RAMSAY HEALTH CARE LIMITED
Board Charter

The role of the Board is to effectively represent and promote the interests of the Company’s shareholders with a view to adding long-term value to the Company’s shares and for the protection of shareholder funds.

The Board is accountable to the shareholders for the management of the Company’s business and affairs, and as such is responsible for the overall strategy, governance and performance of the Company.

The role of the Board includes:

• Setting the strategic direction for the Company by establishing, developing, modifying and monitoring the Company’s strategy.
• Decision making in relation to matters of a sensitive, extraordinary or strategic nature.
• Providing advice and counsel to management on a periodic and ad hoc basis.
• Ensuring management implement the strategic decisions of the Board.

• Ensuring best practice corporate governance;
• Monitoring the performance of the CEO and approving senior management remuneration policies and practices; and
• Reporting to shareholders.

• Ensuring that appropriate compliance frameworks and control are in place and are operating effectively; and
• Approving and monitoring the effectiveness of and compliance with policies governing the operations of the Company.

• Monitoring the integrity of internal control and reporting systems; and
• Monitoring strategic risk management systems, including the review of processes for identifying areas of significant business risk, monitoring risk management policies and procedures, monitoring insurance coverage and oversight of internal controls and review of major assumptions used in the calculation of significant risk exposure.

• Approving decisions concerning the capital of the Company, including capital restructures;
• Reviewing and approving the annual operating budget, the annual and half-yearly statutory financial statements and monitoring the financial results on an on-going basis;
• Determining dividend policy and declaring dividends.

• The appointment the chief executive officer (CEO) and the approval of the succession plan.

• The Board is composed of a majority of non-executive directors, including the Chairman and Deputy Chairman. The chief executive officer and the chief financial officer are executive directors.
• The appointment and removal of Directors is governed by the Company’s Constitution.  The Board is responsible for selecting and approving its own candidates to fill any casual vacancies that may arise on the Board.  Directors who have been appointed to fill casual vacancies must offer themselves for re-election at the next annual general meeting of the Company. In addition at each annual general meeting, one third of the Directors (excluding the CEO) must offer themselves for re-election subject to the proviso that no Director shall serve more than three years without being a candidate for re-election (refer to item 6.8).

• The Board meets regularly in accordance with an agreed schedule. The Board may also meet on other occasions between schedule meetings to deal with specific matters as the need may arise.
• Under the Company’s Constitution, any Director may at any time, and the Company Secretary upon the request of a Director must convene a meeting of the Board.
• Unless the Board unanimously agree, at least 48 hours notice must be given of every Director’s meeting.
• A timetable for management to bring proposals in relation to strategic, corporate and financial planning for the Company, to the Board for consideration and approval, has been established.
• Matters approved by the Board are executed by management and monitored by the Board in accordance with a business unit/specific project reporting timetable.

The following Committees have been established to operate under terms of reference approved by the Board:

• Audit Committee
• Remuneration Committee
• Risk Management Committee

a) Audit Committee

This Committee assists the Board in fulfilling its fiduciary responsibilities in relation to corporate accounting and reporting practices.

The Audit Committee’s responsibilities are to oversee and review:

i) The reporting process and to provide an objective review of the financial information presented by management to the Board and for presentation to shareholders, regulatory authorities and the general public;
ii) The existence and maintenance of internal controls and accounting systems;
iii) The scope and effectiveness of the external audit;
iv) The appointment, performance and remuneration of external auditors; and
v) To maintain lines of communication between the Board and the external auditors.

The Remuneration Committee’s responsibilities are to:

i) Make recommendations to the Board on the appointment of the CEO;
ii) Review and make recommendations on the remuneration strategy and packages for the CEO and other senior executives;
iii) Make recommendations to the Board on session planing for senior executives.

The Risk Management Committee is responsible for the ongoing assessment and management of risk.

In addition the Risk Management Committee is responsible for the Company’s hospital accreditation process and the review of clinical and infection control procedures.  The Committee also verifies the credentials of medical practitioners who use the Company’s facilities, and receives reports from each hospital’s medical advisory board.

• The Board delegates the responsibility for the day-to-day management of the Company to the chief executive officer (CEO), who is assisted by the chief financial officer (CFO).
• The CEO must consult with the Chairman or Deputy Chairman on any matters, which the CEO considers, are of such a sensitive, extraordinary or strategic nature as to warrant the attention of the Board regardless of value.
• The authorisation thresholds for the control of expenditure and capital commitments have been established and defined in the Company’s policy on Delegated Authorities. Subject to these policy limits, the CEO may sub-delegate the day-to-day running of the Company to the senior executive team.
• The exercise of delegated authority is restricted to specific organisational functions and roles, including, determining conditions of employment, the write off of assets, instructing external advisers, property transactions, taxation payments, treasury transactions and dealings with other parties.
• Special and routine capex proposals, which have investment or expenditure initiatives with direct or indirect exposure to the Company, above the CEO’s approval threshold of $200,000, must be submitted to the Board for approval.

• To ensure that the Company is meeting its obligations under the listing rules requirements of the Australian Stock Exchange and that price-sensitive information is released to market in a timely fashion, the Company has adopted comprehensive continuous disclosure policy.
• The ultimate responsibility for the management of continuous disclosure rest with the CEO and CFO.

