Steamships, and its Board are
committed to observing the highest
standards of Corporate Governance
and ethics, and they expect these
standards from all employees. The
Company believes that the
maximisation of long-term returns
to shareholders is best achieved by
acting in a socially-responsible
manner which recognises the
interests of other community
stakeholders.
Steamships is committed to:
- providing high-quality products
and services to meet customers’
needs;
- maintaining high standards of
business ethics and corporate
governance;
- ensuring the safety and well-being
of employees, customers and
others with whom the Company
has contact; and
- protecting the environment from
harm.
Board of Directors
The Board of Directors has the
responsibility to set the strategic
direction of the Company, to review
the operational and financial
performance of the Group’s
activities, to monitor the
achievements of the Group against
its objectives, to review the
management of business risk and to
report to the shareholders.
The Board currently comprises four Non-Executive
Directors, plus five Directors who are executives of the
Company or Directors of other subsidiaries of the
ultimate Holding Company, John Swire & Sons Limited.
The Board seeks to maintain an appropriate blend of
qualifications, skills and experience commensurate with
the size and diverse activities of the Group.
The Board meets four times a year, and in 2005 the
attendance rate was 91%. In addition to this, Board
papers are circulated for approval, as required, at other
times.
The Board appoints the Managing
Director. All other directors, in
accordance with the Company’s
constitution, retire on a rotational
basis at least every three years.
Retiring directors may be eligible for
re-election by the shareholders at
the Company’s Annual General
Meeting. The Chairman, in
conjunction with all members of the
Board, has the responsibility for
overseeing the nomination of all
directors and for the review of the
Board’s membership.
The Australian Stock Exchange
(ASX) recommends that the
Chairman and a majority of the
Board, and all of the members of
the Audit Committee, should be
independent directors. This is not the case with
Steamships, where the Company currently has a
minority (five out of nine) of independent Directors and
three out of four independent Directors on the Audit
Committee. The Chairman of the Board is a
representative of the majority shareholder. The Directors
serving during the year, who have declared themselves
to be independent, are: W. A. Lawrence (also Chairman
of the Audit Committee), Sir Daniel Leahy (resigned on
16th May 2005), G. Aopi, Sir Michael Bromley and Mrs
Winifred Kamit (appointed 15th August 2005).
TThe Company currently has 97% of its shares held by
three major shareholders, one of which holds 72% of
the shares. Three of the Directors are non-executive
representatives of major shareholders. Other Directors
have been closely associated with the Company in
recent years. To disqualify existing Directors on the
grounds of lack of independence would deprive the
Company of valuable experience in the management of
its affairs. While recognising the force behind the ASX's
recommendations, the Board therefore feels that, in the
particular circumstances of Steamships, the
recommendations are not practicable, and would not
serve the interests of the Company or its shareholders.
Executive Management
Steamships focuses on the longterm
development and growth of
businesses where it can add value
through it industry-specific
expertise, its partnerships and its
knowledge of Papua New Guinea,
gained through its long history in
the country. In order to achieve
this, the Company combines the
efforts of dedicated management
teams in the individual business
units, supported by a small Head
Office team to provide services
such as strategic direction,
investment and performance review,
treasury, personnel management
and staff development.
The Company is committed to the
development of its citizen staff,
recognising that it is in their hands
Corporate Governance Statement
that the future of Papua New
Guinea rests. Although the
expertise and skills of expatriate
staff is still required, an active
programme of training and
development seeks to enable to
Company to promote citizens from
within and to build a strong, longterm
workforce for the future.
Audit Committee and Internal
Control
The Board has overall responsibility
for the systems of internal control,
and monitors their effectiveness.
A sound system of internal control
contributes to safeguarding the
shareholders’ investment and the
Group’s assets.
The Board is assisted in discharging
its responsibility by the Audit
Committee, which is composed of
two independent, non-executive
directors and a representative of
the major shareholder. It is chaired
by a non-executive director. The
Audit Committee recommends the
appointment and remuneration of
the external auditors, reviews the
Company’s financial statements and
the adequacy and effectiveness of
existing internal and external audit
arrangements. It also considers
management of the Group’s risks.
The findings and recommendations
of the Committee are reported to
the Board. The Committee meets
twice a year. The Audit Committee
does not have a formal charter.
Different divisions within the
Company have a number of internal
audit and monitoring functions,
dependent on need. These report
at a divisional level. In addition to
this, regular reviews of the monthly
accounts and balance sheets,
conducted by senior divisional and
head office management, seek to
ensure that internal control is
properly managed throughout the
Group. In the opinion of the
directors, this is the most efficient
and cost-effective means of
managing internal control, given the
diversity of the business and the
nature of the risks.
Remuneration Committee
A Committee comprising the Chairman, the Managing
Director and a Non-Executive Director meets annually to
determine the compensation of the Managing Director
and the senior executive staff, and nominations to the
Board.
Risk Management
The Company is committed to the
management of risks throughout its
operations to protect its employees,
the environment, and group assets,
earnings and reputation.
Certain risks occur in the normal
course of the Company’s business
and include foreign exchange and
interest rate risks. Exchange risks
are minimised by borrowing in
currencies other than kina only
when an equivalent cash flow is
received.
A computer-based risk management
database has been developed to
assist the Company’s Risk
Management Department to
monitor and enforce compliance
with the risk management
procedures and policies. Regular
reports on compliance are sent to
senior management.
An active, group-wide Occupational
Health and Safety committee,
chaired by a senior executive, meets
monthly to consider OH&S matters
and ensure that adequate training
and supervision are conducted.
The Company also uses other risk
management techniques, including
insurance, to reduce the financial
impact of any uncontrollable or
catastrophic losses.
Environmental and Social Responsibility
Steamships is committed to
conducting its business in a
sustainable manner. As a major,
diversified business group, the
Company is very conscious of the
potential impact of its activities on
the environment. The Company is
committed to ensuring its
businesses meet or exceed legal and
regulatory requirements for
environmental best practice
wherever it does business.
In line with the commitment and requirements of the
Swire Group, Steamships is implementing formal
systems actively to monitor the impact its businesses
have on the environment, and will report the results of
this. Over time, as data are accumulated, this
information will be used to implement policies which
will help to manage and reduce adverse effects on the
environment and encourage sustainability across the
Company's operations.
Community Relations
Steamships is aware of its preeminent
position in the community,
and seeks to play a full role as a
responsible corporate citizen. The
Company provides financial support
to a diverse range of community
programmes and encourages its
employees to become involved in
such programmes.
Independent External Advice
In exercising their duties as
directors, the Board, and individual
members of it, can seek
independent professional advice at
the Company’s expense. Requests
for the provision of such advice are
directed to the Chairman.
Shareholder Information
The Board seeks to inform
shareholders of major issues
affecting the Company by sending
comprehensive annual reports to
the shareholders, and through the
release of reports to the Port
Moresby Stock Exchange, the
Australian Stock Exchange and
appropriate media. These detail the
Company’s financial and operating
performance. At all times, the
Board ensures that the continuous
disclosure requirements of the Port
Moresby and Australian Stock
Exchanges are met.
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