Board composition

In accordance with the constitution of the Company, the Board will consist of between four and 10 directors. The current Board has a broad range of diverse and complementary skills and experience, specifically a combination of scientific expertise, industry experience, clinical expertise and financial expertise. The Board has adopted a policy of ensuring an appropriate mix of executive and non-executive directors, with the Chairman to be elected by directors from among the non-executive directors.

The Chairman’s Committee assists the Board to review Board composition and nominations and makes recommendations to the Board on candidates for appointment as directors. In recommending potential new directors, and considering the re-election of incumbent directors, the Chairman’s Committee makes recommendations to the Board after carefully considering factors including the following:

  • competencies required to ensure that the Board is able to efficiently and effectively fulfil its responsibilities and duties;
  • the need to maintain an appropriate balance of skills, experience, expertise and diversity;
  • relevant regulatory and statutory requirements;
  • the results of reviews of Board performance; and
  • the overall mix of functional skills of the members of the Board.

One third of the Board of Directors (excluding the joint or single Chief Executive Officer) retire each year at the annual general meeting and may be re-elected. Directors appointed by the Board between annual general meetings are required by the constitution to retire at the next following annual general meeting, at which they may be re-elected.

In addition to six scheduled full meetings each year, other Board meetings may be held as required and if necessary on short notice. Directors have the right, in connection with their duties and responsibilities as directors, to seek independent professional advice at the Company’s expense in relation to the Company’s affairs, subject to prior written approval of the Chairman, which will not be unreasonably withheld. If the Chairman determines it to be appropriate, such advice will be made available to the other directors.

Under the Company’s constitution, the Company indemnifies its directors, to the extent permitted by law, against liabilities incurred by the directors in connection with the Company’s affairs to persons other than Genea Limited or its related bodies corporate.

Conflicts of interest

In accordance with the Corporations Act and the Company’s constitution, a director who has a material personal interest in a matter that relates to the affairs of the Company is required to declare the nature of the interest at a meeting of directors as soon as practicable after the relevant facts have come to the director’s knowledge. Where the Board believes that a significant conflict exists, the director concerned does not receive the relevant Board papers and is not present at the meeting, or segment of the meeting, at which the item is considered.

Non-executive directors’ compensation

It is the policy of the Board to maintain the remuneration of directors at levels that are consistent with market practice, having regard to the nature of their responsibilities and the size and business activities of the Company. From time to time the Board will seek independent advice on the directors’ appropriate remuneration. Non-executive directors are paid for their services in aggregate not more than the fixed sum last approved at a general meeting of members (shareholders). The directors determine the remuneration to be paid to each non-executive director within this aggregate limit, and in the absence of agreement the aggregate fixed sum is paid to them equally.

Ethical standards of corporate conduct

The Board endeavours to ensure that the directors, officers and employees of the Company act with integrity and observe the highest standards of behaviour and business ethics in relation to their corporate activities, and comply with the Genea Code of Conduct. Directors, officers and employees are expected:

  1. to comply with the law and the constitution of the Company;
  2. to adhere to recommendations made by the Company’s independent auditors, the Ethics Committee, and the Professional Advisory Board (PAB);
  3. to act only in the best interest of the Company and its shareholders taken as a whole;
  4. to disclose actual or potential conflicts of interest, including any additional direct or indirect commercial relationship with the Company or with the Company’s competitors;
  5. to be responsible and accountable for all their actions, and to act always with due skill, care and diligence;
  6. to observe the ethical values of fairness and honesty;
  7. to respect the dignity of others;
  8. at all times to respect the privacy and right to confidentiality of the Company’s patients, clients and customers; and
  9. not knowingly to conceal an error, whether clinical, scientific, clerical or administrative (the reciprocal duty of the Company being a policy not to disadvantage a member of the Company for the making of a mistake).

Diversity

On 15 August 2012, the Board approved the Genea Diversity Policy. The policy is designed to support and promote the principles of diversity in the workplace and the Board monitors the Company’s overall diversity strategy and policy.

Genea currently reports annually to the Workplace Gender Equality Agency on the policies and business practices Genea has in place for all staff and for women. These policies and business practices either target equal opportunity in the workplace or have resulted in a contribution to that outcome.

Genea is very proud of the gender diversity that exists within the Company. Women comprise 85 per cent of the total Genea workforce and occupy 72 per cent of senior and frontline management positions. Women currently hold three of the senior executive positions on the Genea Executive.

Genea has created a number of Board Committees to assist our Board of Directors to focus on particular topics, manage board workload, and provide opportunities to enable succession and board renewal.

