Corporate Governance Policies
1. Ethical standards
1.1 Widespread Portfolios Limited (the “Company”) expects its directors and employees to act legally, ethically and with integrity in a manner consistent with the Company’s policies, guiding principles and values. The following measures have been put in place to assist with achieving this expectation:
Avoiding Conflicts of Interest
1.2 To maintain integrity in decision making each director must advise the Board of any potential conflict of interest. If a director is “interested” (as that term is defined in section 139 of the Companies Act 1993), then in accordance with the NZX Listing Rules, that director will not vote on the matter in question. If a significant conflict of interest exists, the Board may form an independent committee to consider the relevant matter.
1.3 Directors have an obligation to ensure that their individual interests do not interfere, or appear to interfere, with the Company's interests. Directors are required to ensure that they do not have any undisclosed and unapproved business relationships, including with suppliers, customers, shareholders, investee companies or competitors that might impair, or could be perceived to impair, the independence of any judgment that they may make on behalf of the Company.
1.4 Directors cannot not accept any bribe, gratuity or other inducements in the course of their business dealings on behalf of the Company and must advise the Board if they have received any gratuity or other inducements which may create, or be perceived to create, a conflict of interest.
Fair Dealing
1.5 Directors must deal honestly and fairly in all their dealings with the Company’s shareholders, professional advisors, and other stakeholders. Directors must treat all colleagues with respect and dignity.
Use of Company Assets, Property and Company Information
1.6 Directors must use their best endeavours to protect the Company’s assets and property from loss, damage, misuse, waste and theft. Directors can only use Company assets and property in their control and care for the legitimate business purpose of the Company, and cannot use that property for any other purpose, including for personal gain.
1.7 Directors must use corporate information gained during their relationship with the Company only in the best interests of the Company and not for personal gain.
Compliance with All Laws, Regulations and Rules
1.8 Directors must, at all times, act honestly and in good faith, and comply with all applicable laws including, legislation, regulations, local authority by-laws and rules (including the NZX Listing Rules) and codes of practice.
Trading in Company Securities
1.9 Directors and employees of the Company are subject to limitations on their ability to buy or sell shares in accordance with the NZX Listing Rules and the Securities Markets Act 1988.
Interests Register
1.10 In accordance with the Companies Act 1993 and the Securities Markets (Disclosure of Relevant Interests by Directors and Officers) Regulations 2003, the Company maintains an interests register in which relevant transactions and matters involving the directors are recorded.
Reporting Unethical Decision Making and/or Behaviour
1.11 If a member of the Board becomes aware of any unethical decision making and/or behaviour by any other member of the Board, it must be reported to the Chairman. In a situation where such decision making and/or behaviour involves the Chairman, this must be reported to the Managing Director.
1.12 The Chairman or the Managing Director (as relevant) will be responsible for investigating and deciding on any claims of unethical decision making and/or behaviour.
2. role of the board
2.1 The Board of Directors of the Company is elected by the shareholders to supervise the management of the Company. The Board establishes the Company's objectives, overall policy framework within which the business of the Company is conducted and confirms strategies for achieving these objectives, monitors management's performance and ensures that procedures are in place to provide effective internal financial control.
2.2 The Board is responsible for guiding the corporate strategy and direction of the Company and has overall responsibility for decision making. The Board delegates to the Managing Director responsibility for implementing the Board’s strategy and for managing the operations of the Company.
2.3 The Board also:
(a) approves the policies and budgets of the Company and ensures that these are followed;
(b) approves major investments and divestments and monitors the performance of those investments (subject to shareholder approval, where applicable);
(c) monitors financial performance including approving financial statements and the annual report;
(d) ensures appropriate risk management systems are established and reports on compliance with those systems;
(e) reviews and approves the framework for the Company’s relationship with its Auditor;
(f) ensures that the Company provides continuous disclosure of material information to NZX and the investment community so that shareholders have available information they reasonably require to make informed assessments of the Company’s prospects;
(g) facilitates the fulfilment of the Company’s statutory functions; and
(h) meets all relevant responsibilities imposed at law, by the rules of NZX, or otherwise.
2.4 The Board must at all times act professionally, honestly and in accordance with all directors’ duties imposed by law, and adhere to the ethical standards set out in this document.
3. board composition and performance
3.1 The Board shall comprise of a minimum of three directors at all times, with at least two independent directors. At least two of the directors must be ordinarily resident in New Zealand.
3.2 The Company intends to continue to:
(a) comply with any applicable director independence requirements under the NZX Listing Rules; and
(b) have a Board comprised of people with a range of complementary attributes.
3.3 The Board meets once every six weeks on a formal scheduled basis, and more frequently in order to prioritise and respond to issues as they arise. Board meetings are frequently held by conference call to reduce travel costs.
3.4 The Chairman of the Board shall be a director that is appointed to that role from time to time by the Board. The Chairman’s role includes managing the Board; ensuring the Board is well informed and effective; acting as the link between the Board and the Managing Director; and ensuring effective communication with shareholders.
3.5 The Chairman may and any individual director may (with the approval of the Chairman), obtain independent advice at the Company’s expense where the director considers it necessary to carry out its or his or her functions.
