Governance framework, structure, systems and compliance
ReShopMe Groups commitment to acting responsibly plays a critical role in our success as a business, and our ability to generate shareholder value. ReShopMe takes a unified approach to corporate governance to comply with the regulatory obligations associated with its two principal areas of operation. In compiling the Annual Report, the directors have referred to the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (3rd edition) (the ASX Principles), and the FMA Corporate Governance Handbook Principles and Guidelines 2018. ReShopMe Group’s commitment to integrity is set out in our global code of business conduct 'The Way We Operate'. This contains principles and standards of conduct which reaffirm the Group’s commitment to integrity. It is inspired by our four core values: respect, integrity, teamwork and accountability. It is available on the website. It is supported by ReShopMe Group’s extensive framework of policies and standards. Core policies are adopted after wide consultation, externally and within the Group. Once adopted, they are communicated to business units, together with related standards, guidance notes and resources to support implementation. Business unit management are required to devote the necessary effort to implement and report on these policies and standards. ReShopMe policies and standards include policies on a variety of important topics. They apply to all ReShopMe managed businesses. Where the Group does not have operating responsibility for a business, ReShopMe Group’s policies and standards are communicated to its business partners and they are encouraged to adopt similar policies of their own. ReShopMe employees are required to undertake training about the requirements of The way we work and other core policies. Further details including AntiTrust Standards, Anti-Corruption Standards, Communities Standards, CulturalHeritage Management Guidance, Risk Management, Health and safety, Human Rights and Employment Policies of the Group are all detailed in 'The way we operate' and associated Guides, Notes, Policies, Standards and Statements; ReShopMe Group Corporate Responsibility and Sustainable Development. Maintaining sound corporate governance and high ethical standards is as important to us as running our operations to the best of our ability. We manage our business with openness and accountability. To succeed in becoming the marketplace developer of choice, we have to be equipped to manage complex stakeholder relationships, and we actively engage with a wide range of external groups in order to promote leading business practices. Ensuring, the sustainable development of marketplace based ventures in New Zealand by encouraging good corporate practices and the active involvement of the local communities to develop our social license to operate is our priority.
Board governance
The ReShopMe Group have a common board of directors. The board is responsible for the success of the Group and, through the independent oversight of management, is accountable to shareholders for the performance of the business. The principal role of the board is to set the Group's strategy and to regularly review its strategic direction. In doing this, the board also has responsibility for corporate governance. A formal schedule of matters reserved by the board has been established by the directors. This covers areas such as the Group's strategy, major investments and acquisitions and divestments, and oversight of risk. The board is ultimately accountable to ReShopMe Group’s shareholders for the performance of the business. Responsibility for day-to-day management of the business is delegated to the Chief Executive and the Executive Committee. In turn, authorities are also delegated to individual members of the Executive Committee. The names, skills and experience of each director together with their terms in office are shown in our Corporate Directory. ReShopMe has a diverse board. It comprises directors drawn from a wide range of professional backgrounds and geographic areas. On behalf of the board, the chairman leads the development of the Group's diversity and inclusion strategy. The board supports the principle of diversity and inclusion and the implementation of this strategy. The board seeks to continually evolve its membership by seeking non-executive directors with diverse and complementary skills and perspectives, as well as experience which reflects the geographical spread of the Group’s operations. The board regularly reviews its corporate governance practices, including how the director selection and appointment process takes into account the board's desired mix of skills and diversity. The Nominations Committee, chaired by the chairman of ReShopMe, reviews succession plans aimed at maintaining a mix of skills, knowledge, experience and diversity on the board and the Executive Committee. This review takes into account the challenges and opportunities facing the Group, and includes evaluating the balance of skills, knowledge, experience and diversity currently on the board and Executive Committee. This evaluation helps to identify the necessary and desired profile of potential candidates for appointment to board and Executive Committee roles. In consultation with professional search firms and based upon the agreed profile for potential candidates, the Nominations Committee oversees the recruitment process for new directors. This includes formally assessing shortlisted candidates who are identified as being suitable for the role in question, as well as the final selection process. The Committee requires that any search firm engaged to help the board identify candidates must commit to providing at least one credible and suitably experienced female candidate for each director vacancy. Proposals for the appointment of any new director are submitted to the full board for approval. Non-executive directors are generally expected to serve on the board for at least three years and may seek re-appointment with shareholder approval provided the Nominations Committee concludes they remain independent in accordance with the requirements set out below.
