure of the Board.

3. Code of Conduct

Introduction

Under the ASX Listing Rule 4.10, companies are required to disclose in their Annual Report the extent to which they have followed the best practice recommendations of the ASX Corporate Governance Council.

Corporate governance is the system of which companies are directed and managed.  It influences how the objectives of the company are achieved, how risk is monitored and assessed and how performance is optimised.

Good corporate governance structures encourage companies to create value and provide accountability and control systems commensurate with the risks involved.

Sandfire Resources NL Policy

Ethical Standards

The Board subscribes to the Code of Conduct as published by the Institute of Company Directors.  This Code of Conduct has been communicated to all staff.

All employees (including Directors) are expected to act with the utmost integrity and objectivity, striving at all times to enhance the reputation and performance of the company.

Code of Conduct

  • All employees must act honestly, in good faith and in the best interests of the company as a whole.
  • All employees have a duty to use due care and diligence in fulfilling the functions of their office and exercising the powers attached to that office.
  • All employees must use the powers of office for a proper purpose, in the best interests of the company as a whole.
  • All employees must recognise that the primary responsibility is to the company’s shareholders as a whole but should, where appropriate, have regard for the interests of all stakeholders of the company.
  • All employees must not make improper use of information acquired as an employee.
  • All employees must not take improper advantage of their position.
  • All employees must not allow personal interests, or the interests of any associated person, to conflict with the interests of the company.
  • All employees have an obligation to be independent in judgement and actions and to take all reasonable steps to be satisfied as to the soundness of all decisions taken.
  • Confidential information received by employees in the course of the exercise of their duties remains the property of the company from which it was obtained and it is improper to disclose it , or allow it to be disclosed, unless that disclosure has been authorised by that company, or the person from whom the information is provided, or is required by law.
  • All employees should not engage in conduct likely to bring discredit upon the company.
  • All employees have an obligation, at all times, to comply with the spirit, as well as the letter, of the law and with the principals of this Code.
  • All employees are encourages to report, to their appropriate supervisor, instances of unlawful or unethical behaviour by others.

Trading Policy

Directors – no trading in Sandfire shares is allowed unless the market is fully informed and any intention to trade must be given to the Board.

Senior Management – no trading in Sandfire shares is allowed unless the market is fully informed.

All employees have been made aware of the insider trading provisions of the Corporations Act (2001).

4. Financial Reporting

Introduction

Under the ASX Listing Rule 4.10, companies are required to disclose in their Annual Report the extent to which they have followed the best practice recommendations of the ASX Corporate Governance Council.

Corporate governance is the system of which companies are directed and managed.  It influences how the objectives of the company are achieved, how risk is monitored and assessed and how performance is optimised.

Good corporate governance structures encourage companies to create value and provide accountability and control systems commensurate with the risks involved.

Sandfire Resources NL Policy

The Managing Director and senior financial staff must state in writing to the Board that the company’s financial reports present a true and fair view, in all material respects, of the company’s financial condition and operational results and are in accordance with relevant accounting standards.

The Audit Committee’s primary objective is to facilitate the proper execution of the responsibilities of the Board of Directors relating to accounting and reporting practices of the Company.

The Committee is comprised of the full Board of Directors and the external auditors may attend by invitation.  The committee elects the Chairperson.
 
The duties and responsibilities of the Committee are to:

  • Evaluate the overall effectiveness of the external audit through review meetings with the auditors.
  • Evaluate the adequacy and effectiveness of the Company’s accounting and administrative policies and internal control systems by regular communication with management and external auditors.
  • Review all final draft financial statements, reports and announcements related therefore with the managing director and auditors and recommend on their adequacy to the Board prior to release to members and other public forums.
  • Review and determine the effects of any proposed changes to accounting policies and make recommendations to the Board on their acceptance or otherwise.
  • Review all statutory regulatory, trustee or lender reports submitted to or made by the Company and to report or recommend to the Board as appropriate.
  • Report to the board of Directors on Committee activities.

5. Release of Company Information

Introduction

Under the ASX Listing Rule 4.10, companies are required to disclose in their Annual Report the extent to which they have followed the best practice recommendations of the ASX Corporate Governance Council.

