The Board of Directors of CogState Limited is responsible for the corporate governance of the Company. The Board guides and monitors the business and affairs of CogState Limited on behalf of the shareholders by whom they are elected and to whom they are accountable.
The Corporate Governance Statement has been structured with reference to the Australian Stock Exchange Corporate Governance Council's "Principles of Good Corporate Governance and Best Practice Recommendations".
In accordance with this document, the Corporate Governance of CogState Limited is based on the following 10 principles:
1. Lay solid foundations for management and oversight
2. Structure the Board to add value
Structure of the Board
The Cogstate Board of Directors has collective skills and expertise in the corporate sector, including biotechnology and medical device companies, as well as medical practice and research. The Board meets 10 times a year.
The primary criterion in the appointment of potential members to the Board is suitability to discharge their responsibilities effectively and so contribute toward success of the company. The question of independence is the second consideration.
The Directors are deemed to be independent when they are free from any business or other relationship that could potentially influence their judgement. According to this broad definition, the Board includes three independent members. The three other directors are not deemed to be independent either because of their executive position in the company or because of their substantial shareholding in the company.
Procedures agreed to by the board enable directors to seek independent professional advice at the company's expense, should it be necessary for the effective performance of their duties.
Audit & compliance committee
In discharging its responsibility to ensure that an effective internal control framework exists within CogState, the Board has established an Audit and Compliance Committee and approved a charter that sets out the committee's operation. The Audit Committee is responsible for the establishment and maintenance of a framework of internal control and ethical standards for the management of the company.
The committee's duties include dealing with the effectiveness and efficiency of significant business processes, the safeguarding of assets, the maintenance of proper accounting records and the reliability of financial information. The Audit Committee also deals with non-financial matters.
All members of the audit committee are non-executive directors. The committee meets four times per year.
Performance of directors and key executives
The performance of the Board and key executives is reviewed regularly. The performance criteria against which directors and executives are assessed are relevant to the objectives of CogState Limited. Directors whose performance is consistently unsatisfactory may be asked to retire.
Remuneration and nomination committee
The Board is responsible for determining and reviewing compensation arrangements for the directors, the CEO and the executive team. CogState remunerates directors and key executives fairly and appropriately, in relation to relevant employment market conditions.
The Board has established the Remuneration and Nomination Committee that meets twice per year to assess the company's financial and operational performance and recommend emoluments to directors and officers. The expected outcomes of the remuneration structure are:
- Retention and motivation of key executives
- Attraction of quality management to the company
- Performance incentives for the executives that contribute to the success of CogState Limited.
The Board exercises discretion in relation to the granting of options, having regard to the overall performance of CogState Limited and the desire to motivate the individual. There is no scheme to provide retirement benefits, other than statutory superannuation, to non-executive directors.
3. Promote ethical and responsible decision making
4. Safeguard integrity in financial reporting
5. Make timely and balanced disclosures
6. Respect the rights of shareholders
7. Recognise and manage risk
8. Encourage enhanced performance
9. Remunerate fairly and responsibly
10. Recognise the legitimate interests of stakeholders
In accordance with ASX Listing Rule 4.10, CogState provides a statement in the annual report disclosing the extent to which the Council's best practice recommendations have been followed in the reporting period, together with reasons for instances in which they have not been followed.