To ensure that we have clarity around our Board Committees and the value they deliver to Genea, each committee operates under a charter that clearly defines the Board Committee's purpose, delegation of authority, reporting requirements and meeting protocols.

Chaired by the Chairman of the Board and consisting entirely of non-executive directors with the majority being independent, the role of the Chairman’s Committee is to assist the Board in fulfilling its responsibilities by reviewing and making recommendations to the Board in the following areas:
  • Remuneration
    • the Company’s remuneration, recruitment, retention and termination policies and procedures for senior executives;
    • senior executives’ remuneration and incentives;
    • superannuation arrangements;
    • the remuneration framework for directors; and
    • gender equity remuneration.
  • Nomination
    • the necessary and desirable competencies of directors;
    • review of board succession plans;
    • the development of a process for the evaluation of the performance of the board, its committees and directors; and
    • the appointment and re-election of directors.
The Chairman’s Committee thus assures the Board of the effectiveness, integrity and compliance of the Company’s remuneration policies and practices, ensures that the overall remuneration policy and approach fits the strategic goals of the Company, and assists the Board in appropriate executive management and Board succession planning.
Specifically, the Committee must consist of at least three non-executive directors with the majority being independent, confirmed annually by the Board, is chaired by the Chairman of the Board, has the power to appoint a secretary, and has the following duties and responsibilities:
  1. to make recommendations to the Board on the remuneration to be paid to a single or joint Chief Executive Officer, including any offers of equity;
  2. to make recommendations to the Board on the remuneration to be paid to the non-executive directors, including any retirement schemes;
  3. to review and approve the total annual remuneration paid to employees of the Company, including any equity offers;
  4. to review and monitor remuneration paid to direct reports to a single or joint Chief Executive Officer;
  5. to exercise all of the powers and discretion of the Board in relation to equity plans for directors, executives and other officers and employees;
  6. to review Board composition and nominations and make recommendations to the Board on candidates for appointment as directors;
  7. to review and make recommendations to the Board on the operation of the Board, including reviewing the performance of the current directors;
  8. to review reports on management succession planning for executive positions;
  9. to review human resource policies and practices for the Company; and
  10. each year, to review these terms of reference.
The Chairman’s Committee has in place processes to review and evaluate the performance of the Board, its Committees, individual directors and the Company’s senior executives. The process for conducting the Board’s performance review consists of the Chairman conducting individual interviews with each of the directors. In conjunction with those interviews, the directors complete a questionnaire and are able to make other comments or raise any issue that they have relating to the Board’s or a Board Committee’s operation. Where appropriate, feedback from senior executives may also be sought as part of the review process. Additionally, the Board, through the Chairman’s Committee, annually reviews the performance of a single or joint Chief Executive Officer.
In relation to the Company’s senior executives, a single or the joint Chief Executive Officers will evaluate, at least annually, the performance of those executives. Either a single or the joint Chief Executive Officers report to the Chairman’s Committee on the performance of senior executives in conjunction with the remuneration review process. The Committee must meet as often as the Chairman decides is needed to fulfil its duties. As well, the Chairman must call a meeting if asked to do so by the Board, by a single or joint Chief Executive Officer, or by any of the Committee’s members. A majority of members constitutes a quorum.

The Audit, Risk Management and Compliance Committee assists the Board in fulfilling its responsibilities relating to accounting and financial reporting practices, the management of business and operational risks, and the placement and monitoring of internal controls. Specifically, the Committee:

  1. oversees the integrity and quality of financial information presented to the Board;
  2. reviews the independence and appointment of the auditor;
  3. oversees the scope and the quality of the external audit;
  4. evaluates the need for and scope of internal audit processes, taking account of the Company’s risk profile;
  5. gains assurance that there are processes in place for appropriate management of identified risks;
  6. ensures that the management of identified risks is monitored through a number of activities including internal and external audits; and
  7. ensures compliance with statutory responsibilities and internal policies.

