About Us
Why Invest in Octanex
- Drilling action commenced in early December with Cornea-3 to be followed by Braveheart-1;
- Well commitment expected from OMV/ENI in December 2009 – and the targets are giant and super giant gas fields. Octanex will be fully carried;
- Octanex holds 100% of a new offshore Taranaki permit - large oil prone targets;
- Significant gas/condensate potential at Winchester;
- Ongoing valuable commercial rights in Southern Exmouth permits via deal with Shell;
- Low exploration commitments – Projects;
- Octanex is committed to investing in transformational resource based opportunities – see below;
- Substantial cash reserves and other liquid assets - see below;
- Tight capital structure - good ASX share trade volumes since listing on that market;
- Participant in large scale exploration - fully carried by major industry players targeting major gas accumulations – OMV Projects and Shell Projects operated permits;
- The Octanex Group has a portfolio of permits several of which having company-making potential;
- Directors and management have significant depth of experience with oil and gas exploration companies – see below;
- A commitment to sound corporate governance practices – see below.
Strong Financial Position ( * Values quoted are as at 30 November 2009)
- Cash reserves in immediately available funds of $29,300,000 with no debt and negligible forward exploration commitments.
- Holds a number of strategic investment shareholdings including:
43,656,180 shares in Cue Energy Resources Ltd (ASX code: CUE) with current value ~$10.0M *;
10,972,923 shares in Orion Petroleum Ltd (ASX code: OIP) with current value ~$1.0M *;
10,000,000 shares and 5,000,000 options in Central Petroleum Ltd (ASX code: CTP) with current value ~$1.75m *;
Total value of all investments in marketable securities is ~ $14m *.
- Cash plus liquid investments equivalent to approximately $0.30 per fully paid share *.
- Octanex is in a strong financial position and well placed to pursue opportunities.
Exploration and Investment Philosophy
- Be an entry point for investment in high quality international scale opportunities;
- Acquire large permits with low obligations in geologically prospective areas but with corporate transformational potential and clear pathways to commercialisation (e.g. Taranaki Basin);
- Acquire known resources with development potential (e.g. Cornea);
- Acquire strategic investment opportunities with strong growth potential (e.g. Central Petroleum with its whole of basin approach to gas and coal seam gas plays);
- Conduct initial exploration (seismic data acquisition etc.) on own account (e.g. Winchester);
- Focus on risk reduction and avoid direct funding of high risk, expensive drilling obligations;
- Farm out to substantial industry participants with the expertise to assess high value opportunities with development potential (e.g. farmout to OMV/ENI and the scope in the Exmouth Plateau for multiple giant and super giant gas fields).
Directors, Company Secretary and Management
Mr E Geoffrey Albers LL.B, FAICD (Chairman and Chief Executive Officer)
Mr Graeme A Menzies LL.B (Non-Executive Director)
Mr James M D Willis LL.M(Hons), Dip Acc (Executive Director)
Mr J G (Jack) Tuohy BCA. CA (Company Secretary)
Dr Simon J Sturrock B.Sc.(Hons), PhD. FGS (Consultant Geophysicist / Exploration Manager)
Mr Robert J Wright B Bus, CPA (Chief Financial Officer)
Mr E Geoffrey Albers LL.B, FAICD (Chairman and Chief Executive Officer)
Mr Albers has over 30 years experience as a director and administrator in corporate law, petroleum exploration and resource sector investment. He is a law graduate of the University of Melbourne and, after being admitted in 1969 as a Solicitor of the Supreme Court of Victoria, held a corporate practicing certificate in Victoria until 2001.
In 1977 Mr Albers first became involved in oil exploration. At that time companies associated with him applied for and were awarded exploration permits in the offshore Gippsland and Bass Basins. Exploration in one of these permits, T/14P, led directly to the discovery of the Yolla Gas/Condensate Field which is now being produced by Origin Energy Limited and others.
In the early 1980's Mr Albers formed Cue Energy Resources Limited ("Cue") and Southern Petroleum N. L. (“Southern Petroleum”) in New Zealand. Cue is listed on ASX and has a significant interest in the Maari oilfield development, the unitised S E Gobe oilfield in PNG and the Oyong oil and gas development in offshore Indonesia. Mr Albers was, until recently, a director of Cue. Southern Petroleum became a successful production company through its interest in the Waihapa oilfield and is now a subsidiary of Shell New Zealand.