Corporate governance is the system of which companies are directed and managed.  It influences how the objectives of the company are achieved, how risk is monitored and assessed and how performance is optimised.

Good corporate governance structures encourage companies to create value and provide accountability and control systems commensurate with the risks involved.

Sandfire Resources NL Policy

Sandfire Resources NL is required to disclose the following information regularly to the market:

  • Quarterly Mining and Exploration Report;
  • Half Year Report;
  • Preliminary Final Report.


Listing Rule 3.1 requires Sandfire Resources NL to immediately inform the market once it becomes aware of any information that would have a material effect on the price of it’s shares.

All market releases are authorised by the Board of Directors before release.

Responding to Enquiries

Approaches by stockbrokers/analysts or shareholders seeking information that is not publicly available should be directed to the Managing Director.

Employees should not discuss Sandfire Resources NL business with stockbrokers, analysts or shareholders.

No Sandfire Resources NL employee is to discuss Sandfire Resources NL business with outside parties unless authorised by the Managing Director.

Government department queries outside the scope of normal operational dealings should be referred to the Managing Director.

The Managing Director must co-ordinate the approval of the release of information that could affect Sandfire Resources NL share price.

6. Shareholder Rights

Introduction

Under the ASX Listing Rule 4.10, companies are required to disclose in their Annual Report the extent to which they have followed the best practice recommendations of the ASX Corporate Governance Council.

Corporate governance is the system of which companies are directed and managed.  It influences how the objectives of the company are achieved, how risk is monitored and assessed and how performance is optimised.

Good corporate governance structures encourage companies to create value and provide accountability and control systems commensurate with the risks involved.

Sandfire Resources NL Policy

Communication – Sandfire Resources NL strongly supports the belief that shareholders, as the owners of the company, should have access to timely and relevant information.

Releases by the company to the ASX are immediately placed on the company website (www.sandfire.com.au).  This information includes downloadable copies of all reports released by the company as well as notices of meetings.

Sandfire Resources NL website contains press releases, broker reports and company presentations.

Sandfire Resources NL encourages all interested parties, not only shareholders, to receive company information electronically.  The company website has a specific “Add me to you Mailing List” link to encourage and assist this.

Meetings of Shareholders – It is a requirement of Sandfire Resources NL that a representative of the audit firm is in attendance at the company’s Annual General Meeting to answer any shareholder questions.  Sandfire Resources NL Management are also available for meetings of shareholders to answer any questions about aspects of the company’s operations.

7. Risk Management

Introduction

Under the ASX Listing Rule 4.10, companies are required to disclose in their Annual Report the extent to which they have followed the best practice recommendations of the ASX Corporate Governance Council.

Corporate governance is the system of which companies are directed and managed.  It influences how the objectives of the company are achieved, how risk is monitored and assessed and how performance is optimised.

Good corporate governance structures encourage companies to create value and provide accountability and control systems commensurate with the risks involved.

Sandfire Resources NL Policy

The Board examines and considers areas of significant business risk and implements policy to minimise exposure to these risks.

Areas of risk which are considered at Board Meetings include:

  • Asset protection/development
  • Human Resources
  • Performance of activities
  • The environment
  • Organisational behaviour   
  • Continuous disclosure obligations
  • Income protection   
  • Minimisation of business risk

The Managing Director and senior financial staff must state in writing to the Board that the company’s financial reports present a true and fair view, in all material respects, of the company’s financial conditions and operational results and are in accordance with relevant accounting standards.  Additionally, the chief executive officer and chief financial officer state in writing that this is based on a sound system for risk management and internal compliance and control which implements the policies adopted by the Board and is operating efficiently and effectively in all material respects.

Sandfire Resources NL Management, on an ongoing basis, reviews all aspects of significant business risk and makes recommendations to the Board on policies to be implemented and/or changes to be made to the company’s operations.

8. Board and Management Performance

Introduction

Under the ASX Listing Rule 4.10, companies are required to disclose in their Annual Report the extent to which they have followed the best practice recommendations of the ASX Corporate Governance Council.

Corporate governance is the system of which companies are directed and managed.  It influences how the objectives of the company are achieved, how risk is monitored and assessed and how performance is optimised.

Good corporate governance structures encourage companies to create value and provide accountability and control systems commensurate with the risks involved.