Under the constitution, the Board, each year, at the first meeting immediately following the Annual General Meeting elects the Chairman to hold office for the next twelve months.

The Chairman’s responsibilities are to ensure that the Board discharges its role including:

• Chairing board and shareholder meetings;
• Providing the appropriate leadership to the Board and the Company;
• Ensuring that the membership of the Board is skilled and appropriate for the Company’s needs;
• Facilitating Board discussions to ensure the core issues facing the organisation are addressed;
• Maintaining a regular dialogue and mentoring relationship with the CEO and Senior Executives;
• Monitoring Board performance; and
• Promoting the on-going effectiveness and development of the Board.

The Deputy Chairman may be elected by the Board or appointed by the Chairman.

His responsibilities include:

• Chairing meetings in the absence of the Chairman; and
• Undertaking any other duties as required by the Board.

The CEO is responsible to the Board for the overall development of strategy, management and performance of the Company.  The CEO manages the organisation in accordance with the strategic business plans and policies approved by the Board to achieve the agreed goals.

Directors are encouraged to question, request information, raise any issue which is of concern to them, fully canvas all aspects of any issue confronting the company and cast their vote on any resolution, according to their own judgement. Outside the boardroom, Directors should support the letter and spirit of Board decisions.

Directors must keep confidential Board discussions, deliberation and decisions which have not been publicly disclosed by the Company.

Confidential information received by a Director in the course of the exercise of directorial duties remains the property of the company and it is improper to disclose it, or allow it to be disclosed, unless that disclosure has been properly authorised, or is required by law.

In accordance with legal and statutory requirements, Directors must:

• Discharge their duties in good faith and honesty, in the best interests of the Company and for a proper purpose;
• Act with required care and diligence, demonstrating commercial reasonableness in their decisions and with the level of skill and care expected of a director;
• Avoid conflicts of interest – i.e. be alert to potential conflicts of interest and do not vote on or participate in the discussion of issues where the director has a material personal interest in the issue (except as permitted by the corporations act) (see 6.3 below);
• Act for the benefit of the company at all times;
• Not make improper use of information gained through their position as a director;
• Not take improper advantage of the position of director;
• Make reasonable enquiries to ensure that the company is operating efficiently, effectively and legally towards achieving its goals;
• Undertake diligent analysis of all proposals placed before the Board.

Directors decide which company matters are delegated to management and must ensure that delegates are reliable and competent and that adequate controls are in place to oversee the operation of the delegated powers.

Individual Directors, other that the CEO, must not purport to bind the Company unless expressly authorised to do so by the Board.

The Corporations Act 2001 and the Company’s Constitution require Directors to disclose any conflicts of interest and to abstain from participating in any discussion or voting on matters in which they have a material personal interest.  In addition, the Board has developed procedures to be followed by a Director who believes he or she may have a conflict of interest or material personal interest.

When a Director becomes aware of a conflict of interest, the Director must:

• Disclose to the Board the actual or potential conflict of interest as soon as it arises;
• Take such steps as are necessary and reasonable to resolve any conflict of interest within an appropriate period; and
• Comply with the Corporations Act provisions about disclosing interests and restrictions on voting.

Generally speaking, the Director should absent themselves form the room when the Board discusses and votes on matters to which the conflict relates.

It is expected that a Director would inform the Chairman of any related party transactions other than personal and domestic dealings with the Company on normal commercial terms and conditions.  Related party transactions should be reported in writing to the Company Secretary, and where appropriate raised for consideration at the following Board meeting.

The Company has adopted a Code of Conduct outlining the standards of personal and corporate behaviour required of all officers and employees.  This Code reinforces an already strong ethical culture for the benefit of all stakeholders and has application to Directors Conduct.

The CEO, the CFO and the Chairman will oversee communication with the media, analysis, and institutional investors, on issues relating to the Company. 

Retirement of Directors

Under the terms of the Company’s Constitution, one third of all other Directors are subject to re-election by rotation each year.  The Directors to retire by rotation are those who have been longest in office computed from the date of their last election.

A Director, appointed by the Board to fill a casual vacancy, must offer themselves for re-election at the next annual general meeting.

The tenure of the CEO is linked to his executive office.

Role of the Company Secretary

The Board is supported by the Office of the Company Secretary which is responsible for:

• Organising Board meetings;
• Preparing agendas;
• Preparing Board packs;
• Organising Directors’ attendances; and
• Providing a point of reference for all dealings between Board and Management.

As well as ensuring compliance with the statutory requirements of the Corporations Law and Stock Exchange Listing Rules and the various regulatory bodies.

Company Policies

Deeds of Indemnity and Access

The Company has also executed deeds of indemnity in favour of each Director of the Company.

Each of these deeds provides an indemnity on substantially the same terms as the indemnity provided in the constitution in favour of officers.

The deed of indemnity in favour of Directors also allows each Director to access, inspect and make copies of the Company’s books and Board Papers at reasonable times during their directorship.  Under the deed, the Company undertakes to ensure that it will take out and maintain insurance cover for the Directors.