Mr Albers founded Octanex and is a substantial shareholder in the Company. He was also a founder of ASX-listed MEO Australia Limited (“MEO”) and is a former director of that company. MEO is pursuing the development of a $2 billion gas processing plant on Tassie Shoal in the Timor Sea, 300kms north-west of Darwin. He then founded Bass Strait Oil Company Ltd (“Bass”), an ASX-listed company which has developed a portfolio of interests in the offshore Gippsland Basin and is a niche explorer in that basin. Mr Albers was until recently a director of Bass.
In 2004 Mr Albers was instrumental in the formation of Moby Oil & Gas Limited (“Moby”) which has extensive interests in various permits in offshore Australia. Mr Albers is a director of and substantial shareholder in Moby, which is also ASX-listed.
In addition, Mr Albers has interests in a number of unlisted public and private companies active in exploration for oil and gas in Australian offshore waters. He has been a Director since 2 October 1984.
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Mr Graeme A Menzies LL.B (Non-Executive Director)
Mr Menzies is a barrister and solicitor. He graduated from Melbourne University in 1971 and qualified for admission to the degree of Master of Laws in 1975. He was admitted to practice in 1972. Since 1987 he has carried on practice as a sole practitioner under the name of Menzies & Partners. In the course of his legal practice Mr Menzies has been involved in a wide range of activities, including takeovers, litigation in respect thereof, numerous capital raisings and corporate reconstructions. He has been involved as a lawyer in the listing of a large number of public companies ranging from junior explorers to substantial mining companies. Over recent years his activities have focused primarily on corporate reconstructions and capital raisings. Mr Menzies is a director of Moby Oil & Gas Limited and Exoil Limited. He has been a Director since 26 August 2003.
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Mr James M D Willis LL.M(Hons), Dip Acc (Executive Director)
Until his resignation from the practice in 2007, Mr Willis had been a partner in the leading New Zealand law firm of Bell Gully for 25 years. His practice speciality was in the upstream oil and gas area, particularly relating to issues concerning gas contracting and the development of oil and gas reserves, joint ventures and upstream petroleum related acquisitions. He has acted for the leading participants in the upstream petroleum industry in New Zealand. In 2007 Mr Willis relocated to Australia to take up a management role with the group of companies controlled by Mr Albers and his associates and is now a fulltime executive director of companies in that group. Mr Willis is Chairman of Exoil Limited and was a director of ASX-listed MEO Australia Limited until July 2008, a position he had held for 10 years during a crucial period of its growth. With Mr Albers he was co-founder and later a director of Southern Petroleum, a successful New Zealand explorer that is now wholly-owned by Shell. He has been a Director since 18 August 2009.
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Mr J G (Jack) Tuohy BCA. CA (Company Secretary)
Mr Tuohy has over 20 years corporate experience in the oil and gas exploration and production and motor vehicle industries, acting as a director and company secretary. Over this period he has been involved in the various aspects of public and private company administration, especially as this relates to the oil and gas exploration and production sector and to public listed company activities, obligations and requirements. Mr Tuohy holds a Bachelor’s degree in accountancy from Victoria University of Wellington and is a Chartered Accountant in New Zealand. He was based in New Zealand for the bulk of his career but relocated to Australia in 2008. Mr Tuohy is a director of Bass Strait Oil Company Limited and of the unlisted public companies, Goldsborough Limited and National Oil & Gas Limited. He currently acts as Company Secretary for a number of ASX and NSX-listed and unlisted Australian public companies, including Octanex, Moby Oil & Gas Limited and Exoil Limited. Mr Tuohy was appointed as Company Secretary on 17 September 2008.
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Dr Simon J Sturrock B.Sc.(Hons), PhD. FGS (Consultant Geophysicist / Exploration Manager)
The Company’s leading technical consultant is Strat Trap Pty Ltd, a successful geological interpretation consultancy based in Perth and whose principal technician and director is Dr Sturrock.
