Board Charter

The Newcastle Port Corporation (the Port Authority) was established as a corporation by the Ports and Maritime Administration Act 1995 and is subject to the State Owned Corporations Act 1989. Since the amalgamation of Sydney Ports Corporation and Port Kembla Port Corporation with Newcastle Port Corporation on 1 July 2014, the Port Authority has operated under the trading name Port Authority of New South Wales (Port Authority).

The principal functions of Port Authority are:

(a) To establish, manage and operate port facilities and services in its ports; and
(b) To exercise the port safety functions for which it is licensed in accordance with its operating licence.

If there is any inconsistency between this Charter and the applicable legislation or Memorandum and Articles of Association ("Articles"), the legislation and Articles will prevail.

2.1 The overall role of the Board is to:

• Set corporate direction and goals;
• Set the risk appetite for Port Authority
• Oversee the plans of management to achieve these goals; and
• Review progress at regular intervals.

2.2 The Board is responsible for ensuring that the Port Authority has an appropriate corporate governance structure to ensure the implementation of its objectives namely:

(a) to be a successful business and, to this end,
i. to operate at least as efficiently as any comparable businesses, and
ii. to maximise the net worth of the State's investment in the Port Authority;
(b) to exhibit a sense of social responsibility by having regard to the interests of the community in which it operates;
(c) where its activities affect the environment, to conduct its operations in compliance with the principles of ecologically sustainable development contained in section 6(2) of the Protection of the Environment Administration Act 1991;
(d) to exhibit a sense of social responsibility towards regional development and decentralisation in the way in which it operates;
(e) to promote and facilitate trade through its port facilities; and
(f) to ensure that its port safety functions are carried out properly.

2.3 The Board is also responsible for ensuring the Port Authority recognises its legal and other obligations to all legitimate stakeholders from time to time where and to the extent appropriate.

2.4 The Port Authority will adopt the NSW Treasury Guidelines for Boards of Government Businesses (Guidelines).

3.1 Number of Directors
In accordance with the State Owned Corporations Act 1989, the Board shall have not fewer than 3 and not more than 7 Directors appointed by the Governor on the recommendation of the Voting Shareholders. The Voting Shareholders must consult the Portfolio Minister regarding Director appointments.

3.2 Chief Executive Officer (CEO) Appointment
The Port Authority is to have a CEO appointed by the Governor on the recommendation of the Portfolio Minister, following a recommendation from the Board. The CEO may be appointed as a Director.

3.3 Rotation of Directors
Directors are appointed for a term specified in their letter of appointment (usually a term of three years, with a maximum of two terms). 

3.4 Remuneration
Remuneration of Directors is determined by the Voting Shareholders.

3.5 Independence
All Directors are expected to exercise independent judgment when making Board decisions. A Director is considered independent if he or she is independent in character and judgement and there are no relationships or circumstances which could materially interfere with, or appear to materially interfere with, the exercise of independent judgement. An independent Director is a Non-executive Director. A Director will be deemed independent where the Director:

• is not employed, or has not been employed in an executive capacity by the business or any of its subsidiaries, and there has been a period of at least three years between ceasing that employment and serving on the Board;
• has not within the last three years been in a material business relationship (e.g. as a supplier or customer) with the entity or any of its subsidiary entities, or an officer of, or otherwise associated with, someone with such a relationship;
• is a substantial shareholder of the business or an officer of, or otherwise associated with, a substantial shareholder of the business;
• has not had a material contractual relationship with the business or any of its subsidiaries other than as a Director of the business;
• has close family ties with any person who falls within any of the categories described above; or
• has been a director of the entity for such a period (10 years or greater) that his or her independence may have been compromised.

In each case, the materiality of the interest, position, association or relationship needs to be assessed to determine whether it might interfere, or might reasonably be seen to interfere, with the Director’s capacity to bring an independent judgement to bear on issues before the Board and to act in the best interests of the business and its shareholders generally.