Correspondingly, the Committee has the following duties and responsibilities:

  1. to review the audit plan with the external auditors in advance;
  2. to determine that no management restrictions are being placed upon the external auditors by inter alia meeting alone with the auditor at least annually;
  3. to evaluate the overall effectiveness of the external audit;
  4. to evaluate the adequacy of the Company’s accounting control system by reviewing written reports from the external auditors and monitor the Board’s and management’s responses and actions to correct any noted deficiencies;
  5. to review management’s response to the external auditor’s letter prior to remittance of that response;
  6. to review all financial reports to be made public prior to their release;
  7. to review and consult on all significant accounting policy changes;
  8. to review the financial statements contained in the statutory accounts and annual report with either a single or joint Chief Executive Officer, the Chief Financial Officer and external auditors and recommend acceptance to the Board;
  9. to oversee the assessment of the risk profile for the Company, to understand the key risks affecting the financial, regulatory and operational exposures of Genea Limited;
  10. to review the risk management systems for the adequacy of systems to monitor and manage the key risks, by setting prudent limits, and requiring adequate and timely reporting processes;
  11. to review the effectiveness of the policies and procedures designed to minimise risk exposure;
  12. to plan internal audit practices and projects including communicating expectations, approving the scope, monitoring management’s response and assessing the effectiveness of the internal audit;
  13. to prepare a report to the Board summarising the work performed by the Committee to fully discharge its duties during the year;
  14. to review the existence and adequacy of the Company’s insurance policies and ensure they are sufficient to cover the nature and value of potential loss from insurable events;
  15. to review management of cash and other assets;
  16. to advise the Board on any regulatory compliance and reporting issues likely to affect the Company’s financial performance, operation or service; and
  17. each year, to review these the terms of reference.

Composition of the committee

The Committee must have at least three members and:

  • each member must be a non-executive director;
  • the majority of members must be independent directors; and
  • the Committee must be chaired by an Independent Chair who is not Chair of the Board.

Further, in accordance with the ASX Corporate Governance Principles and Recommendations (2010), the Committee includes one member who is a qualified accountant and members who are all financially literate and some members who have an understanding of the industry in which the Company operates.

The Board confirms membership of the Committee annually and appoints one of the members to chair the Committee.

The Committee has unfettered access to the external auditors and to senior management of the Company, and may seek external advice and outsource projects where it deems this necessary. The Committee has adopted an Audit Independence Policy which addresses the selection and appointment of the external auditor, the rotation of external audit engagement partners and policies to ensure audit independence.

The Committee holds at least three meetings per year and such additional meetings as the Chair shall decide in order to fulfil its duties. In addition, the Chair calls a meeting of the Committee if required to do so by any Committee member, a single or joint Chief Executive Officer, the Board, or the external auditors. If a Committee member cannot attend a meeting, he or she may appoint an alternate for such a meeting. The alternate must be a non-executive member of the Board. A quorum consists of a majority of Committee members, and the executive provides secretarial assistance to the Committee. All directors of the Company who have not formally been appointed by the Board to the Committee have the right to attend Committee meetings. All directors of the Company are provided with copies of the agenda papers and minutes of the meetings in the same manner and at the same time as members of the Committee.

Risk management

The Company has a comprehensive system of risk management and oversight, administered by the Chief Risk Officer who reports to each meeting of the Audit, Risk Management and Compliance Committee on the effectiveness of the Company’s management of its material business risks. The risk management system includes extensive policies addressing the identification, control and management of material risks, including management of appropriate insurances.

In addition to our Board Committees, Genea has constituted a number of Advisory Committees. At Genea these Advisory Committees provide ethical and professional guidance to the Board and Management. Each Advisory Committee operates under a charter that outlines its purpose, delegation of authority, reporting requirements and meeting protocols. These Advisory Committees form part of the overall governance structure of Genea.

Genea maintains an Ethics Committee composed predominantly of men and women who are independent of the Company and who are eminent in the community. The Committee will:

Scope of responsibilities

  1. provide independent ethical review of research involving humans conducted by the Company, as required by the National Statement on Ethical Conduct in Human Research (National Statement), including by reviewing protocols and progress reports on such research. The Committee may establish procedures for the review of low risk research in accordance with the National Statement;
  2. not generally provide ethical approval or monitoring of research by researchers not affiliated with the Company;
  3. in addition to review of research involving humans, the committee may be asked to review from an ethical and community perspective matters of ethical concern to the Company;
  4. pay special attention to the processes of consent and agreement by which members of the public are treated or have tests performed at or by the Company;
  5. establish, implement and document working procedures to promote good ethical review;

Membership and meetings

  1. comprise a chair and members in at least such number and categories as is required by the National Health and Medical Research Council (NHMRC) to fulfil all functions 
  2. meet at least four times each year, and (at the discretion of the Committee’s Chairman) as requested by members of either the Committee or the executive;
  3. for at least a part of each meeting, consider matters in the absence of executives of the Company;

Accountability and reporting

  1. report annually or otherwise as required to the NHMRC and its committees on the conduct of its business, and provide a copy of that report to the Board;
  2. maintain its independence of the Company’s operations (including by the open disclosure by members to the Chairman of the Committee of any personal or commercial matter that could cause a conflict or an appearance of a conflict with the independent operation of the Committee);
  3. maintain a direct link with the Chairman’s Committee of the Board, including the holding of at least one joint meeting each year of which a part will be conducted in the absence of executives of the Company;
  4. directly, and without any necessary reference to the executive members of the Company, inform the independent directors of any substantial or unresolved concern the Committee may have in relation to any aspect of the Company’s conduct of its business;

Remuneration

  1. not charge fees for the provision of ethical review of the research and other activities of the Company; and
  2. make public, in the Company’s annual report each year, the remuneration paid to the members of the Committee.

