Hawkley Oil and Gas : Corporate Governance Statement 2019

Recommendation

Conform Hawkley Oil and Gas Limited

Current Practice

1.1 A listed entity should disclose:

Yes

The functions reserved for the Board and delegated

a) the respective roles and

to senior executives have been established.

responsibilities of its board

The Board Charter is available at

and management; and

www.hawkleyoilandgas.com/display/index/profile-

b)

those matters expressly

corporatein the Corporate Governance Plan

reserved to the board and

document.

those delegated to

management..

1.2 A listed entity should:

Yes

The Board will ensure that prior to appointing a

a)

undertake appropriate

director or recommending a new candidate for

checks before appointing

election as a director that appropriate checks are

a person, or putting

undertaken as to the person's character, experience,

forward to security holders

education, criminal record and bankruptcy history.

a candidate for election,

Shareholders will be provided with all relevant

as a director; and

information in the Board's possession, relevant to a

b)

provide security holders

decision on whether or not to elect or re-elect a

with all material

Director.

information in its

1.3 A listed entity should have a written

No

The Company has decided to wait until the

agreement with each director and

appointment of a third director before finalising

senior executive setting out the

written agreements with each Director, setting out the

terms of their appointment

terms of their appointment.

1.4 The company secretary of a listed

Yes

The Company Secretary is accountable to the Board,

entity should be accountable

through the Chair, on all matters to do with the proper

directly to the board, through the

functioning of the Board.

chair, on all matters to do with the

proper functioning of the board.

1.5 A listed entity should:

No

While embracing the concept of diversity, the Board

(a) have a diversity policy

is of the view that at this time, it is inappropriate to

which includes

establish measurable diversity objectives or targets

requirements for the board

and to link diversity objectives to the Key

or a relevant committee of

Performance Indicators for the directors and senior

the board to set

executives.

measurable objectives for

The Diversity Policy is available at

achieving gender diversity

www.hawkleyoilandgas.com/display/index/profile-

and to assess annually

corporatein the Corporate Governance Plan

both the objectives and

document.

the entity's progress in

Currently the Company has 2 directors and a

achieving them;

company secretary, who are all male. There are no

(b) disclose that policy or a

other employees.

summary of it; and

1.6 A listed entity should:

Yes

The Board Performance Evaluation Practices are

(a) have and disclose a

available at

process for periodically

www.hawkleyoilandgas.com/display/index/profile-

evaluating the

corporatein the Corporate Governance Plan

performance of the board,

document.

its committees and

No formal appraisal was undertaken during the

individual directors; and

reporting period. Evaluation of the Board is currently

(b) disclose, in relation to

carried out on a continuing and informal basis. A

each reporting period,

formal process will be put in place when the Board

whether a performance

considers it is justified by the level of the Company's

evaluation was

operations.

undertaken in the

reporting period in

accordance with that

process.

1.7

A listed entity should:

Yes

The Performance Evaluation Practices for senior

(a) have and disclose a

executives is available at

process for periodically

www.hawkleyoilandgas.com/display/index/profile-

evaluating the

corporatein the Corporate Governance Plan

performance of its senior

document.

executives; and

During the year no formal appraisal of management

(b) disclose, in relation to

was undertaken with evaluation of management

each reporting period,

carried out on a continuing basis by the Chairman.

whether a performance

evaluation was

undertaken in the

reporting period in

accordance with that

process.

.

2

Structure the Board to add value.

2.1

The board of a listed entity should:

No

The Company considers that due to the size of the

(a) have a nomination

company the function of this committee is best

committee which has at

undertaken by the full board. The Board reviews its

least three members, a

composition annually, along with succession

majority of whom are

planning, in the context of changes in the

independent directors; be

development of the Company and the appropriate

chaired by an independent

skill set to discharge its duties and responsibilities

director, and disclose the

efficiently and effectively.

charter of the committee;

the members of the

committee; and as at the

end of each reporting

period, the number of

times the committee met

throughout the period and

the individual attendances

of the members at those

meetings; or

(b) if it does not have a

nomination committee,

disclose that fact and the

processes it employs to

address board succession

issues and to ensure that

the board has the

appropriate balance of

skills, knowledge,

experience, independence

and diversity to enable it

to discharge its duties and

responsibilities effectively.

2.2

A listed entity should have and

No

The Board is in the process of preparing a skills

disclose a board skills matrix

matrix for consideration in conjunction with its next

setting out the mix of skills and

review process.

diversity that the board currently

2.3

A listed entity should disclose:

Yes

The relevant disclosures recommended at 2.3 are

(a) the names of the directors

made both in the Directors' Report in the Annual

considered by the board to

Report and in the Corporate Governance Statement.

be independent directors;

(b) if a director has an

The Company currently has the following Board

interest, position,

members:

association or relationship

of the type described in

1.