3.6 Board Committees
To assist the Board in fulfilling its duties and responsibilities, it has established an Audit & Risk Committee, a People & Culture Committee and a Nominations Committee. Each Committee has a formal Charter. With the exception of certain limited delegations contained in their Charters, recommendations of the Committees are to be referred to the Board for approval.

3.7 Conflicts of interest
Directors are required to disclose any potential conflicts for recording in the Port Authority's conflicts register. Directors are required to update this register on an ongoing basis as circumstances change.

In relation to specific Board decisions, the Board complies with Clause 2, Schedule 10 of the State Owned Corporations Act 1989. A Director cannot take part in discussions or vote on a matter is which that Director has a material personal interest, unless the Board resolves that the interest does not disqualify the Director.

The Guidelines recommend that Directors should not hold directorships of more than three Government boards. The Port Authority supports this recommendation and Directors are required to inform the Chair prior to accepting any new appointments in the NSW public sector and inform the Chair of any other appointments.

4.1 Appointment Letter
Upon appointment, a new Director will be given a formal letter of appointment from the Voting Shareholders setting out the key terms and conditions of their position.

4.2 Induction Program
Upon appointment, the Company Secretary is responsible for arranging for the new Director to undertake an induction program to enable them to gain an understanding of the Port Authority's business. A range of information is provided, including:

• Copies of relevant legislation;
• Code of Conduct;
• Most recent annual report;
• Board profiles and contact details;
• Board and Committee charters
• Statement of Corporate Intent and Business Plan; 
• Statement of Expectations; and
• Recent Board and Committee meeting minutes.

In addition, new Directors are provided with access to an induction program to gain an understanding of the Port Authority's:

• strategy, objectives and business;
• industry in which the Port Authority operates;
• corporate governance practices;
• current financial and business performance;
• key executives;
• remuneration strategy; 
• risk appetite statement; and
• risk management framework.

4.3 Ongoing Education
Directors are encouraged to continue their education and Port Authority will fund any appropriate development activities. Directors are also provided with regular site visits and workshops to ensure they understand the nature of the business.

4.4 Ongoing Information
The CEO, Company Secretary and other Executive Management must be conscious to ensure that updated information is provided to the Board in a timely fashion to enable them to effectively discharge their duties as Directors. This may be part of, or in addition to, the periodic Board reporting process.

4.5 Requested Information
Directors are entitled to request and receive such additional information as they consider necessary to support informed decision-making. Any Director has the authority to seek any information he/she requires from any employee or contractor of the Port Authority, and all employees must comply with such requests.

Unless a conflict exists or to do so would be inconsistent with the Director's duties, the Director is to request such information via the Chair, CEO or Company Secretary.

4.6 Independent Advice
The Board and each individual Director, subject to informing the Chair, has the right to seek independent professional advice from a suitably qualified advisor, at the Port Authority's expense, to assist them to carry out their responsibilities. Where appropriate, a copy of this advice is to be made available to all other members of the Board.

5.1 The Board generally meets eight times a year and it meets more frequently as circumstances require.  Where the Chair considers it appropriate, matters may be dealt with by the Board through special Board meetings or circular resolutions.

5.2 A quorum for a meeting of the Board is a majority of Directors for the time being.  

5.3 The Company Secretary is responsible for ensuring the Board receives papers in advance of meetings and taking minutes of the meetings.  

5.4 The CEO (if not an appointed Director) and other members of executive management, at the discretion of the Board, are invited to attend Board meetings and are also available to be contacted by Directors between meetings.  However, the Board will meet without executive management present on a regular basis.

5.5 The Board may, if it thinks fit, transact any of its business by circular resolution amongst all of the Directors of the Board for the time being. A resolution approved by a majority of those Directors is taken to be a decision of the Board. 