Principal committee functions

The Science and Research Commercialisation Committee is an advisory committee to the Genea Board. The Committee’s purpose is to inform the Board and to assist the Chief Executive Officer to create strategies, systems, processes and procedures that will advance Genea as a science-based business. Specifically, the Committee will ensure that:

  1. the scientific, research and development paths set by Genea Biomedx and Genea Biocells are those that best match the Company’s business strategy;
  2. the Company’s research and development strategy is that which makes best use of the opportunities for the Company’s business model in the Australian and international market place; and
  3. the Company monitors the ongoing scientific and commercial viability of R&D projects on hand and ensures that the maximum commercial value is extracted from them.

Committee membership

The membership of the Committee will include at least four members:

  1. a Genea non-executive director to chair the Committee;
  2. an external non-executive member to monitor and advise on scientific activities;
  3. an external non-executive member to monitor and advise on commercialisation activities; and
  4. the Chief Executive Officer.

Committee responsibilities in practice

To assist Genea management to establish strategies, systems, processes and procedures that enable management and the Committee:

  1. to ensure that commercial returns are maximised on current and future R&D programs and IP assets;
  2. to identify unique Genea inventions to be protected by patent;
  3. to enable the commercial opportunities that should guide the future R&D programs, product development requirements and IP acquisitions to be identified and evaluated; and
  4. periodically to conduct reviews to identify and evaluate areas of potential commercial opportunity for Genea.

Committee reporting and accountability

The Committee reports to the Genea Board after each of the Committee’s meetings, by way of:

  1. a brief, memo-style “Actions Arising” report; and
  2. a verbal report from the Committee Chairman to a single or joint Chief Executive Officer.

Ethics and governance

The Committee:

  1. is subject to Genea’s corporate governance rules as they apply to other Board Committees and to the Board itself, both in the way the Committee operates within its character and in how it deals with conflicts of interest; and
  2. ensures that the Ethics Committee is advised of new R&D projects that are initiated or approved.

Work program and meetings

The Committee will conduct a number of formal meetings each year. These meetings are supplemented by meetings and teleconferences between individual members and management as required. Meetings are convened at the discretion of the Committee Chair.

Remuneration and tenure

The Genea Board will determine the remuneration of non-employee members of the Committee. 

The Chair of the Committee will be remunerated in accordance with the directors’ fees payable for a chairman of a Board Committee. Non-Board, non-executive members will be paid quarterly in arrears on submission of an invoice for a quarter of the agreed annual fee as determined by the Board. 

Alternatively, members may elect to receive shares in lieu of cash remuneration (net of any applicable income tax) under the same conditions as those which apply to directors of the Company. Membership of the Committee is made by annual appointment and is subject to review by the Board each year between the end of the financial year and the annual general meeting.

Operational framework

To achieve its objectives, the Committee may, through the Chief Executive Officer:

  1. work closely with one or more key executives of Genea Biomedx and Genea Biocells; and
  2. request assistance from other business divisions within the Company.

Operational responsibilities

Together, the Chair of the Committee and the Chief Executive Officer develop formal reporting requirements and procedures for:

  1. monitoring current R&D projects of the Genea Biomedx and Genea Biocells divisions;
  2. evaluating proposals for new products and services; and
  3. keeping abreast of the R&D of others.

These written requirements and procedures are identified as annexures to the Committee’s charter, will be kept up-to-date by the Committee and modifications will be provided to the Board at its next meeting as part of the divisional report.

The Professional Advisory Board meets each year and otherwise as required. Its chair is Professor Mark Bowman.

The Professional Advisory Board’s most obvious and regular function is to accredit specialist doctors to practise at Genea. Other functions include setting and maintaining professional standards.

In practice, the Professional Advisory Board will not act contrary to advice provided by the Ethics Committee but otherwise has the discretion to set treatment policies for approval by the Board of Directors that, together with laws and externally developed regulations, define Genea's clinical boundaries.