Sandfire Resources NL Policy

Directors – The Board of Directors reviews the performance of all Directors each year.  Directors whose performance is unsatisfactory are counselled and encouraged to improve their performance.  If the Board believes their performance has not adequately improved, they are asked to retire.  The Board does not measure itself against measurable and qualitative indicators, as it believes shareholders will ultimately decide if the Board’s performance has been satisfactory.

Management – All employees have a performance review undertaken each year.  In addition to their performance against previously agreed goals, their performance is also measured against the following indicators:

  • Safety;
  • Work ethic;
  • Loyalty   
  • Trade skill sand competence; and
  • Integrity

Independent Professional Advice

Each director has the right to seek independent professional advice at the company’s expense.  However, prior approval of the Chairman is required, which is not unreasonably withheld.

Continuing Professional Development

The company encourages all employees to further develop their trade and professional skills.  Employees who successfully complete a Board approved course of study are reimbursed by the company for any expenses they incur in completing the course.

9. Remuneration

Introduction

Under the ASX Listing Rule 4.10, companies are required to disclose in their Annual Report the extent to which they have followed the best practice recommendations of the ASX Corporate Governance Council.

Corporate governance is the system of which companies are directed and managed.  It influences how the objectives of the company are achieved, how risk is monitored and assessed and how performance is optimised.

Good corporate governance structures encourage companies to create value and provide accountability and control systems commensurate with the risks involved.

Sandfire Resources NL Policy

The Board has a Remuneration Committee consisting of all Directors.

The role of the Remuneration Committee is to review remuneration packages and policies applicable to the managing director and executive officers.  However shareholders must approve any changes to the aggregate non executive Directors’ fees.  Non-executive Directors, from recommendations provided by the managing director and from data provided by remuneration consultants, determine the remuneration of senior executives.

Remuneration levels are competitively set to attract the most qualified and experience Directors and senior executives.  The Remuneration Committee and the managing director obtain independent advice on the appropriateness of remuneration packages.

Remuneration packages do not have guaranteed equity based components or performance based components.

The issue of Company securities to employees and other key personnel is determined by the Remuneration Committee on a yearly or half yearly basis.
 
Directors – An agreement exists between each director and the company to cover access to books, indemnity, and disclosure of share trading and retirement benefits. 

Disclosure – The company discloses full remuneration details of each director and executive officers of the company in its’ Annual Report each year.  In addition, any options or shares issued to these or any other employees of the company are disclosed in the Annual Report each year.

10. Stakeholders and the Company

Introduction

Under the ASX Listing Rule 4.10, companies are required to disclose in their Annual Report the extent to which they have followed the best practice recommendations of the ASX Corporate Governance Council.

Corporate governance is the system of which companies are directed and managed.  It influences how the objectives of the company are achieved, how risk is monitored and assessed and how performance is optimised.

Good corporate governance structures encourage companies to create value and provide accountability and control systems commensurate with the risks involved.

Sandfire Resources NL Policy

The Board recognises that it has a duty to all legitimate stakeholders in the company, be they employees, contractors or the community of shareholders.

Sandfire Resources NL primary objective is to maximise shareholder wealth through successful exploration.

We will achieve this by:

  1. Utilising an effective and focused exploration program to:
    • discover new, quality mineral resources;
    • expand these mineral resources.
  2. Actively seeking new, quality gold or base metal projects through acquisitions.
  3. Maintain practices which optimise exploration and minimises all Company overheads.
  4. Continue to expose the Company to potentially world-class ore bodies through appropriate joint venture arrangements with other companies for high-risk exploration projects.

Sandfire Resources NL is committed to conducting all activities in a manner which:

  1. Protects the health and safety of all employees, contractors, and community members.
  2. Recognises values and reward the individual contribution of each employee.
  3. Achieves a balance between economic development and maintenance of the social responsibility.
  4. Maintains good relationships with suppliers and the local community.
  5. Is honest, lawful and moral.

All employees (including Directors) are expected to act with the utmost integrity and objectivity, striving at all times to enhance the reputation and performance of the company.

Sandfire Resources NL welcomes and encourages the involvement of all employees in the achievement of these objectives, and expects them to uphold these company values.