6.1 The Board is responsible for overseeing the business and commercial affairs of the Port Authority including:

• establishing a clear set of governance roles and responsibilities;
• providing leadership on strategy development and approving the strategy;
• overseeing the preparation of major plans, including the Statement of Corporate Intent;
• approving the risk appetite statement;
• approving the business and financial objectives;
• overseeing the Port Autority's operations and compliance in the areas of work health and safety, port safety, port security, environmental management and heritage;
• monitoring business and financial performance, including performance against the annual budget;
• acting as an interface and key point of accountability between the Port Authority and its Voting Shareholders and from time to time, in
• accordance with the State Owned Corporations Act 1989, the Portfolio Minister;
• reviewing performance, employment terms and conditions and remuneration of the CEO and executive management;
• reviewing and monitoring the risk management and internal control framework;
• providing recommendations to the Portfolio Minister for the appointment of the Chief Executive Officer;
• appointing and removing the Company Secretary;
• establishing appropriate delegations to Board Committees and the CEO;
• approving Port Authority’s Financial Capital, Treasury and Risk Management Policy and the timing and amount of any dividend payments; 
• reviewing all material board policies, except where delegated to Committees; and
• reviewing, and approving where appropriate, reporting to Shareholding Ministers, including annual financial statements.

6.2 All Directors are entitled to be heard at all Meetings and to the extent practicable, should bring an objective judgement to bear in decision-making.

The Chair is appointed by the Voting Shareholders and is responsible for:

• leadership of the Board;
• overseeing the Board in the effective discharge of its role;
• the efficient organisation and conduct of the Board's function and meetings; and
• facilitating the effective contribution of all Directors.

The CEO is responsible for the day to day management of the operation of the Port Authority in accordance with the general policies and specific directions of the Board. It is the responsibility of the Board to oversee the activities of management in carrying out these delegated duties. More specifically, the CEO is responsible for:

• working with the Board to build an appropriate organisational culture and values;
• recommending to the People & Culture Committee the appointment or removal of the Executive team;
• developing the Port Authority's strategy for review and approval by the Board;
• working with the Board to determine long term and short term objectives;
• implementing the Board approved strategy; and
• keeping the Board appropriately informed of the operations of the Port Authority.

The Board is accountable to the Voting Shareholding Ministers. The Board must prepare and submit annually to the Voting Shareholders a Statement of Corporate Intent. The Port Authority must prepare a quarterly progress report against the Statement of Corporate Intent to submit to the Shareholding Ministers.

In addition, the Port Authority must provide a half year and annual report. The Port Authority must supply information as requested by the Voting Shareholders.

The Shareholding Ministers and Portfolio Minister issue a Statement of Expectations for Port Authority.  The purpose of the statement is to provide guidance to ensure that the strategic direction aligns with the Government’s expectations, while Port Authority continues to operate its business in a commercial manner.

This statement is in addition to, and does not replace, Port Authority’s statutory objectives or obligations. 

The Portfolio Minister is responsible for administering the Port Authority's foundation charter, the Ports and Maritime Administration Act 1995. The Portfolio Minister may direct the Port Authority to perform, or cease to perform, or not perform certain activities. However if the Board considers that it is not in the commercial interest of the Port Authority to carry out the direction, the Portfolio Minister, with the approval of the Treasurer may, by written notice to the Board, direct the Port Authority to do so. If this occurs, the Port Authority is entitled to be reimbursed for any net cost of complying with the direction.

The Portfolio Minister, with the approval of the Treasurer, can notify the Port Authority of any public sector policy to apply to the Port Authority and give the Board a direction that is in the public interest. Before giving such a direction, the Portfolio Minister must consult with the Board and the Board must advise whether, in its opinion, it is in the best interests of the Port Authority. If this occurs, the Port Authority is entitled to be reimbursed for any net cost or foregone revenue of complying with the direction.

The Port Authority must provide the Portfolio Minister with information as requested from time to time.

The Board is responsible for the adoption, oversight and administration of relevant corporate governance materials of the Port Authority.

The Annual Report includes a Corporate Governance Statement which will contain the content required by the Guidelines (as well as an explanation of any departures from the Recommendations). As part of an effective communications strategy, the Port Authority will maintain and keep current its Corporate Governance website.

To determine whether it is functioning effectively, the Board shall:

• review this Charter periodically; and
• perform an evaluation of its performance on an annual basis, with every third evaluation to be conducted by an external, independent party.