1. Introduction
1.1 The Board is responsible for the overall governance of Iota Services Pty Ltd (Iota). This Board Charter sets out the authority, accountabilities, roles and responsibilities, membership and operation of Iota. The Board is accountable to South East Water and presides over all significant strategic, commercial, regulatory, financial and risk focused elements of Iota.
1.2 In carrying out its responsibilities and exercising its powers, the Board recognises its overriding responsibility to:
• act honestly, fairly, diligently and in accordance with the law;
• serve the interests of the State of Victoria in pursuing the objectives of Iota and using the resources of that body economically, efficiently, effectively, with due propriety in accordance with statutory or other requirements that govern public sector bodies in Victoria; and
• ensure Iota does not trade while insolvent.
1.3 Through its continued oversight of South East Water, the Minister for Water will retain an indirect power to control the activities of Iota as a separate legal entity. As a wholly-owned subsidiary of South East Water, the company will be a public entity under the Public Administration Act 2004.
2. Constitution and heads of agreement
2.1 Iota’s constitution and heads of agreement (between Iota and South East Water) are Iota’s key governance documents and the Board is responsible for ensuring that Iota complies with the provisions of those governing documents.
3. Role and responsibilities of the Board
3.1 The Board is responsible to South East Water for Iota’s strategy, governance and performance of Iota functions including:
3.2 Strategic direction;
a. providing strategic direction and assisting management to develop and monitor strategic and performance objectives and ensuring that these take appropriate account of State Government policy (including the competitive neutrality policy, intellectual property strategy and policy); and
b. guiding the preparation of the business plan and obtaining approval of the plan from South East Water.
3.3 Financial performance, reporting and risk management;
a. providing oversight, and monitoring the financial performance of Iota and ensuring appropriate and accurate financial records are kept;
b. endorsing the key performance indicators for delivery of Iota’s strategy;
c. providing advice and oversight of performance indicators and targets and regularly (quarterly) reviewing Iota’s performance (including the financial position) against those targets;
d. monitoring development of performance indicators and targets and reviewing Iota’s performance against those targets;
e. providing accurate financial reports and other information to South East Water, the Minister for Water, the Treasurer and the Premier, as required by law;
f. endorsing, and where appropriate, approving regulatory and shareholder reports issued by Iota;
g. notifying South East Water if it believes anything has arisen that may prevent, or significantly affect, the achievement of Iota’s objectives or financial targets;
h. ensuring key risks are identified, assessed and appropriately managed through an appropriate risk management and compliance framework, including a regular review (at least annually) of the financial risk profile;
i. informing South East Water, and where required, the Minister for Water and the Treasurer, of any significant issues and events and in particular, emerging or existing risks and of the systems in place to address those risks;
j. ensuring all other information is provided to the government in an accurate and timely manner, as required under legislation or government policy; and
k. recommending dividend payments for payment to Iota’s sole shareholder, South East Water.
3.4 Governance and compliance;
a. ensuring that Iota has a governance framework to promote compliance with relevant laws, regulations and standards applying to the activities of Iota;
b. ensuring an effective internal control framework and an appropriate balance in the authority over finances so that no single person has unfettered power of the finances of Iota;
c. reviewing major capital expenditure and procurement practices of Iota to ensure that these comply with South East Water and government procurement policies;
d. ensuring that Iota acts in a responsible and ethical manner and that reasonable steps are taken to ensure compliance with South East Water’s code of conduct and other governance policies;
e. establishing performance measures for the General Manager Iota, undertaking an annual performance assessment and providing feedback on performance;
f. ensuring the General Manager Iota is undertaking effective succession planning for Iota; and
g. notifying South East Water, and where required, the Minister for any breach of the processes in place to deal with conflicts of interest by Directors.
4. Powers of the Board
4.1 The Delegations of Authority, sets out key matters reserved for the Board of Iota including:
a. approving the appointment and removal of the General Manager Iota and Company Secretary, in conjunction with the Board of South East Water;
b. approving capital expenditure up to the value of $5 million;
c. authorising cost overrun(s) of up to 10 percent on projects approved by the Board of Iota; and
d. approving various debtor amounts.
5. Board membership
5.1 The Board will comprise a majority of independent Directors. The composition of the Board will be determined by South East Water, consistent with good corporate governance and subject to Iota’s Constitution. South East Water will ensure that the Board has an appropriate blend of skills, experience and diversity to deal with the current and emerging issues of Iota.
