Corporate Structure

Corporate Structure

Constitution Documents | Management Structure | Board of Directors

Enlarged view of the Corporate Structure

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PORT OF TAURANGA LIMITED CORPORATE GOVERNANCE STATEMENT

This statement gives readers an overview of the main corporate governance policies, practices and processes adopted or followed by the Board.

 CORPORATE GOVERNANCE STATEMENT

The Directors are elected by shareholders and are responsible for the corporate governance of the Company. Corporate governance describes how a company looks after the interests of its shareholders.

The Board and Management of Port of Tauranga are committed to ensuring that the Company adheres to best practice governance principles and maintains the highest ethical standards.

The Board is committed to high standards of corporate governance. The Company's corporate governance practices reflect and satisfy the following reports:

  • NZX - Appendix 16 Corporate Governance Best Practice Code.
  • Corporate Governance in New Zealand - Principles and Guidelines - A Handbook for Directors, Executive and Advisors by the Securities Commission, New Zealand.
  • ASX Corporate Governance Council Corporate Governance Principles and Recommendations, other than the following areas.

The Board has not set measurable objectives for achieving gender diversity. The Board considers that merit based appointments are the appropriate approach for selection of employees and Directors, and as such, has not set specific targets for gender diversity.

The Chairman of the Remuneration Committee is also Chairman of Quayside Securities Limited, our major shareholder, so therefore is not independent. The Board sees no conflict on the Remuneration Committee as the Chairman is qualified for the role and is independent for remuneration purposes.


ROLE OF THE BOARD AND MANAGEMENT

The primary role of the Board is the protection and enhancement of shareholder value while respecting the rights of other stakeholders. Good corporate governance is core to ensuring the creation, protection and enhancement of shareholder value.

The Board oversees the business and affairs of the Company, establishes the strategies and financial objectives with management and monitors the performance of management directly and through Board Committees, monitors compliance and risk management, ensuring the Company has the appropriate controls and policies.

The practices adopted by the Board are prescribed in the Board Charter, which sets out the protocols for operation of the Board, and in the Code of Ethics, which sets out the manner in which Directors and employees should conduct themselves.

The Board delegates the day-to-day affairs and responsibilities to the Chief Executive to deliver the strategic direction and goals determined by the Board.

With the approval of the Chairman, Directors are entitled to seek independent professional advice on any aspect of the Directors' duties, at the Company's expense.

The full content of the Company's corporate governance policies, practices and procedures can be found on the Company's website: www.port-tauranga.co.nz

The Board is committed to reviewing these policies regularly.


BOARD COMPOSITION

The constitution states that there shall be no more than nine Directors, nor less than six, and comprising of no more than two members or employees of the shareholding authority, who may hold office as Directors of the Company at the same time.

The Board currently comprises of eight non-executive Directors of which six are independent. The Chairman of the Board is John Parker. The biography of each Board Member, including each Directors' skills, experience, expertise, other directorships and the term held by each Director at the date of this Annual Report is set out in the Directors' section on page 5 of this Annual Report.

In accordance with the Company's constitution, one-third, or the number nearest to one-third of the Directors, retire by rotation at each meeting. The Directors to retire are those who have been longest in office since their last election. Directors retiring by rotation may, if eligible, stand for re-election. Newly appointed Directors must seek re-election at the first Annual Meeting of shareholders following their appointment.

The Board considers new Director nominations and succession planning for Directors.

The Board has access to executive management, and key executive managers are invited to attend and participate in appropriate sessions of Board meetings.


DIRECTOR INDEPENDENCE

The Board determines annually on a case-by-case basis, who in its view, are independent Directors.

The factors that the Company will take into account when assessing the independence of its Directors are outlined in our Board Charter and state that a Director will be deemed not to be independent if they:

  • are a substantial security holder of the Company, or an associated person of a substantial security holder (other than solely as a consequence of being a Director); or
  • have a relationship (other than in their capacity as a Director) with the Company or a substantial security holder of the Company (or one of their associated persons has such a relationship) and, by virtue of that relationship, that Director (or associated person) is likely to derive, in the current financial year of the Company, a substantial portion of their annual revenue during such financial year.

