Corporate governance statement 2017
Meat & Livestock Australia’s Role
Meat & Livestock Australia Limited (MLA) is the declared industry marketing body and the industry research body under sections 60(1) and 60(2) of the Australian Meat and Live-stock Industry Act (AMLI Act).
In its services role MLA strives to be the recognised leader in delivering world class research, development and marketing outcomes that benefit Australian red meat and livestock industry.
Working in collaboration with the Australian Government and wider red meat industry, MLA's mission is to invest in research, development and marketing initiatives that contribute to producer profitability, sustainability and global competitiveness.
MLA is a producer-owned, not-for-profit organisation and not an industry representative body.
MLA’s Corporate Governance
MLA’s corporate governance framework is set by the Board having regard to the best interests of our members, the values of our organisation MLA’s obligations set out under our Statutory Funding Agreement with the Commonwealth of Australia (Deed), and in accordance with the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (3rd edition). This long established framework has been implemented to ensure that we remain accountable to our stakeholders and that stakeholder interests are protected. MLA's governance arrangements are reviewed regularly to reflect industry developments, stakeholder expectations and regulatory and legislative changes. This statement and documents and policies relevant to our corporate governance framework are also available on our website.
The MLA Board’s 10 directors combine a broad range of skills, experience and expertise to work with industry to set strategic priorities for the company and to approve and monitor progress against MLA’s Strategic Plan 2016–2020. It evaluates performance and budgets, overseas risk management and compliance and ensures the company abides by its obligations under the Red Meat Industry Memorandum of Understanding, the Funding Agreement, and under corporations law. Many Directors are also producers and members of the company.
Please click here to read more about our Board of Directors.
The Managing Director is the only executive director and appointed by the Board. Otherwise Directors are nominated through the Selection Committee and appointed by members at MLA AGMs for a three year term under After such term a which time a director may reapply for a position on the Board in the same way as other candidates. Further information about the Selection Committee is below. The Chair of the Board was elected in 2011 and is an independent director.
Board roles and responsibilities
The roles and responsibilities of the Board are formalised in the Board charter which underpins the conduct of the Board as it strives to build sustainable value for MLA’s members and the red meat industry and to achieve MLA’s mission. The Board Charter is regularly reviewed by the Board. The Constitution and the Board Charter are available on MLA’s website.
The Board is responsible for the appointment and assessment of the performance of the Managing Director and monitoring the performance of the Leadership Team against agreed KPIs. The Managing Director’s role is to lead MLA and together with the Leadership Team develops and implements MLA’s business strategy once approved by the Board.
There were two Board committees that met during the year:
- Audit and Risk Committee
- Remuneration Committee
These Board committees are comprised solely of non-executive directors, with management attending committee meetings by invitation only. The Chair of each committee provides a verbal update of each committee meeting to the Board and minutes of Committee meetings are provided in the Board papers.
The role of each committee is set out in the committee charters, which are regularly reviewed. The members of each committee, together with each member’s attendance at meetings are set out in the Director’s report on page 76 of the Annual Report.
Audit and Risk Committee
The Audit and Risk Committee oversees MLA’s risk program and has oversight responsibility of the company’s financial reporting, internal control structure, risk management and the internal and external audit functions. In keeping with community expectations, the chair of the committee is not the Chair of the Board.
The Audit and Risk Committee is required to meet at least three times a year and holds closed sessions with the external auditor at least once each year. The Audit and Risk Committee is responsible for making recommendations to the Board for the approval of the annual audit plan and annual financial statements.
As at 30 June 2017, the Audit and Risk Committee consisted of Alan Beckett (Chair), Steven Chaur and Allister Watson. Details of each members’ attendance at meetings is set out in the Director’s report on page 76 of the Annual Report.
Our external auditor is Ernst & Young (EY). The Committee holds discussions with the external auditors and management before the annual financial statements are submitted to the Board. The Audit and Risk Committee oversees our relationship with EY, including:
- making recommendations to the Board about the appointment of MLA’s auditors based on their qualifications, independence, engagement, fees and performance;
- reviewing and assessing the performance, independence and objectivity of EY; and
- reviewing EY’s proposed annual audit scope and audit approach, including materiality levels.
The Audit and Risk Committee reviews the adequacy and effectiveness of internal controls, including the company’s policies and procedures, to assess, monitor and manage business risk and legal and ethical compliance programs. This review includes monitoring the implementation of MLA’s Risk management plan, Fraud control plan and Intellectual Property plan. It also reviews the company’s foreign exchange and treasury management and oversees the company’s risk management program.
To assist its function the Audit and Risk Committee, with Management and a dedicated Risk & Assurance Manager works with internal auditor Deloitte Touche Tomatsu (Deloitte). Deloitte’s role during 2016-17 was to conduct a review of MLA’s Insurance program, WHS, Payroll and Accounts payable (including credit cards) in accordance with its annual work program. Deloitte’s audit activities assists management with independent and objective assurance on the effectiveness of our governance, risk management and internal control processes.
The Remuneration Committee consisted of Steven Chaur (Chair) Michele Allan, Erin Gorter and Chris Mirams as at 30 June 2017.
The Remuneration Committee oversees remuneration practices across the company. The Committee commissioned a broad review of Board remuneration in 2016-17 to have director remuneration benchmarked against like organisations. As part of an annual work program the Committee also reviews the policies and systems in place for managing remuneration for the rest of the company to ensure they are appropriate and consistent with company objectives and values.