5.2 An independent Director is a non-executive Director (that is, not a member of management) and:
a. within the last three years has not been employed in an executive capacity by South East Water or a related organisation, or has been a Director after ceasing to hold any such employment;
b. within the last three years has not been a principal of a material professional adviser or a material consultant to South East Water or a related organisation, or an employee materially associated with the service provider;
c. is not a material supplier or customer of South East Water or a related organisation or an officer or otherwise directly or indirectly associated with a material supplier or customer;
d. has no material contractual relationship with South East Water or a related organisation other than as a Director of South East Water;
e. has not served on the Board for such a period that his or her independence may have been compromised;
f. is free from any interest or business or other relationship which could, or could reasonably be perceived to, materially interfere with the Director’s ability to act in the best interests of Iota; and
g. there are no family ties or cross directorships that may compromise independence.
5.3 For the purpose of these provisions, “principal” does not include a non-executive Director and “material professional adviser” does not include a professional adviser providing less than 25% of professional advisory services of a same or similar nature to South East Water and its group members.
6. Meetings
6.1 The Board must ensure that procedures are in place for the conduct of effective Board meetings.
6.2 Meetings shall be formally structured and held in accordance with Iota’s Constitution.
6.3 The quorum for Board meetings is three Directors.
6.4 The Chair will ordinarily preside over a Board meeting. In their absence, a Director elected by those Directors present at the meeting will preside over the meeting.
6.5 The Directors will hold their meetings as frequently as required and will also meet whenever necessary to deal with urgent matters.
6.6 Executives will be invited for the relevant part of the meeting where they are scheduled to give presentations or where the Board considers it necessary to do so for the effective consideration of a particular agenda item.
6.7 The Board may invite external advisers to attend Board meetings where necessary or desirable.
6.8 The agenda for each meeting is prepared by the Chair, General Manager, Iota and Company Secretary. The agenda and papers are to be distributed to Directors five clear business days in advance of each scheduled meeting. Draft minutes of each meeting will be prepared promptly for review by the Chair.
7. Code of Conduct
7.1 South East Water’s Code of Conduct will be adopted by the Board of Iota. The Board is accountable for Iota’s actions and must take reasonable steps to ensure that it is being properly informed by the General Manager, Iota and other senior staff.
7.2 The Directors consider there are fundamental ethical values that underpin their role as Directors of Iota and as members of its Board. The Iota Board is also required to comply with the Code of Conduct for the Directors of Victorian Public Entities. These duties are outlined in the South East Water and Iota Services Pty Ltd Directors Handbook.
8. Roles and responsibilities of Chair, General Manager, Iota and Company Secretary
8.1 The Chair is appointed by the Board of South East Water and presides over the meetings of the Board.
8.2 The Chair is responsible for:
a. leadership of the Board;
b. efficient organisation and conduct of the Board’s functioning;
c. ensuring the briefing of all Directors on all matters relevant to their role and responsibilities and issues arising at Board meetings;
d. maintaining open communication between management and the Board; and
e. ensuring all Directors are given opportunities and encouraged to undertake professional development relevant to their roles.
8.3 The Chair has no additional powers or authority beyond that of other Directors in respect of decisions about the company’s business (other than a ‘casting vote’ as provided for in Iota’s Constitution).
8.4 The Chair must ensure the Board undertakes its duties to an appropriate standard and in accordance with the Code of Conduct and other governance requirements.
8.5 The General Manager, Iota is appointed by the Board of South East Water and Iota and has delegated the authority of day to day management of Iota subject to oversight of the Iota Board. The General Manager, Iota must consult with the Iota Board with respect to the matters specifically reserved to it, including in this Charter or decisions of a strategic nature. The General Manager, Iota has authority to sub-delegate. Specific limits on the authority delegated are set out in the Delegations of Authority approved by the Board.
8.6 The General Manager, Iota’s duties are to:
a. be accountable for planning, coordinating and directing the operations of Iota to achieve strategic, financial and operating objectives as agreed with the Board;
b. formulate and recommend business and financial strategies and plans to develop Iota’s business and to implement these plans to achieve agreed performance targets; and
c. faithfully, diligently and with care and skill perform the duties and exercise the powers assigned by the Board of South East Water.
8.7 In fulfilling his or her duties, the General Manager, Iota:
a. reports to the Board of Iota;
b. provides prompt and full information to the Board regarding the conduct of the business of Iota; and
c. complies with reasonable directions given by the Board and implements Board approved strategies and policies.
