Candidates for election are nominated by an industry Selection Committee comprising representatives from the two Group B members. In addition, Group A members are able to lodge nominations for Board positions. Newly elected Directors undergo an induction program relevant to their experience in which they are given a full briefing on the Company and its activities in order to familiarise the Director with the Company’s operations, strategy and issues. The induction program includes meetings with the Managing Director, senior management and the Company Secretary. BOARD MEETINGS The Board met 13 times during the year. Some Board meetings are held in regional areas to enable the Board to meet with local industry representatives and visit sites where Dairy Australia activities are being undertaken. Prior to Board meetings, management provides Directors with Board papers that are complete, accurate and sufficient to enable sound decision-making on issues under consideration at the meeting. In addition members of the Company’s Executive Leadership Team and other members of management present in person to the Board as required. BOARD PERFORMANCE Under the Board Charter, each year the Board conducts a review to evaluate its performance and identify areas for improvement. DELEGATION TO MANAGEMENT The Board has delegated to management responsibility for: o Strategy development and implementation; o Financial performance; and o Operational activities. While these matters have been delegated to management, the Board receives comprehensive management reports at each Board meeting together with specific reporting on any irregularities. The Company has in place a formal document setting out financial delegations to management and staff. BOARD COMMITTEES The Board has established two standing committees to assist the Board in discharging its responsibilities – the Audit and Risk Management Committee and the Human Resources Committee. Each committee has a formal charter setting out its role and responsibilities, copies of which are available on the Dairy Australia website. Committee members are appointed at the first Board meeting of each calendar year and are selected for the skills, experience and qualities they bring to the Committees. The Chair of each committee provides a verbal report of committee meetings at the next Board meeting. All committee minutes are tabled at Board meetings. AUDIT AND RISK MANAGEMENT COMMITTEE The role of the Audit and Risk Management Committee is to assist the Board in fulfilling its responsibilities for Dairy Australia’s accounts and external reporting. Its role also encompasses responsibilities for the oversight of the Dairy Structural Adjustment Fund (DSAF) financial statements. The committee’s terms of reference include: o Appropriate systems and financial policies to ensure a high standard of financial reporting; o Adequacy and effectiveness of internal controls; o Adequacy of risk management plans and compliance with applicable legal and other requirements; and o Review of audit plans and audit reports for both the external and internal audit. In 2006/07, the Audit and Risk Management Committee comprised three non-executive Directors. The Charter for the Audit and Risk Management Committee requires that all members of the committee are financially literate with at least one member having accounting or financial expertise and at least one member having a strong understanding of the industry in which the Company operates. The Audit and Risk Management Committee met five times during the year, including several meetings with the Company’s external and internal auditors. The Managing Director and Group Manager Corporate Services usually attend committee meetings, other than when, consistent with best practice, the committee meets with the auditors in the absence of management. The major items considered during 2006/07 were the finalisation of the 2006/07 financial statements for Dairy Australia and DSAF and reviews of internal audit reports, externally managed investments and financial and investment policies. HUMAN RESOURCES COMMITTEE The Human Resources Committee reviews and oversees Dairy Australia’s remuneration policies. The committee is responsible for: o Providing a review and oversight function for the Board on remuneration policies and information; o Independently reviewing human resources policies and information to ensure best practice corporate governance; o Independently reviewing policies and information to facilitate consistency with market practice; and o Assisting the Board to ensure that the Company complies with all regulatory and accounting requirements for disclosure of remuneration. The Human Resources Committee comprised three non-executive Directors in 2006/07. The committee met three times during the year and paid particular attention to ensuring that the Company’s reward strategy was appropriate and the management practices are aligned to it. Dairy Australia’s remuneration for Directors, management and staff is externally benchmarked against the general market data.
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