Board of Directors

Principles behind corporate governance

The Board of Directors are elected by the Shareholder 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 of Directors is committed to maintaining best practice governance policies and behaviours. Policies are reviewed against applicable standards detailed in NZX’s Corporate Governance Best Practice Code. The Board’s governance framework adheres to the majority of applicable standards as if the Company were a listed public company.

While recognising that this Code expresses principles and does not purport to determine any detailed course of conduct, the Directors support the need for the highest standards of behaviour and accountability.

The Board and management are therefore committed to ensuring that the Company adheres to best practice governance principles and maintains the highest ethical standards. The Company’s Code of Ethics sets out the manner in which directors and employees should conduct themselves.

The Board recognise good governance is not merely a matter of achieving legislative compliance but ensuring that exemplary standards and behaviour are maintained. This involves the establishment and maintenance of a culture at board and senior management level and throughout the Company to ensure that the directors and employees deal fairly with others, with transparency and protects the interest of the Shareholder and looks after the rights of stakeholders.

Role of the board and management

The primary role of the Board is the protection and enhancement of shareholder value in Napier Port 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, and ensuring the Company has the appropriate controls and policies.

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

Board composition

The Company’s constitution governs the composition of the Board and states that there shall be no more than nine directors, nor fewer than six, and no member or employee of any Shareholder Local Authority may hold office as a director.

The Board currently comprises six non-executive directors, of which all are classified as independent. Alasdair MacLeod is the Chairman of the Board of Directors.

Conflict of interest

Where any Napier Port director has a conflict of interest or is otherwise interested in any transaction, that director is 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

Please refer to the Napier Port Annual Report 2018 for the full list of scheduled meetings attended by committee members and directors during the past financial year.

The Board of Directors has established three committees for Audit & Risk, Health & Safety and Remuneration. The Chairman appoints the chairs of these committees.

Audit & risk management committee

The Audit & Risk Management Committee operates under a charter, which requires it to assist the Board in fulfilling its responsibilities to discharge its financial reporting and regulatory responsibilities, ensure the ability and independence of the external auditor to carry out its statutory audit role is not impaired, ensure an effective internal audit and internal control system is maintained and ensure an appropriate framework is maintained for the management of strategic and operational risk. The Charter is approved by the Board and reviewed annually.

Remuneration committee

The Remuneration Committee operates under a charter, which requires it to assist the Board in fulfilling its responsibilities, to appoint, remunerate and evaluate the Chief Executive and review remuneration recommendations of the Chief Executive for senior executives and make recommendations on any incentive plan for the senior management group. The Charter is approved by the Board and reviewed periodically.

Health & safety committee

The Health & Safety Committee operates under a charter, requiring it to assist the Board in fulfilling its responsibilities in ensuring an appropriate framework is maintained for the management of the Company’s strategic and operational health and safety risks. The Charter is approved by the Board and reviewed periodically.

Board performance

The Board has included in its Charter, a requirement to conduct a biennial review of the Board, board committees and individual directors.

Risk management

The Board and Senior Management 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 periodically, on the effectiveness of the Company’s management of material risks. As part of risk management the Company also has a comprehensive treasury policy that sets out procedures to minimise financial market risk.

Code of ethics

Napier Port 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 and professional conduct expected by the company’s directors, senior management team and employees.

1. Introduction

In carrying out its responsibility and powers as set out in this Charter, the Board will at all times recognise its overriding responsibility to act honestly, fairly, diligently and in accordance with the law in serving the interests of Napier Port Limited’s shareholders, its employees, customers and the wider community. In carrying out its activities, the Board is committed to achieving high standards of corporate governance.

2. Role of the board

The Board is ultimately responsible for setting the strategic direction of the Company, oversight of the management of the Company and direction of its business strategy, with the ultimate aim being to increase shareholder value. The Board is accountable to shareholders for the performance of the Company.