Dr Sturrock is a seismic interpreter and sequence stratigrapher with 26 years international and Australasian exploration and development experience, including 11 years with British Petroleum and six years as Exploration Manager of Octanex. He possesses a unique and powerful skills combination for stratigraphic prediction and has a proven track record in accurately predicting reservoir and seal distribution that has substantially reduced costs and assisted in the discovery of significant hydrocarbons. Dr Sturrock has an extensive knowledge of practical sequence stratigraphy and he is highly experienced in applying these skills to field appraisal and development, exploration prospect and play fairway evaluation and risk analysis.
Dr Sturrock is a member of the Petroleum Exploration Society of Australia, the American Association of Petroleum Geologists, the Petroleum Exploration Society of Great Britain, the Australian Society of Exploration Geophysicists and the Formation Evaluation Society of Australia, as well as being a Fellow of the Geological Society of London. He has also carried out post-doctoral research at the British Museum that was funded by British Petroleum.
He is skilled in the interpretation and integration of 2D and 3D seismic, electric logs, cores, sedimentological and stratigraphic data into predictive depositional models for improved risk analysis. Dr Sturrock is also an accomplished sequence stratigrapher, with a thorough experience in clastics and carbonates and an extensive knowledge of reservoir distribution and quality in submarine fans. He is accomplished in high-resolution sequence stratigraphy and facies delineation for stochastic reservoir modelling and a proficient user of personal computers and workstations (Stratimagic; GeoLog, Geoquest; Charisma, IESX, SeisClass, Strat Log, Well Pix, Landmark; Seisworks & Stratworks & Petrosys mapping). He is skilled in teamwork and multi-disciplinary project co-ordination and accomplished in making technical presentations to senior management and joint venturers. In addition, he has taught sequence stratigraphy courses to oil companies and university M.Sc classes.
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Mr Robert J Wright B Bus, CPA (Chief Financial Officer)
Mr Wright is a senior financial professional with over 20 years commercial experience in the resource, energy and manufacturing industries gained at various companies and locations, including 14 years at BHP. He is Chief Financial Officer for several listed exploration companies and is a member of CPA Australia.
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Corporate Governance
The Directors are responsible for the strategic direction of the Company, the identification and implementation of corporate policies and goals and monitoring of the business and affairs of the Company on behalf of the Shareholders.
This section includes information on how the Company and the Board address, on an ongoing basis, the specific requirements of ASX for corporate governance, the operation of Board committees and their charters, the Company’s code of ethics and share trading policy and the Board’s own charter.
Important to a culture of actively addressing the area of corporate governance is the Board’s ongoing review of the Company’s relevant and existing practices To this end the Board annually reviews the Company’s corporate governance practices by benchmarking against the latest Corporate Governance Principles and Recommendations (“principles & recommendations”) issued by the ASX Corporate Governance Council (“Council”). The Board has adopted the elements of the eight principles & recommendations that are appropriate to the Company. Details of the governance practices applied by the Company and specific instances where the Company has followed alternative practices to the Council’s eight principles and recommendations are set out below under the heading “Adherence to the ASX Principles & Recommendations of Corporate Governance”.
Given that the Company has to date been small, with limited activities and limited resources and has a three member Board, it has not established a series of separate committees to address specific areas of corporate governance. Consequently, corporate governance is dealt with by the Board under the terms of reference of its charter and acting as a committee in relation to the various areas or issues required to be considered. The capacity of the Company to comply with the principles & recommendations is limited because of the present size and structure of the Board, comprising as it does Mr EG Albers, who is executive Chairman and not independent, Mr JMD Willis, who is an executive director and not independent, and Mr GA Menzies, who is non-executive and not independent.
Separate from its own charter (the main terms of which are detailed below), the Board has developed formal charters that incorporate the terms of reference under which it addresses the areas and functions of ‘Audit and Compliance’ and ‘Remuneration and Nominations’ - these are explained below. These charters introduce a formal structure of objectives and functions for the Board to apply when addressing these aspects of the Company’s corporate governance, in anticipation of an expanded Board establishing these functions under separately established committees.
The Board has established itself as two committees to separately address the areas of ‘Audit and Compliance’ and ‘Remuneration and Nominations’ and each of the Directors is a member of those committees. The Board has not established separate committees to address risk management or health, safety and environment, with such issues currently dealt with by the Board as a whole. In all relevant situations, any interested Director(s) is expected to abstain or be absent from Board deliberations as required either by the Act or as necessary to avoid conflict or possible breach of their fiduciary duties.