Mr Thomas Fontaine

Box 2.3 (independence

Managing Director

guidelines) but the board

Appointed 21 June 2019.

is of the opinion that it

2.

Mr Murray Wylie

does not compromise the

Non-executive Director

independence of the

Appointed 29 November 2018.

director, the nature of the

interest, position,

The Board has assessed the independence status of

association or relationship

the directors with regard to the ASX Corporate

in question and an

Governance Council's discussion of independent

explanation of why the

status and has determined that neither Mr Fontaine

board is of that opinion;

nor Mr Wylie are considered to be independent

and

directors due to their management roles within the

(c) the length of service of

Company.

each director

2.4

A majority of the board of a listed

No

At 30 June 2019 the Board comprised 2 directors,

entity should be independent

neither of whom is considered independent.

directors

2.5

The chair of the board of a listed

No

The Company is currently seeking to appoint a non-

entity should be an independent

executive Chairman. The structure of the Board will

director and, in particular, should

be reviewed once a third director has been

not be the same person as the

appointed.

CEO of the entity.

2.6

A listed entity should have a

Yes

A new director is inducted into the Company's

program for inducting new directors

policies and processes upon engagement. The

and provide appropriate

Company does not have a formal program for

professional development

professional development of directors. Directors are

opportunities for directors to

expected to maintain and develop their skills and

develop and maintain the skills and

knowledge required to effectively perform their duties.

knowledge needed to perform their

The Board has determined that individual directors

role as directors effectively.

have the right in connection with their duties and

responsibilities to seek independent professional

advice at the Company's expense. The engagement

of an outside adviser is subject to prior approval of

the Chairman and this will not be unreasonably

withheld.

3

Act ethically and responsibly.

3.1

A listed entity should:

Yes

The Code of Conduct is available at

(a) have a code of conduct for

www.hawkleyoilandgas.com/display/index/profile-

its directors, senior

corporatein the Corporate Governance Plan

executives and

document.

employees; and

4

Safeguard integrity in corporate

reporting

4.1

The board of a listed entity should:

No

Due to the size of the Board, there is currently no

(a) have an audit committee

audit committee and the role of the audit committee

which:

has been assumed by the full Board.

(1) has at least three

The Audit Committee Charter previously adopted is

members, all of whom

available at

are non-executive

www.hawkleyoilandgas.com/display/index/profile-

directors and a majority

corporatein the Corporate Governance Plan

of whom are

document.

independent directors;

and

(2) is chaired by an

independent director,

who is not the chair of

the board,

and disclose:

(1) the charter of the

committee;

(2) the relevant

qualifications and

experience of the

members of the

committee; and

(3) in relation to each

reporting period, the

number of times the

committee met

throughout the period

and the individual

attendances of the

members at those

meetings; or

(b) if it does not have an audit

Yes

The Board is responsible for the initial appointment of

committee, disclose that

the external auditor and the appointment of a new

fact and the processes it

external auditor when any vacancy arises.

employs that

Candidates for the position of external auditor must

independently verify and

demonstrate independence from the Company

safeguard the integrity of

throughout the engagement period. The Board may

its corporate reporting,

otherwise select an external auditor based on criteria

including the processes

relevant to the Company's business and

for the appointment and

circumstance. The performance of the external

removal of the external

auditor is reviewed on an annual basis by the Board.

auditor and the rotation of

the audit engagement

partner..

4.2 The board of a listed entity should,

Yes

Before approving the full year and half-year financial

before it approves the entity's

statements the Board requires and receives an

financial statements for a financial

appropriate declaration from the CEO and the CFO

period, receive from its CEO and

(or those people fulfilling those roles).

CFO a declaration that, in their

opinion, the financial records of the

entity have been properly

maintained and that the financial

statements comply with the

appropriate accounting standards

and give a true and fair view of the

financial position and performance

of the entity and that the opinion

has been formed on the basis of a

sound system of risk management

4.3 A listed entity that has an AGM

Yes

The Company's external auditor is invited to and

should ensure that its external

attends the AGM. The auditor's presence is made

auditor attends its AGM and is

known to the shareholders during the meeting and

available to answer questions from

shareholders are provided with an opportunity to

security holders relevant to the

address questions to the auditor.

audit.

5.1

A listed entity should:

Yes

The Company has adopted a Continuous Disclosure

(a) have a written policy for

policy in order to ensure that it meets its obligations

complying with its

with respect to continuous disclosure. The policy is

continuous disclosure

available at

obligations under the

www.hawkleyoilandgas.com/display/index/profile-

Listing Rules; and

corporatein the Corporate Governance Plan

(b) disclose that policy or a

document.

summary of it.

6

Respect the rights of security

holders.

6.1

A listed entity should provide

Yes

Shareholders communication strategy is available at

information about itself and its

www.hawkleyoilandgas.com/display/index/profile-

governance to investors via its

corporatein the Corporate Governance Plan

website.

document.