Responsibilities of the board

In carrying out its principal function, the Board’s specific responsibilities include:

• providing, in consultation with the Chief Executive, strategic direction for, and approving, the Company’s business strategies and objectives;
• reviewing and approving the Company’s budgets and business plans and monitoring the management of the Company’s capital;
• providing leadership of the Company within a framework of prudent and effective controls which enables risk to be assessed and managed;
• identifying the principal risks faced by the Company and taking reasonable steps designed to ensure that appropriate internal controls and monitoring systems are in place to manage and, to the extent possible, reduce the impact of these risks;
• monitoring the operational and financial position and performance of the Company;
• ensuring appropriate Health & Safety policies are in place and to review management’s performance against those policies;
• requiring that financial and other reporting mechanisms are put in place by the Chief Executive which result in adequate, accurate and timely information being provided to the Board and the Company’s shareholders being fully informed of all material developments relating to the Company;
• appointing, and where appropriate, removing the Chief Executive, approving other key executive appointments that the Board may designate from time to time and monitoring the performance of the Chief Executive, having regard to the Company’s strategic direction and goals;
• reviewing and approving the Company’s remuneration policies;
• establishing procedures to ensure that financial results are appropriately and accurately reported on a timely basis in accordance with all legal and regulatory requirements;
• adopting appropriate procedures to ensure compliance with all laws, governmental regulations and accounting standards; · approving and regularly reviewing the Company’s internal decision-making and compliance policies and procedures, including any codes of conduct, this Board Charter and the charters of the Board’s Committees; and
• ensuring that the Company’s internal decision making and compliance policies and procedures are adhered to, to ensure that the business of the Company is conducted in an open and ethical manner.

3. Delegation of responsibilities to management

The Board delegates the day-to-day affairs and management responsibilities of the Company to the Chief Executive and Senior Executives to deliver the strategic direction and goals determined by the Board. This delegation includes:

• operating the Company’s business within the parameters set by the Board from time to time and, where a proposed transaction, commitment or arrangement exceeds these parameters, referring the matter to the Board for its consideration and approval;
• developing business plans, budgets and Company strategies for the Board’s consideration and, to the extent that they are approved by the Board, implementing these plans, budgets and strategies;
• identifying and managing business risks, and if those risks could materially affect the Company or its business, formulating strategies to manage those risks;
• develop and manage appropriate Company Health & Safety policies and provide timely reporting of Company performance to the Board;
• managing the Company’s current financial and other reporting mechanisms to ensure that they are functioning effectively to capture all relevant material information on a timely basis; and
• implementing the Company’s internal controls, policies and procedures and monitoring these controls, policies and procedures and ensuring that they are appropriate and effective.

4. Delegation of responsibilities to committees

The Board may, from time to time, establish committees to assist it in carrying out its responsibilities. For each committee, the Board shall adopt a formal charter that sets out the delegated functions and responsibilities for, and the composition and any administrative matters relating to, that committee. The Board currently has the following committees:

• Audit and Risk Management Committee;
• Remuneration Committee; and
• Health and Safety Committee

The Board is responsible for the oversight of its committees. This oversight shall include, in relation to each committee, determining and reviewing its composition and structure and regularly reviewing its performance against its charter.

5. Membership

The Constitution provides that the number of Directors must at any time be no more than nine and no less than six. Subject to these limitations, the number of Directors to hold office will be fixed from time to time by the Board. Directors will receive induction training upon appointment, and maintain appropriate levels of financial, legal and industry understanding, throughout their appointment. A majority of the Directors should be independent. A Director is only to be regarded as independent if they do not have any direct or indirect interest or relationship that could reasonably influence, in a material way, the Director’s decisions in relation to the Company. The Board shall regularly review the independence of each Director in light of interests disclosed.

Terms of appointment

• The appointment of a Director is a shareholder decision and for a term or subsequent terms of up to three years.
• The Board has determined that good governance requires regular renewal of the Board.

6. Chair

The Chair must be independent and is selected by the full Board.

The Chair carries out a leadership role in the conduct of the Board and its relations with shareholders and other stakeholders. He/she maintains a close professional relationship with the Chief Executive and the Senior Management Team. He/she chairs Board Meetings, as well as Annual Meetings of shareholders, and concerns themselves with the good order and effectiveness of the Board and its processes. The Chairman must ensure that all Directors are encouraged to participate in the affairs of the Board and have an adequate opportunity to express their views.