Audit and Compliance Committee
The function of an Audit and Compliance Committee is to give additional assurance regarding the quality and reliability of financial information used by the Board and regarding the financial information provided by the Company pursuant to its statutory reporting requirements.
Aspects of the audit and compliance function addressed by the Board are: to consider any matters relating to the financial affairs of the Company, compliance with statutory requirements, adherence to applicable Listing Rules and issues relating to internal and external audit. Additional to those aspects, the Board examines any other matters of an audit or compliance nature that come to its attention or are referred to it.
Nominations and Remuneration Committee
The function of a Remuneration Committee is reviewing the remuneration policies and practices of the Company. Where relevant, this review covers compensation arrangements for executives, the Company’s superannuation arrangements, the requirements for an employee share and option plan, performance reviews, succession planning and the fees of non-executive Directors.
When addressing these areas, the non-interested Directors who carry out these functions have access to independent advice and comparative studies on the appropriateness of remuneration arrangements. Existing director remuneration levels are as set out in each Annual Report.
In the event of exploration success or expansion of the Company’s operations beyond those currently capable of being undertaken, the remuneration levels of Directors may increase; but not beyond the approved limit set from time to time by the Shareholders for directors’ fees. It should be noted that directors remuneration as fixed in general meeting does not include salary (and associated benefits, including superannuation) payable to executive Directors.
The functions of the Committee in relation to nominations are:
- to identify and recommend candidates to fill Board vacancies as and when they arise;
- before recommending an appointment, to evaluate the balance of skills, knowledge and experience on the Board and, in the light of that evaluation, to determine the role and capabilities required for the appointment;
- to make recommendations to the Board with respect to the:
(i) re-appointment of any non-executive Director at the conclusion of their specified term of office;
(ii) re-election by Shareholders of any Director under the retirement by rotation provisions in the Company’s constitution;
- to formulate succession plans for both non-executive and executive Directors, taking into account the expertise required on the Board in the future;
- to review the structure, size and composition of the Board; and
- to consider such other matters relating to Board nomination or succession issues as may be referred to it by the Board.
The Board of Directors adherence to the ASX Principles & Recommendations of Corporate Governance
Principle 1 - Lay Solid Foundations for Management and Oversight
The Board’s primary role is the stewardship of the shareholders’ funds with the objective of creating long term shareholder value. In fulfilling this role, the Board accepts overall responsibility for corporate governance. A board charter, which outlines the framework for its operation and of those functions delegated to the management, is outlined below.
The Company’s senior executives are currently two Executive Directors, the Company Secretary, the Chief Financial Officer (“CFO”) and a Consultant Geophysicist/Exploration Manager – relevant information on each individual is set out above Directors, Company Secretary and Management. Where necessary, the Company utilises contractors to provide expertise for technical, legal and administrative services. The performance evaluation of the relevant Director is undertaken together with the other members of the Board. This evaluation comprises a board performance appraisal and director self-assessments that are reviewed by the Chairman.
Principle 2 - Structure the Board to Add Value
Board Composition
The Board currently comprises three Directors. Two are executive directors (Mr Albers, Chairman and Chief Executive Officer (“CEO”) and Mr Willis) plus a non-executive director who is not independent (Mr Menzies).
The qualifications, skills, expertise, financial and industry experience and period in office of each Director are set out above Directors, Company Secretary and Management.
Executive activities undertaken by the executive directors include monitoring exploration progress, attending joint venture operator meetings, managing contractor services required by the Company and directing the corporate and administration functions. Government liaison and permit contract services are primarily carried out by Mr Albers and Mr Willis.
The Chairman administers the procedure for Directors to seek independent professional advice, at the Company’s expense, to assist them to fulfill their duties and obligations.
Independence
At the present stage of the Company’s development and given its current size and structure, the resources available to the Board to carry out the Company’s activities have been limited. As such, the Company does not have a majority of independent directors.
The Board determined that, where these are available, the specific skills of non-executive directors may be called upon from time to time to assist the Management. The Board has established a level of remuneration paid for those services as a materiality threshold to determine a Director’s non-executive status.