Equally, a Director will be independent if he/she is not a member of management and:

  • has not been employed in an executive capacity by the Company or any related company, or been a Director after ceasing to hold such employment, within the last three years; or
  • has not been a principal of a material professional adviser or a material consultant to the Company or a related company, or an employee materially associated with the service provided, within the last three years; or
  • is not a material supplier or customer of the Company or related company, or an officer of (or otherwise materially associated with) a material supplier or customer; or
  • has no material contractual relationship with the Company or a related company other than as a Director; or
  • has not served on the Board for a period which could, or could be reasonably perceived to, materially interfere with his/her ability to act in the best interests of the Company; or
  • is free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with his/her ability to act in the best interests of the Company.

The Board has set a 10% materiality threshold in line with NZX guidelines in determining independence. In addition to the quantitative case-by-case assessment is the qualitative assessment. Specifically, the Board will consider whether there are any factors or considerations which may mean that the Director's interest, business or relationship could, or could be reasonably perceived to, materially interfere with the Director's ability to act in the best interests of the Company.

The Board considers that David Pilkington's role as Director of ZESPRI Group and Ballance Agri-Nutrients Limited, two major customers of the Port, does not preclude him from being considered an independent director.

Mr Pilkington has no involvement in any matters regarding tariffs and has no ability to influence decisions on such matters. The Port of Tauranga is not a material supplier of services to ZESPRI or Ballance.

Mr Ellis is also a Director of Ballance Agri-Nutrients Limited and we also consider him to be independent.

Based on the above factors, John Cronin and Michael Smith are considered not to be independent, given their relationship with Quayside Securities Limited (holding over 54% of the shares in Port of Tauranga Limited).


CONFLICTS OF INTEREST

Where any Port of Tauranga Director has a conflict of interest or is otherwise interested in any transaction, that Director is generally required to disclose his or her conflict of interest to the Company, and thereafter will normally not be able to participate in the discussion, nor vote in relation to the relevant matter. The Company maintains a register of disclosed interests.


BOARD AND COMMITTEE MEETINGS

The following table outlines the number of meetings attended by Directors during the course of the 2013 financial year:

 BOARD COMMITTEES

  Full Board Audit Nomination Remuneration
 J S Parker

 8

 2

 1

 1

 A W Baylis

 8

 2

 1

 -

J M Cronin 

 8

 -

 1

 -

 K R Ellis*

 1

 -

 -

 -

 D A Pilkington

 7

 -

 1

 1

 M J Smith

 8

 2

 1

 1

 Sir Dryden Spring

 7

 1

 -

 -

 K Tempest

 8

 -

 -

 1

 Total Meetings held

 8

 2

 1

 1

*Appointed 31 May 2013.

The Board of Directors has established three Committees for audit, nomination and remuneration.


Audit Committee

The Audit Committee operates under a charter which requires it to assist the Board in fulfilling its responsibilities regarding management's accounting practices, policies and controls, relative to the Group's financial position, and to review and make appropriate inquiry into the audit of the Group's financial statements by external auditors. The Audit Committee operates under a charter approved by the Board and reviewed by external auditors each year.

Audit Committee:
A W Baylis, Chairman
J S Parker, Director
M J Smith, Director
Sir Dryden Spring, Director


Nomination Committee

The Nomination Committee operates under a charter which requires it to review the composition of the Board, to ensure that the Board has the appropriate mix of expertise and experience. When a vacancy exists, or where it is considered that the Board would benefit from the services of a new Director with particular skills, the Committee selects a panel of candidates with the appropriate expertise and experience. The most suitable candidate is then recommended for appointment. The Director must stand for re-election at the next general meeting of shareholders.