The responsibilities of the Remuneration Committee include the review of:
- Remuneration matters, including:
- Establishing and monitoring KPIs, a remuneration framework for, and the performance of, the Managing Director
- Remuneration and incentive framework for senior executives and all staff
- Recruitment, remuneration and retention strategies
- Succession plans for senior executives and key staff
- Strategic HR policies and practices
Details of each members’ attendance at meetings is set out in the Director’s report on page 76 of the Annual Report.
The Selection Committee assesses candidates against a range of criteria, including experience and skills, personal qualities and their available time commitment. In accordance with good governance practice, appropriate checks of each candidate are undertaken before each nominee is put forward to members as a candidate for election, as a director. The composition of the Selection Committee, together with each member’s attendance at meetings is set out in the Directors’ report on page 76 of the Annual Report.
The Board had 8 scheduled meetings during 2016-17. The agendas for each of the MLA Group of companies are formulated in preparation for each meeting and also incorporate items from annual agendas to ensure regular review of key aspects of the business of the MLA Group. The agenda items include regular reviews of MLA’s financial position and management reports, a detailed review of the company’s strategic imperatives and marketing and R&D programs. The annual agenda also sets key review dates for items that must come before the Board under the categories of performance, compliance and governance.
The Board continually strives to ensure its meetings are conducted efficiently to enable sufficient discussion and contribution from all directors. The Board regularly considers and discusses key strategic issues at both a company group and industry level. Management attends and presents information relevant to their portfolios and to respond to issues arising in Board meetings.
The Board considers each director’s independence on an annual basis. Directors are considered to be independent if they are not a member of management and are free of any business or other relationship that materially interferes with – or could reasonably be perceived to materially interfere with – the independent exercise of their judgement. In assessing a director’s independence, materiality is considered on a case-by-case basis by reference to each director’s circumstances. A Policy on the independence of directors, which requires that the Board assess independence annually, or more regularly if a director’s circumstances change, is currently implemented and in force. The Board has determined that all of the non-executive directors are independent.
Conflicts of interest
In accordance with the requirements of the Corporations Act and MLA’s Conflict of interest policy and procedures, Directors must declare any conflict of interest they may have, and must follow the procedures set out in our Policy. In certain circumstances, Directors will abstain from participating in any discussion or voting on matters in which they have a material personal interest. At the time of their appointment and as notified from time to time each director provides to the Board information about their business and other interests. The Board records such notifications in its minutes and maintains a register in accordance with the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (3rd edition) and in compliance with the requirements of MLA’s Funding Agreement with the Commonwealth dated 13 October 2016.
The 2016 Independent Performance Review undertaken by ACIL Allen Consulting recognised MLA is a mature company which acts in the best interests of the red meat industry and through its strong, organisational and governance structure delivers on its goals. Following this positive review MLA and the Commonwealth of Australia through its Department of Agriculture and Water Resources agreed to a new Funding Agreement for the period 2016-2020. This came into effect from 14 October 2016 (Funding Agreement). The Funding Agreement sets out the requirements for the company’s expenditure of levy funds and matching funds and provides a framework under which the company must report to the Department.
The Audit and Risk Committee has received a written declaration from the Managing Director and Chief Financial Officer that the financial reports represent a true and fair view, in all material respects, of the company’s financial condition and operating results and are in accordance with relevant accounting standards.
Code of business conduct and ethics
The Board endorsed the revised Code of business conduct and ethics (the code), which embodies the company’s values of customer centricity, accountability through transparency and outcomes that make a difference. It otherwise sets out principles which must be met to ensure the company and its business associates meet its commitments to all stakeholders.
A copy of the code is provided to all new employees on commencement and is a feature of the formal induction training which is provided to new employees.
As part of an annual program of training and capability building within MLA, training in EEO and Anti-Discrimination, Risk Management and Intellectual Property Management, Performance training sessions on competencies and capabilities was provided to all staff. Additionally an external training platform has been implemented and is available to all staff on-demand for a wide range of courses.
Since April 2011, the Board has implemented a company-wide Diversity policy. MLA also recognises the importance of gender diversity in senior leadership and leadership roles as well as to focus on other areas of diversity such as age, ethnicity and disability and further work in the area of flexibility for care givers.
As at 30 June 2017, 54% of MLA’s staff were women. On the Leadership team, 5 of the 10 (50%) executives are female and during the period on the MLA Board of 9 non-executive directors, two are female, with one being the Chair of the Board.
The composition of MLA Group’s workforce has also been recognised by the Workplace Gender Equality Agency as being compliant with the Workplace Gender Equality Act 2012.
Remuneration and performance arrangements
The total limit for directors’ remuneration (excluding the Managing Director) is $750,000. This limit was determined by members at the 2008 annual general meeting. In October 2016 an external review of non-executive director remuneration was undertaken by AON Hewitt. Following this review the Board determined in December 2016 that an increase in directors’ fees would take effect from 1 January 2017. The increase reflects the time and effort that will be required as a result of MLA Board assuming non-executive director positions for all MLA subsidiaries and in recognition of the additional workload on the Committee Chairs. The total per annum cost for non-executive Directors is $653,850.
The remuneration arrangements for each member of the Leadership Team, including the Managing Director, comprise both fixed and performance based remuneration.
The remuneration packages for the MLA Leadership Team are reviewed each year and include several gateways before eligibility to the performance based component to ensure the remuneration structure aligns management effort with organisational objectives and attracts, retains and motivates quality management personnel.
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