7. Meetings

The Board shall meet as often as it deems appropriate.

Board papers will be provided to Directors sufficiently prior to Board Meetings, to allow attendees to become familiar with the issues to be addressed. The Company shall ensure that Directors are receiving information of sufficient content, quality and timeliness as the Board considers necessary to enable the Board to effectively discharge its duties.

8. Review

The Board shall undertake a biennial performance evaluation of itself that:

• compares the performance of the Board with the requirements of this Charter;
• reviews the performance of the Board’s committees; and
• effect any improvements to this Charter deemed necessary or appropriate. The performance evaluation shall be conducted in such a manner as the Board deems appropriate.

Introduction and purpose

The Code of Ethics sets out the ethical and behavioural standards expected of Directors, Senior Management and employees of Napier Port.

The purpose of the Code of Ethics is to underpin and support Napier Port’s vision and values that govern our collective and individual behaviour. The vision and values of the Company are an integral part of Napier Port’s Code of Ethics.

The Code of Ethics is not an exhaustive list of unacceptable behaviour; rather it is intended to guide decisions so that they are consistent with Napier Port’s values, goals and legal obligations.

Vision and values

Our vision: To be Central New Zealand’s leading provider of port logistics services.

Our values: Do it once, do it safely, do it RIGHT
(RIGHT = Respect, Integrity, Going the Extra Mile, Honesty, Teamwork)

Compliance with laws and Napier Port’s policies

Directors and employees will familiarise themselves with Napier Port’s policies and are expected to comply with all relevant policies, procedures and frameworks at all times.

Directors and employees are expected to abide by the laws, rules and regulations of New Zealand. Directors and employees will comply with all statutory and disclosure requirements on a timely basis.

Conduct

The conduct of directors and employees, whether to customers, suppliers or competitors, can impact on the way external parties view Napier Port.

Directors are expected to set an example and to act in accordance with the highest standards of conduct. Acts of serious misconduct will result in dismissal.

Directors and employees are expected to conduct themselves in accordance with Napier Port’s values. Any acts of serious misconduct by employees could lead to disciplinary action including dismissal. Examples of misconduct that could result in dismissal are outlined in the Staff Handbook. The Handbook list is not exhaustive, and any other offence, which is not specifically covered by the list, but which is of similar nature, may be considered to be serious misconduct if the offence undermines the trust and confidence of the Company.

Directors and employees must not seek or accept any type of compensation, fee, commission or gifts which might compromise their integrity or which might place the Director or employee under a perceived or real obligation to a third party, now or in the future. If a director or employee is unsure or in any doubt as to the nature of the item (gift) he or she should seek clarification from the Chairman or Chief Executive as appropriate. Failure to disclose a perceived obligation to a third party could lead to disciplinary action.

Directors and employees may only act within the powers delegated to them and at all times in compliance with Napier Port’s Delegation of Authority Policy.

Directors and employees must fully co-operate with both internal and external auditors of Napier Port and must not mislead or conceal any relevant information from those auditors.

Conflicts of interest

A conflict of interest occurs when an individual’s interests interfere, or appear to interfere, with Napier Port’s interests. Napier Port expects its directors and employees to act in the best interests of Napier Port at all times.

Directors and employees must not use their position, or any Napier Port information, for personal benefit independent from Napier Port’s business, or to benefit any other business or person.

Other than with the prior consent of Napier Port, no director or employee will engage in or have a material direct or indirect interest in any business or undertaking that might be in competition with Napier Port, or impair or could be perceived to impair the independence of any judgement that may be made on behalf of Napier Port.

No director or employee will accept or make any bribe, gratuity or other inducements in the course of business dealings on behalf of Napier Port. This does not apply to complimentary items, entertainment and hospitality activities that are normal in an
ethical business context. None the less a gift register of these items is maintained and reviewed regularly (at least annually) by the Chairman.

Reporting concerns

Through its Whistleblowing Policy, Napier Port recognises the protections afforded employees under the Protected Disclosures Act 2000 and will support employees who, acting in good faith, report any serious wrongdoing. To the extent it is possible to do so, Napier Port will keep confidential the identity of the person making the report.