6.2

A listed entity should design and

Yes

In addition to attending general meetings, electronic

implement an investor relations

communication with the Company by investors is

program to facilitate effective two-

encouraged via email to

way communication with investors.

information@hawkleyoilandgas.com.

6.3

A listed entity should disclose the

Yes

Shareholder Communication policy including

policies and processes it has in

encouraging attendance at shareholder meetings is

place to facilitate and encourage

available at

participation at meetings of security

www.hawkleyoilandgas.com/display/index/profile-

holders.

corporatein the Corporate Governance Plan

document.

6.4

A listed entity should give security

Yes

The Company encourages the use of electronic

holders the option to receive

means of communications with itself and with its

communications from, and send

share registry. Refer to the Company's website

communications to, the entity and

www.hawkleyoilandgas.com.

its security registry electronically.

7

Recognise and manage risk

7.1

The board of a listed entity should:

No

The Company considers that due to the size of the

(a) have a committee or

company the function of this committee is best

committees to oversee

undertaken by the full board. The Company has

risk, each of which:

established policies for the oversight and

(1) has at least three

management of material business risks.

members, a majority of

whom are independent

Risk management policy is available at

directors; and

www.hawkleyoilandgas.com/display/index/profile-

(2) is chaired by an

corporatein the Corporate Governance Plan

independent director,

document.

and disclose:

(3) the charter of the

number of times the

committee met

throughout the period

and the individual

attendances of the

members at those

meetings; or

(b) if it does not have a risk

Yes

committee or committees

that satisfy (a) above,

disclose that fact and the

processes it employs for

overseeing the entity's risk

management framework.

7.2 The board or a committee of the

Yes

The identification and review of operational and

board should:

strategic risks are reviewed on an informal and

(a) review the entity's risk

ongoing basis during regular Board and management

management framework

meetings.

at least annually to satisfy

itself that it continues to be

sound; and

(b) disclose, in relation to

each reporting period,

whether such a review has

taken place.

7.3 A listed entity should disclose:

(a) if it has an internal audit

No

The Company does not have an internal audit

function, how the function

function.

is structured and what role

it performs; or

(b) if it does not have an

Yes

The Board oversees risk management and reviews

internal audit function, that

the risk strategy as part of the audit process. The

fact and the processes it

Company has a sound system of internal controls

employs for evaluating

appropriate for an organisation of its size.

and continually improving

the effectiveness of its risk

management and internal

control processes.

7.4 A listed entity should disclose

Yes

The identification and effective management of risk,

whether it has any material

including calculated risk-taking, is considered an

exposure to economic,

essential part of the Company's approach to creating

environmental and social

long-term shareholder value. These include but are

sustainability risks and, if it does,

not limited to:

how it manages or intends to

∙ fluctuations in exchange rates;

manage those risks.

∙ ability to source suitable new projects;

∙ sovereign risk in the countries and regions of

operations;

∙ taxation, government regulations and the legal

systems in jurisdictions of operations;

∙ ability to obtain ongoing financing, and

∙ fluctuations in commodity prices and investment

markets.

These risks areas are provided to assist investors to

understand better the nature of the risks faced by our

Company and the industry in which it invests and

operates. They are not necessarily an exhaustive list.

8

Remunerate fairly and

responsibly

8.1

The board of a listed entity should:

No

Due to the size of the Board, there is currently no

(a) have a remuneration

remuneration committee and the role of the

committee which:

remuneration committee has been assumed by the

(1) has at least three

full Board.

members, a majority of

The Remuneration Committee Charter previously

whom are independent

adopted is available at

directors; and

www.hawkleyoilandgas.com/display/index/profile-

(2) is chaired by an

corporatein the Corporate Governance Plan

independent director,

document.

and disclose:

Relevant disclosures are included in the Directors'

(3) the charter of the

Report in the Annual Report.

committee;

8.2

A listed entity should

Yes

The Company separately discloses its policies and

separately disclose its

practices on remuneration in the Remuneration

policies and practices

section of its Directors' Report in the Annual Report

regarding the

and at

remuneration of non-

www.hawkleyoilandgas.com/display/index/profile-

executive directors and

corporatein the Corporate Governance Plan

the remuneration of

document.

executive directors and

other senior executives.

8.3 A listed entity which has an equity-

Yes

The Company's employee Incentive Options Plan

based remuneration scheme

and Performance Rights Plan do not specifically

should:

preclude entering into transactions which limit the

(a)

have a policy on whether

economic risk of participation. However, the

participants are permitted

Directors, at their discretion imposed such a

to enter into transactions

restriction. Consequently plan participants may not

(whether through the use

enter into any transaction designed to remove the 'at

of derivatives or

risk' aspect of an instrument before it vests. This

otherwise) which limit the

restriction is disclosed in the Remuneration Report

economic risk of

section of the Directors' Report in the Annual Report.