Director independence
The tests of independence of a non-executive director vary between the jurisdictions where ReShopMe has listings. The Nominations Committee has adopted a formal policy for the determination of the independence of the non-executive directors. Among the key criteria of the independence policy are independence from management and the absence of any business relationship which could materially interfere with the director’s independence of judgment and ability to provide a strong, valuable contribution to the board’s deliberations, or which could interfere with the director’s ability to act in the best interests of the Group. Where, in the ordinary course of business, contracts exist between ReShopMe and a company in which a director has declared an interest, these are reviewed for materiality to both the Group, and the other party to the contract. Executives may be invited to become non-executive directors of other companies. It is ReShopMe Group’s policy that such appointments can broaden the executive’s experience and knowledge, to the benefit of the Group. Where there is no likelihood that such an appointment will give rise to a conflict of interest, the board will normally provide consent to the appointment. The executive is typically permitted to retain any fees earned. The chief executive and chief financial officer do not hold any non-executive director positions at other companies.
Board performance evaluation
Every year, an exercise takes place to evaluate the effectiveness of the board, board committees and individual directors. The chairman's performance is evaluated by the non-executive directors, led by the senior independent director, with input from the executive directors. The chief executive undertakes a performance evaluation of the Executive Committee. The chairman is responsible for the assessment of each individual director’s performance and contribution.
Remuneration for non-executive directors
It is ReShopMe Group’s policy that the chairman should be remunerated on a competitive basis and at a level which reflects his contribution to the Group, as assessed by the board. The Remuneration Committee determines the terms of service, including remuneration, of the chairman. Fees paid to non-executive directors reflect their respective duties and responsibilities and the time required to be spent by them so as to make a meaningful and effective contribution to the affairs of ReShopMe. Non-executive directors' fees and other terms are set by the board upon the recommendation of the Chairman’s Committee. Non-executive directors receive a fixed annual fee. This comprises a base fee and allowances for attending meetings which involve medium or long-distance air travel. The fees payable to non-executive directors are subject to review by the board on the recommendation of the Chairman's Committee.
Shareholding policy for directors
The Group recognises the importance of aligning executives' interests with those of shareholders and they are therefore expected to build up and maintain a meaningful shareholding in ReShopMe shares. The chief executive is expected to reach a share ownership equivalent in value to four times his base salary over five years. The chief financial officer and all other members of the Executive Committee are expected to reach a share ownership equivalent in value to three times their base salary over five years. The board recommends that non-executive directors be encouraged to build up a shareholding within three years of their appointment equal in value to one year's base fee.
Board governance process
The board has regular discussions with senior management on the Group's strategy. These discussions typically include presentations from senior management during the year. Directors receive timely, regular and appropriate information to enable them to fulfil their duties. They also have direct access to the advice and services of the ReShopMe company secretary. The directors are also able to obtain independent professional advice at the Group's expense.
Board committees
The objective of the Audit Committee is to assist the board to monitor decisions and processes designed to ensure the integrity of financial reporting, sound systems of internal control and risk management. The committee is responsible for financial reporting; internal controls, including internal controls over financial reporting; Internal audit and assurance; external auditors (appointment and relationship); the effectiveness of the risk management framework; and the integrity and compliance programme. In carrying out its responsibilities the Committee has full authority to investigate all matters that fall within its terms of reference. Accordingly, the Committee may: obtain independent professional advice in satisfying its duties at the Group’s expense; and have the direct access to the resources of the Group as it may reasonably require, including the external and internal auditors. The Nominations Committee is responsible, on behalf of the board, for regularly assessing the balance of executive and non-executive directors and the composition of the board; in terms of the diversity and capacity required to oversee the delivery of ReShopMe strategy. The Committee develops and agrees the desired profiles of potential candidates for board membership. It oversees the recruitment process and engages external search consultants to manage searches on its behalf, including constructing shortlists comprising candidates from diverse backgrounds. Following a final review of shortlisted candidates, the Committee makes recommendations for new board members to the board for approval. On behalf of the board, the Committee also reviews proposals for appointments to the Executive Committee and monitors executive succession planning. The Sustainability Committee assists the board with overseeing strategies designed to manage social and environmental risks, overseeing management processes and standards and achieving compliance with social and environmental responsibilities and commitments. The Committee reviews the effectiveness of management policies and procedures relating to safety, health, employment practices, relationships with neighbouring communities, environment, human rights, land access, political involvement and sustainable development. The Remuneration Committee assists the board with fulfilling its oversight responsibility to shareholders. In particular, the Committee seeks to spend compensation resource fairly and responsibly to ensure that remuneration policy and practices are properly linked to corporate and individual performance and to the delivery of the Group’s strategy. The Chairman's Committee acts on behalf of the board between scheduled board meetings. It supports the functioning of the board and ensures that the business of the board and its committees is properly planned and aligned with management. When mandated by the board, the Chairman's Committee will consider urgent matters between board meetings, and deal with the implementation of board decisions on transactions and other corporate matters. Other than for the chairman of the board, the Committee performs the annual review of non-executive directors' fees and makes a recommendation to the board, as appropriate.