Napier Port’s employees becoming aware of a breach or suspected breach of this Code or of any law, regulation, Napier Port’s policy or any other serious wrongdoing, may report it to:

• Chief Financial Officer
• if not appropriate for any reason, to the Chief Executive, or
• if none of the above are appropriate for any reason, the Chairman or a director of the Company or the Company’s external auditors.

Proper use of Napier Port’s information

Directors and employees must not disclose any confidential information about Napier Port or in the possession of Napier Port to any person unless authorised by Napier Port to do so. Napier Port’s confidential information will generally not be disclosed to any person who is not a director or employee, unless that person has entered into a confidentiality agreement.

Directors and employees must not, without authority, directly or indirectly, state that they are representing Napier Port or its position in respect of any matter to media or to any external parties.

Directors and employees must not use Napier Port’s information for personal gain.

Proper use of Napier Port’s assets and property

Directors and employees are responsible for taking all prudent steps to ensure the protection of Napier Port and its customers’ assets and property, and to minimise the possibility of theft by any person. Directors and employees must ensure that Napier Port’s assets and property are used only for the purposes of Napier Port and in accordance with appropriate authorisations.

Review

The Code of Ethics is subject to annual review by the Board of Directors.

An experienced director, Alasdair joined the Napier Port board in April 2014 and took up the chairman’s role in December that year. Based in Hawke’s Bay, he has a keen interest in strategy and is passionate about growing businesses in our region. He chairs the Hawke’s Bay chapter of ExportNZ and was involved in authoring the Hawke’s Bay Regional Economic Development Strategy – Matariki.

Alasdair brings a range of experience across the energy, infrastructure, technology and primary sectors. Alongside his role as chairman of Napier Port, he is chair of Optimal Product Ltd, Hold Fast Investments Ltd and tech firm SilverStripe Ltd.

Wendie joined the Napier Port board in 2013, and has an extensive background in law, executive management and business consultancy.

Based in Hawke’s Bay, Wendie’s governance experience includes Hawke’s Bay Airport, Centralines Limited, QRS (Quality Road Services (Wairoa) Ltd) and ETCO (Electrical Training Company Ltd). Wendie also serves on the EIT Council and as Commissioner on the New Zealand Gambling Commission.

Diana joined the Napier Port board in 2017, and has a broad background in commercial, iwi and sports governance. She is a director of Ngāti Porou Holding Company and currently sits on the boards of the Tāmaki Redevelopment Company, Manawanui in Charge, New Zealand Olympic Committee and NZ Cricket.

Diana is of Ngāti Porou descent and is passionate about improving the lives of New Zealanders, iwi and the local communities in which we live. She has previously served as a director for Auckland Council Investments Ltd and the World Masters Games 2017. A Fellow Chartered Accountant, Diana was formerly the Chief Financial Officer of Ngāti Whātua Ōrākei Corporate.

Stephen Moir joined the Napier Port board in 2017. He brings an extensive background in institutional banking and financial markets, having held senior roles at Westpac Institutional Bank, Credit Suisse (Singapore), and Citibank (Singapore, Thailand and Australia).

Stephen is a director of The Guardians of the New Zealand Superannuation Fund, the Crown entity responsible for managing the New Zealand Super Fund’s global investment portfolio. He was previously a non-executive director on the BNZ board, and chaired both BNZ Life Insurance Ltd and BNZ Insurance Services Ltd, as well as the advisory board to the Victoria University Chair of Business in Asia.

Todd Dawson is Chief Executive of Napier Port, and was appointed to the board in an interim capacity in August 2018, following a director resignation. Todd is Chairman of Longburn Intermodal Freight Hub, which oversees the Manawatu Inland Port. He is also a director of Quanto Quanto Ltd.

Kristen Lie is Chief Financial Officer of Napier Port, and was appointed to the board in an interim capacity in November 2018, following a director resignation. Kristen is also a director of Longburn Intermodal Freight Hub, which oversees the Manawatu Inland Port.