Viralytics is committed to implementing the highest possible standards of corporate governance. In determining what those high standards should involve, Viralytics has turned to the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (ASX Principles) and has a corporate governance framework that reflects those recommendations within the structure of the Company.
The Board of Viralytics has recently approved an updated series of policies and charters in line with the 30 June 2010 amendments to the ASX Principles. The Company’s policies and charters together form the basis of the Company’s governance framework.
Within this framework:
- the Board of Directors is accountable to shareholders for the performance of the Company;
- the Company’s goals to achieve milestones are set and promulgated;
- the risks of the business are identified and managed; and
- the Company’s established values and principles underpin the way in which it undertakes its operations.
The Company has in place an entrenched, well developed governance culture which has its foundations in the ethical values that the Board, management and staff bring to the Company and their commitment to positioning the Company as a leader in its field. In certain instances, due to the size and stage of development of Viralytics and its operations, it may not be practicable or necessary to implement the ASX Principles in their entirety. In these instances Viralytics has identified the areas of divergence.
Principles:
- Lay solid foundations for management and oversight
- Structure the board to add value
- Promote ethical and responsible decision-making
- Safeguard integrity in financial reporting
- Make timely and balanced disclosure
- Respect the rights of shareholders
- Recognise and manage risk
- Remunerate fairly and responsibly
Corporate Governance Policies and Board Charter:
- Board Charter
- Code of Conduct and Ethics Policy
- Continuous Disclosure Policy
- Risk Management Policy
- Shareholder Communications Policy
- Securities Trading Policy
Lay solid foundations for management and oversight
The Company has established the functions reserved to the Board and those delegated to senior executives.
The Board of Directors of Viralytics has the primary responsibility for guiding and monitoring the business and affairs of Viralytics including compliance with Viralytics’ corporate governance objectives and for setting the strategic direction of the Company. The Board Charter confirms this responsibility and sets out the roles and responsibilities of the Board and the functions reserved to the Board. The Board Charter is available on the Company’s website.
In carrying out its governance role, the main task of the Board is to oversee the performance of Viralytics. The Board is committed to Viralytics’ compliance with all of its contractual, statutory, ethical and any other legal obligations, including the requirements of any regulatory body.
It is the role of senior management to manage Viralytics in accordance with the direction and delegations of the Board and the responsibility of the Board to oversee the activities of management in carrying out these delegated duties.
The non-executive Directors annually assess the performance of the Managing Director and the Board as a whole undertake an annual assessment of the performance of all other senior executives. During the year the performance of the Managing Director and senior executives were assessed, areas for improvement were identified and strategies adopted to implement improvements.
Structure the board to add value
The Board is comprised of four Directors, including Bryan Dulhunty the Managing Director. Peter Molloy, Phillip Altman and the Chairman, Paul Hopper, are non-executive and considered independent by the Board. The Board considers that it is the approach and attitude of each non-executive Director which is critical in determining independence and this must be considered together with other relevant factors including those set out in the ASX Principles. The factors considered by the Board in assessing independence, including materiality thresholds, are included in the Board Charter which is available on the Company’s website.
Further details about the Directors, including their tenure, skills, experience and expertise relevant to the position of director are set out in the Directors’ Report.
The Chairman, Paul Hopper, is an independent Non-Executive Director and there is a clear division of responsibility between the Chairman and the Managing Director.
Due to the Board size and structure, the Company has not established Nomination, Remuneration or Audit Committees. The Directors believe performance of these sub-committees duties are more effectively dealt with by the Board at present.
The Board has considered and believes that there is currently an appropriate mix of skills, diversity and experience on the Board. As set out in the Board Charter, in selecting new directors, the Board will ensure that the candidate has the appropriate range of skills, experience, expertise and diversity that will best complement Board effectiveness. In addition, any candidate must confirm that they have the necessary time to devote to their Viralytics Board position.
The Board has recently undertaken a review assessing the performance of the Board as a whole. The Board’s performance was measured against both qualitative and quantitative indicators. The objective of this evaluation was to identify strengths and weaknesses and provide best practice corporate governance to Viralytics.
No individual performance reviews were undertaken during the period.
Individual Directors are entitled to obtain advice from independent external advisers in relation to any Board matter, at the expense of the Company, with the consent of the Chairman.
Promote ethical and responsible decision-making
Code of Conduct
To ensure that Viralytics maintains the highest standards of integrity, honesty and fairness in its dealings with all stakeholders, the Company has an established a formal Code of Conduct (Code). This Code acts as a guide for compliance with legal and other obligations to stakeholders. These stakeholders include customers, shareholders, employees, suppliers, business partners, the community and environment in which Viralytics operates.
All Viralytics employees (including Directors, employees, consultants, contactors, advisors and all other individuals that represent Viralytics) play an important role in establishing, maintaining and enhancing the reputation of Viralytics by ensuring high standards of ethics and behaviour are observed. Employees are required to comply with the Code, Viralytics policies and all applicable laws and report any genuine suspicions of non-compliance. A copy of this Code is available on the Company’s website.
Diversity
The Company had recently updated its suite of governance policies in light of the 30 June 2010 amendments to the ASX Principles. The Company has reflected its policy on diversity throughout the suite of documents, in particular in the Company’s Code of Conduct and Board Charter, not in a separate diversity policy.
The Board has not established measurable objectives for achieving gender diversity at present however the Board is committed to considering the issue of diversity at least annually. At present Viralytics has 17 employees (including consultants to the Company). Of these 11 are female. Of the four executive roles within the Company one is carried out by a female. There are currently no female board members.
Securities Trading Policy
Viralytics has a policy applying to all Directors, officers and employees of Viralytics relating to the prohibition against insider trading, and prescribes certain requirements for dealing in Viralytics’ securities. A copy of this Policy is available on the Company’s website.
Safeguard integrity in financial reporting
The Company has not established an audit committee as recommended by the ASX Principles as the Board believes that due to the small size of the Company this role is more effectively dealt with by the Board directly.
The Board discusses directly with the auditors, each half year and full year financial aspects of the Company.
Information about the procedure for the selection and appointment of the external auditor, and for the rotation of external audit engagement partners are set out on the Company’s website.
Make timely and balanced disclosure
The Company has established written policies and procedures designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior management level for that compliance, including a Continuous Disclosure Policy and a Shareholder Communications Policy. A copy of the policies, ASX announcements and other publications are available on the Company’s website.
Respect the rights of shareholders
As set out above the Company has a Continuous Disclosure Policy and a Shareholder Communications Policy to promote effective communication with shareholders and encourage their participation at general meetings. A copy of both policies is available on the Company’s website.
Recognise and manage risk
The Company has established a system of risk oversight and management and internal control. The basis of this system is the Company’s Risk Management Policy which formalises and communicates Viralytics’ approach to the management of risk. A copy of the Policy is available on the Company’s website.
The Board requires Management to design and implement the risk management and internal control system to manage the Company’s material business risks and report to the Board regarding the management of those risks. The Board has received a statement in writing from the Managing Director attesting to the effectiveness of the Company’s management of its material business risks.
The Board has received assurance from the Managing Director that the declaration provided in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects.
Remunerate fairly and responsibly
The Company has not established a remuneration committee as recommended by the ASX Principles. The Board believes that due to the current development stage and size of the Company these matters are best handled by the Board itself.
The Remuneration Report and further details about the remuneration policy of Viralytics are set out in the Directors’ Report. The Remuneration Report clearly distinguishes between the structure of Non-Executive Directors’ remuneration and that of executives.
The Company’s policy is to reward executives with a combination of fixed remuneration and equity incentives, structured to drive improvements in shareholder value.