8.8 The Company Secretary is responsible to the Board, through the Chair, on all governance matters.
8.9 The Company Secretary will advise the Chair, the Board, and individual Directors on all matters of governance processes including:
a. assisting the Chair and the General Manager, Iota to schedule and set agendas for Board meetings;
b. attending Board meetings and preparing minutes of meeting and resolutions;
c. organising and facilitating the induction and professional development of Directors;
d. providing advice and assistance to the Board with respect to corporate governance matters;
e. keeping and updating a register of interests; and
f. coordinating the annual review of Board performance.
8.10 The Company Secretary’s advice and services is available to all Directors and they may retain independent governance advisory services at the request of the Board of Iota or South East Water.
9. Conflict of interest
9.1 The Board must ensure that processes are in place to deal with conflicts of interest in Directors that apply to both financial and non-financial interests. That process must:
a. require Directors to make a full disclosure of the conflict(s) of interest at meetings of the Board;
b. require that disclosure(s) to be recorded in the minutes of the Board meeting;
c. require the Board to determine whether the conflict of interest is material; and
d. enable the Board to require the Director who has a conflict of interest in a matter to be absent from the meeting while the Board is considering that matter or prohibiting the Director from taking part in any decision of the Board on that matter.
9.2 The Board must also ensure that there is a policy in place for Directors that prevents Directors from seeking or accepting, for themselves or others, gifts or benefits that could be reasonably perceived as influencing them.
9.3 The Company Secretary shall keep a register of interests and potential conflicts of interest and report to the Board as necessary.
9.4 Directors have a responsibility to keep this register up-to-date by advising the Company Secretary of any changed or new personal circumstance when it occurs.
10. Legal obligations of Directors
10.1 Directors are public officials who are required to comply with the public sector values of responsiveness, integrity, impartiality, accountability, respect, leadership and human rights. In accordance with Section 187 of the Corporations Act 2001, Iota’s Constitution expressly authorises Directors to act in the best interests of its parent entity, South East Water.
10.2 Directors must at all times act in accordance with legal and statutory requirements and properly discharge all their duties as Directors.
11. Board Committees
11.1 The Board may from time to time establish Committees to assist it in carrying out its responsibilities, and adopt Charters setting out matters relevant to the composition, responsibilities and administration of such Committees, and other matters that the Board may consider appropriate.
12. Relationship with management
12.1 Management will supply the Board with information in a form, timeframe, and quality that will enable the Board to discharge its duties effectively. Directors may request additional information at any time when they consider it appropriate.
12.2 The Board has unrestricted access to management, usually via the General Manager, Iota or Company Secretary.
12.3 The Chair is the principal source of non-executive advice to the General Manager, Iota between meetings. The General Manager, Iota should inform the Chair of any important and urgent matters that arise between Board meetings.
13. Access to information
13.1 A Director is to have right of access to the financial records of Iota at all reasonable times.
13.2 In order to properly fulfil their obligations, Directors have a right to sufficient information to enable them to properly discharge their duties.
13.3 In this respect, Directors should:
a. request such information as they require to fulfil their responsibilities as a Director of the company;
b. respect the need for confidentiality of such information, including, if necessary, viewing it in a confidential place at the offices of Iota; and
c. direct such requests for information through the Chair – who, in turn, shall advise the General Manager, Iota.
14. Directors’ and officers’ indemnity
14.1 The company will indemnify Directors from liabilities incurred by them in that role, if it is not in respect of a liability:
a. to Iota or a related entity;
b. for which the Director has been ordered to pay a pecuniary penalty or compensation under certain provisions of the Corporations Act 2001; or
c. that arose from a lack of good faith, as in gross negligence.
14.2 Indemnity for the Director’s liability for legal costs is also excluded if the costs are incurred in respect of a liability of the type detailed above, or in respect of criminal proceedings, if the person is found guilty.
15. Directors’ insurance
15.1 Iota will insure Directors against liabilities incurred in the performance of that role, other than for liabilities arising from willful breach of duty or for misuse of their position as Directors or of the company’s information. Insurance will be maintained for each member of the Board for at least seven years after they cease to hold office.
16. Independent professional advice
16.1 If the Board as a whole or a Director obtains independent professional advice, Iota will meet the reasonable costs of such advice, on the condition that prior approval for obtaining that advice was authorised by the Board of South East Water.
17. Performance
17.1 The Board will evaluate its performance on an annual basis.
18. Review of Charter
18.1 This Board Charter will be reviewed annually, or at a time agreed by the Board of South East Water.