Nomination Committee:
J S Parker, Chairman
A W Baylis, Director
J M Cronin, Director
D A Pilkington, Director
M J Smith, Director


Remuneration Committee

The Remuneration Committee operates under a charter which requires it to determine and review remuneration for Directors, Chief Executive and senior executives, and ensure appropriate performance incentives are in place.

Remuneration Committee:
M J Smith, Chairman
J S Parker, Director
D A Pilkington, Director
K Tempest, Director


BOARD PERFORMANCE

The Board has included in its Charter, a requirement to conduct an annual review of the Board, Board Committees and individual Directors.


COMMUNICATION WITH SHAREHOLDERS

Port of Tauranga is committed to ensure that shareholders are informed of all major developments affecting the Group.

An Interim and Annual Report are published and posted onto the Company's website. All shareholders requesting a hard copy are sent one.

Announcements to NZX and media are also posted on the website, as are copies of presentations to analysts which are done in conjunction with the half and full year results announced.

Shareholders can receive all media announcements automatically by joining the mailing list on the Company's website.

Shareholders may raise matters for discussion at Annual Meetings.


CONTINUOUS DISCLOSURE

The Board has adopted the NZX Continuous Disclosure Rules to ensure all material matters are released to the financial markets in a clear and timely manner.

 

RISK MANAGEMENT

We are committed to managing risk to protect our people, the environment, financial business risks, company assets and our reputation.

The Company has a comprehensive risk management system in place which is used to identify and manage all business risks. The system identifies the key risks facing the Company and the status of initiatives employed to reduce them.

Management report to the Board annually, on the effectiveness of the Company's management of material risks.

The Chief Executive and Chief Financial Officer have confirmed in writing to the Audit Committee that the Company's financial statements are in accordance with the accounting standards.

As part of risk management the Port has a comprehensive Treasury Policy that sets out procedures to minimise financial market risk.


POLICIES

 

Code of Ethics

Port of Tauranga requires the highest standards of honesty and integrity from its Directors, Management and employees.

A Code of Ethics has been developed and approved by the Board which sets out the ethical and behavioural standards expected by the Company's Directors, Senior Management Team and employees.

The policy sets out the ethical and behavioural standards and professional conduct expected.


Insider Trading

The Board has approved an Insider Trading Policy that applies to all Directors, the Senior Management Team and anyone else notified by the Chief Financial Officer, from time to time, that has access to material information not available to the public.

Under the policy the above persons cannot trade Port of Tauranga shares, or advise or encourage others, to trade or hold Port of Tauranga shares, if they are in possession of material information that is not publicly available.

In addition, shares can only be traded in selected periods after the announcements of interim and annual results.

The Chief Financial Officer must approve all trading of Port of Tauranga shares prior to the trade occurring.

The NZX is advised of all trades of Port of Tauranga shares by Directors and the Senior Management Team.

 

Disclosure and Communication Policy

Port of Tauranga is committed to promoting investor confidence by ensuring all shareholders are provided information about the Company in compliance with NZX and ASX Listing Rules, such that:

  • all investors have equal and timely access to material information concerning the Company, including its financial situation, performance, ownership and governance; and
  • Company announcements are factual and comprehensive.


Diversity Policy

Port of Tauranga is committed to providing equal employment opportunities.

As at 30 June 2013, 18.3% of the Company were female employees. Female representation at senior management level was 20%. There were no female Board Members.

The Board has not set measurable objectives for achieving gender diversity. The Board considers that merit based appointments are the appropriate approach for selection of employees and Directors, and as such, has not set specific targets for gender diversity.

 


Code of Ethics

Protected Disclosures Act 2000 Whistleblowing Policy

Insider Trading Policy and Guidelines

Disclosure & Communication Policy 

Diversity Policy

Board Charter

Audit Committee Charter

Nomination Committee Charter

Remuneration Committee Charter

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