3.6 The Company does not consider it necessary for it to have, at this time, a Director training programme.
4. board committees
4.1 The Board has two sub-committees: an Audit Committee and a Remuneration Committee. The Board has delegated certain of its responsibilities to these Committees. The decisions of these Committees are reported back to the Board in order to allow the other members of the Board to question committee members.
Audit Committee
4.2 Given the nature of business of the Company and the internal financial controls that the Company has in place, it is not considered necessary to have an internal auditor in addition to an Audit Committee.
4.3 The Audit Committee is comprised solely of non-executive directors of the Company and the members of the Audit Committee shall be identified in the Company’s Annual Report. The function of the Audit Committee is to oversee financial reporting, accounting policies, financial management, and internal control systems.
4.4 The Committee keeps under review the scope and results of audit work, its cost effectiveness and performance, independence and objectivity of the auditors. It also reviews the financial statements and any announcements concerning financial results.
4.5 The Board regularly reviews the performance of the Audit Committee and has overall responsibility for the Company's systems of internal financial control. The Directors have established procedures and policies that are designed to provide effective internal financial control.
Remuneration Committee
4.6 The Board has established a Remuneration Committee. The role of this Committee is to recommend director remuneration packages to shareholders. The Board regularly reviews the performance of the Remuneration Committee.
4.7 The Remuneration Committee consists solely of non-executive directors and the members of the Remuneration Committee shall be identified in the Company’s Annual Report.
Other Committees
4.8 The Board may, from time to time, establish committees to assist it in carrying out its responsibilities and to allow detailed consideration of complex issues or areas of special interest.
4.9 The Company has determined that it is not appropriate, nor in the best interests of its securityholders to establish a Nomination Committee at this time. The Company considers it appropriate to deal with potential nominations at the full Board level and then leave the ultimate decision on Board composition to shareholders through any Board appointee being subject to re-election at the Company’s next annual meeting.
5. reporting and disclosure
5.1 Management accounts are prepared prior to each Board meeting and reviewed by the Board throughout the year to monitor performance against budget targets and objectives.
5.2 The Board must ensure that the Company makes all disclosures required at law in its Annual Report.
5.3 Each Board member receives remuneration from a collective fee pool that is fixed by ordinary shareholder resolution from time to time and allocated between the directors by the Board as it sees fit.
5.4 The Company does not have a remuneration policy however the remuneration of all directors is disclosed each year in the Company’s Annual Report. The level of fees payable to directors is to be of an amount approved from time to time by shareholders. Subject to shareholder approval and the relevant NZX Listing Rule requirements, the directors may be remunerated other than in cash by way of an issue of equity securities.
5.5 Board members are entitled to be reimbursed for costs directly associated with the performance of their role as directors, including for travel.
6. risk management
6.1 The Board reviews management practices in relation to identification and management of significant business risk areas and regulatory compliance. The Board regularly reports the risks associated with its investments on its website.
6.2 Under its constitution, the Company may obtain directors' and officers' liability insurance to cover directors acting on behalf of the Company. This sort of liability insurance usually covers damages, judgements, fines, penalties, legal costs, awarded and defence costs arising from wrongful acts committed while acting for the Company. This sort of liability insurance typically does not cover dishonest, fraudulent, malicious acts, or omissions, wilful breach of statute or regulations, or duty to the Company, improper use of information to the detriment of the Company or breach of professional duty. Particulars of such policy are to be disclosed in the Company’s Annual Report.
6.3 Under its constitution, the Company indemnifies each Director for any liability or costs for which the director may be indemnified under the Companies Act 1993.
7. shareholder relations
7.1 The Company aims to ensure that shareholders are informed of all major developments affecting the Company affairs. Information is communicated to shareholders in the Annual Report, Interim Report, and regular NZX announcements. The Company is to maintain an email address register which any shareholder or stakeholder may request to be included on. All NZX announcements (other than those of an administrative nature) shall be sent to all recipients on the email register. The Company shall also maintain its website to provide comprehensive information about its operations, activities and investments.
7.2 The Company seeks to ensure its shareholders are appropriately informed on its operations and results, with the delivery of timely and focused communication, and the holding of shareholder meetings in a manner conducive to achieving a high degree of shareholder participation.
7.3 Full participation of shareholders at the annual meeting is encouraged. Shareholders have the opportunity to submit questions prior to each meeting and the Managing Director shall be present to assist in answering any specific queries raised. There is also to be an opportunity for shareholders to have informal discussions with the Board for a period after any meeting concludes.
7.4 The Company is committed to providing comprehensive continuous disclosure to shareholders and other stakeholders that is always, at least, in compliance with the NZX Listing Rules.
8. stakeholder interests
8.1 The Company does not currently have any employees or material creditors. The Company’s stakeholders are accordingly limited at present but will develop over time as the Company’s investments develop.
8.2 The Board will remain cognisant of stakeholder interests as they develop and consider policies to deal with different stakeholders accordingly. The Company will maintain public information as described in these policies to give stakeholders access to relevant information.