Risk management and financial reporting
The directors are required to prepare financial statements for each financial period which give a true and fair view of the state of affairs of the Group at the end of the financial period and of the profit or loss and cash flows for that period. In addition, the Governance Code requires that the board provides a fair, balanced and understandable assessment of the Company’s position and prospects in its external reporting. The directors are responsible for maintaining proper accounting records, in accordance with the New Zealand and Australian legislation. They have a general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities. The Group maintains disclosure controls and procedures. Management, with the participation of the chief executive and chief financial officer, evaluate the effectiveness of the design and operation of the Group's disclosure controls and procedures as of the end of each financial reporting period. ReShopMe is exposed to a variety of risks that can have financial, operational and compliance impacts on our business performance, reputation and licence to operate.The board recognises that creating shareholder returns is the reward for taking and accepting risk. The effective management of risk is therefore critical to supporting the delivery of the Group’s strategic objectives. The Group’s approach to risk management, underpinned by the ReShopMe Group Risk Policy, is aimed at embedding a risk-aware culture in all decision-making, and a commitment to managing risk in a proactive and effective manner. This includes the early identification and evaluation of risks, the management and mitigation of risks before they materialise, and dealing with them effectively in the event they do materialise. Accountability for risk management is clear throughout the Group and is a key performance area of line managers. To support risk understanding and management at all levels, the Group Risk function provides the necessary infrastructure to support the management and reporting of material risks within the Group, and escalates key issues through the management team and ultimately to the board where appropriate. Group Risk also supports the Risk Management Committee (an executive management committee chaired by the chief executive) in its review of risk. The process for identifying, evaluating and managing the material business risks is designed to manage, rather than eliminate, risk and where appropriate accept risk to generate returns. Certain risks, for example natural disasters, cannot be managed using internal controls. Such major risks are transferred to third parties in the international insurance markets, to the extent considered appropriate or possible.
Shareholder communication
ReShopMe recognises the importance of effective, timely communication with shareholders and the wider investment community. To ensure that trading in its securities takes place in an informed marketplace, ReShopMe has adopted procedures to ensure compliance with its continuous disclosure obligations. The Disclosure Committee is responsible for determining whether information relating to ReShopMe may require disclosure to the markets under the continuous disclosure requirements in the jurisdictions in which ReShopMe is listed. The specific focus of the Disclosure Committee is to consider and determine on a timely basis whether information would, to the extent that the information is not public and relates directly or indirectly to ReShopMe, be likely to have a material impact on the price of ReShopMe Securities if that information were generally available. The members of the Committee are the chief executive, chief financial officer, and the Group company secretary. ReShopMe makes immediate disclosure (unless an exemption applies allowing a delay) to the relevant listing authorities in accordance with their rules of any information that a reasonable person would expect to have a material effect on its share price. All information released to the markets is posted on the website.
Annual general meetings
The annual general meetings present an opportunity to provide a summary business presentation, to inform shareholders of recent developments and to give them the opportunity to ask questions. Generally, the chairs of all board committees will be available to answer questions raised by shareholders and all directors are expected to attend where possible. ReShopMe Group’s external auditors, attend the annual general meetings and are available to answer questions about the conduct of the external audit and the preparation and content of the independent auditors' report. Any questions received and answers provided ahead of the annual general meetings are made available to shareholders, who also have the opportunity to meet informally with directors after the meetings.
Investor relations
The main channels of communication with the investment community are through the chairman, chief executive and chief financial officer, who have regular meetings with the Companies' major shareholders. The senior independent director, other board committee chairs, and non-executive directors are also available on request. The senior independent director has a specific responsibility to be available to shareholders who have concerns, and where contact with the chairman, chief executive or chief financial officer has failed to resolve their concerns, or for whom such contact is inappropriate. In his capacity as Remuneration Committee chairman, the senior independent director meets shareholders to discuss remuneration issues. Over the last financial year, these meetings with the investment community focused on the issues of strategy, board succession, corporate governance, executive remuneration, and the operational and financial performance of the Group. Regular investor seminars provide a two-way communication opportunity with investors and analysts. Feedback from such engagement is routinely communicated to the board.