Role of the Chairman
Mr Albers is not an independent director. In the past, the Board has considered that his lack of independence and carrying out executive duties for the Company do not hinder the effective performance of his role as chairman and chief executive officer.
As a consequence of listing on ASX, the Company will seek to appoint two independent directors and in due course one of those appointees may become Managing Director.
Given the size of the Board and the scope of the Company’s activities, the Company does not have a separate nominations committee. The functions of such a committee are undertaken by the Board as a whole under the terms of a formal charter applicable to the operations of a Remuneration and Nominations Committee.
As noted in Principle 1, board performance appraisal and director self-assessment is undertaken annually.
Principle 3 - Promote Ethical and Responsible Decision-making
The Board has established a:
- code of ethics, setting out the standards of ethical behaviour required of directors and employees;
- share transaction policy, setting out the position of the Company on trading in the Company’s securities by directors and employees;
- board charter, outlining the responsibilities and activities of the board and individual directors within legal and regulatory requirements and the Company’s constitution; and
- committee charters, describing the terms of reference for the operation of each of an Audit and Compliance Committee and Remuneration and Nominations Committee.
Principle 4 - Safeguard Integrity in Financial Reporting
For each financial year, the CEO and CFO have formally recorded that the Company’s financial reports present a true and fair view of the Company’s financial condition and operational results and are in accordance with accounting standards.
Given the size of the Board and the scope of the Company’s activities, the Company does not have a separate audit committee. The functions of such a committee are undertaken by the Board as a whole under the terms of a formal charter applicable to the operations of an Audit and Compliance Committee. As noted above, because the Company has no independent directors, the composition of the audit committee does not comply with this 4th principle & recommendation in terms of composition.
The number of meetings of the audit committee held during each reporting period and the names of the attendees are set out in each Annual Report, within the Directors’ Report.
As required by the charter for the Audit and Compliance Committee, the Board annually reviews the performance and ongoing independence of the external Auditors. The need (or not) for rotation of the lead partner, or of the Auditors themselves, forms part of that annual review.
Principle 5 – Make Timely and Balanced Disclosure
The Board has established policies and procedures designed to ensure compliance with all applicable Listing Rule disclosure requirements (and consequently continuous disclosure requirements under the Corporations Act) such that:
- all investors have equal and timely access to material information concerning the Company, including its financial position, performance, ownership and governance; and
- Company announcements are factual and presented in a clear and balanced way.
The Chairman, a Director or the Company Secretary authorises all disclosures necessary to ensure compliance with all applicable Listing Rule disclosure requirements.
Principle 6 - Respect the Rights of Shareholders
The Board has established a policy for communicating with the Company’s shareholders by:
- sending the Annual Report to shareholders;
- placing all shareholder related information and Stock Exchange announcements promptly onto the website in an accessible manner;
- ensuring shareholder participation in meetings by use of the Council’s guidelines for meetings and notices; and
- encouraging shareholders at the annual general meeting to question both the Directors (about the Company’s governance and business) and the external Auditors (about the conduct of the audit and the content of the audit report).
Principle 7 - Recognise and Manage Risk
The Board is responsible for overseeing the effectiveness of risk management so as to:
- identify, assess, monitor and manage risk; and
- inform investors of the nature of, and material changes to, the Company’s risk profile.
The Company’s activities are currently centred on advancing its inherently high-in-risk exploration projects. Apart from geological risk, material business risks include financial, operational, environmental and technological risk - this is not an exhaustive list of risk faced by the Company. The Board considers the existing policies and procedures for risk oversight to be appropriate for the Company’s current stage of development.
At each major milestone of the Company’s projects, specific risk oversight and management policies are developed consistent with activities at that time. The Board categorises the various types of risks facing the Company by assessing their likelihood (as high, medium or low), gauging their consequences (as severe, significant or minor) and seeking to mitigate the related risk (by sharing risk with others (farmout or sale), raising of additional equity capital, employment of consultants, outsourcing, insurance or management process).
In relation to any financial reporting period, the Board receives formal assurance from the CEO and CFO that the declaration provided in accordance with section 295A of the Corporations Act 2001 is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks.
Principle 8 - Remunerate Fairly and Responsibly
Given the size of the Board and the scope of the Company’s activities, the Company does not have a separate remuneration committee. The functions of such a committee are undertaken by the Board as a whole under the terms of a formal charter applicable to the operations of a Remuneration and Nominations Committee.
The Board reviews the remuneration packages of Directors and Executive Officers on an annual basis.
The Company’s policy for determining the nature and amount of emoluments of the Directors, non-executive and executive, is as follows:
- fees for non-executive directors are based on the demands and responsibilities of their role. In determining fees, regard is had for similar fee structures paid to non-executive directors in peer group companies;
- the remuneration structure for executive directors is determined having regard to industry practice, market trends and company performance;
- performance related incentive payments are based on share price performance targets but may also become based partly on other performance criteria established from time to time; and
- there is no provision of retiring allowances for directors, except Mr Albers is entitled to retirement benefits under a retirement benefit agreement established in June 1996.
The audited Remuneration Report (that is included in each Annual Report) details all forms of remuneration provided to the Directors during the relevant reporting period.
Code of Ethics
The Company has in place a Code of Ethics (“Code”) which is the framework of standards under which the Directors, Officers and Employees of the Company are expected to conduct their professional lives. The Code is not intended to prescribe an exhaustive list of acceptable and non acceptable behaviour, rather it is intended to facilitate decisions that are consistent with the Company’s values, business goals and legal and policy obligations, thereby enhancing performance outcomes.
The Code is subject to annual review by the Board and is based around articles covering the areas of:
- Conflicts of interest;
- Gifts;
- Corporate opportunities;
- Confidentiality;
- Behaviour;
- Proper use of the Company’s assets and information;
- Compliance with laws and policies;
- Delegated authority;
- Additional director responsibilities;
- Information for the Board; and
- Reporting concerns.
Share Transaction Policy
The Company’s share transaction policy provides guidelines for designated officers in regard to trading of the Company’s securities. A designated officer conducting a trade is responsible and accountable for ensuring any trade they conduct complies with the law and this policy.
The share transaction policy covers:
- Who are designated officers;
- Trading windows;
- Trading black-outs;
- Trading at other times;
- Trading in financial products issued or created over the Company’s securities by third parties; and
- Trading in associated products which operate to limit the economic risk of security holdings in the Company.
Board Charter
The Company’s charter for its Board (“Charter”) provides that the directors are appointed by the shareholders and are (individually and collectively) responsible for the activities of the Company in accordance with legal and regulatory requirements and the Company’s Constitution.
It sets out that the primary role of the Board is to create shareholder wealth (with a long term bias) and, in that context, to have due regard to the interests of other stakeholders. The Board is to achieve this by:
- providing leadership of the Company through setting the Company's direction, strategies and financial objectives within a framework of prudent and effective controls which enable risk to be recognised, assessed and managed;
- ensuring the Company has effective processes and systems in place to enable the Board to plan strategically, review current strategy, consider alternative strategies, monitor corporate performance and capabilities and recognise and oversee the management of risk;
- setting, overseeing and maintaining the Company's values, corporate governance framework, compliance with regulatory and ethical standards and ensuring that these are adhered to in the interests of the Company's shareholders, employees, customers, suppliers and the communities in which it operates;
- safeguarding the reputation of the Company;
- ensuring there is an effective balance between the delegation of responsibility for the day-to-day operation and management to the CEO and the role of the Board in monitoring, guiding and providing oversight;
- ensuring that the necessary financial and human resources are in place for the Company to meet its objectives;
- ensuring that the performance of Management, and the Board itself, is regularly assessed and monitored;
- promoting a culture where transparent and timely information is shared between management and the Board and where there is opportunity to advance proposals, challenge views, assumptions and beliefs in an environment of trust, respect and openness;
- ensuring effective communication with shareholders; and
- appointing, terminating and reviewing the performance of the CEO.
The Charter also provides specific provisions and guidance to the Board in relation to:
- Composition of the Board;
- Selection of directors;
- Board committees and their makeup;
- Board authorities and accountabilities;
- Taking independent advice;
- Individual responsibilities;
- Conduct of Board meetings and record-keeping; and
- Review of Board and director performance.
The Board reviews the Charter at least once a year to ensure it remains consistent with the Board’s objectives and responsibilities.
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