This Governance section applies specifically to the Southern Cross Medical Care Society (which is the legal name for the Southern Cross Health Society). This page was last updated as at 17 September 2012.
Statement of Corporate Governance
The Southern Cross Medical Care Society adheres to principles designed to ensure sound corporate governance of its affairs, including Reserve Bank of New Zealand Governance Guidelines for licensed insurers issued under the Insurance (Prudential Supervision) Act 2010.
Board of Directors
The Southern Cross Medical Care Society is governed by a Board of Directors who are elected by members of the Society. The administration, management and control of the Society is vested in the Board.
All current directors have been assessed by the Board in accordance with the Society’s Fit and Proper Policy and have been certified as meeting the Reserve Bank of New Zealand’s Fit and Proper Standard for directors of Licensed Insurers.
All current directors are considered to be independent, in that they are independent of management and free from any associations that could materially interfere with the exercise of independent judgement.
The Rules of The Southern Cross Medical Care Society provide for the appointment of three Trustees. All property belonging to the Society vests in the Trustees who hold it in trust for the members. As set out in the Investment Charter of Trustees, the Trustees are responsible for formulating overall investment policy (subject to approval by the Board) establishing investment guidelines, and monitoring the management of the investment portfolios. Trustees are nominated from among the Directors and elected by members of the Society.
The Trustees in office as at 30 June 2012 are: Carole Durbin, Graeme Hawkins and Phillip Meyer.
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Board role and charter
The Board operates in accordance with the Friendly Societies and Credit Unions Act 1982, the Society’s Rules and the Board Charter. The Board Charter describes the Board’s role, procedures and relationship with management.
The role of the Board is to effectively represent, and promote the interests of, members. Means by which this is achieved include:
- ensuring the Society’s goals are clearly established, and that strategies and business plans are in place for achieving them
- establishing policies for enhancing the performance of the Society
- monitoring the performance of management
- appointing the CEO
- identifying steps necessary to protect the Society’s financial position
- ensuring the Society’s financial statements are true and fair and otherwise conform with legal requirements
- ensuring the Board and management adhere to high ethical standards
- ensuring the Society has appropriate risk management and regulatory compliance policies and procedures in place.
The Board will regularly evaluate economic, political, social and legal issues and any other relevant external matters that may influence or affect the development of the business or the interests of members and/or stakeholders and, if thought appropriate, will take outside expert advice on these matters.
The Board endorses the principles set out in the Code of Practice for Directors as adopted and approved by the Institute of Directors in New Zealand Inc. The Board has also adopted its own Code of Conduct and Ethics Policy to provide guidance to the Board, management and employees on how it expects them to conduct themselves when undertaking business on behalf of the Society.
All Directors disclose any actual or potential conflicts of interest. Should a conflict of interest arise during the course of Board business the affected Director is expected to excuse him or herself from the discussion and does not vote on those matters.
The Board meets formally on a regular scheduled basis and holds additional meetings as the occasion requires. At each normal meeting the agenda will include a report from management covering operational and financial performance, capital expenditure proposals, and major issues and opportunities. At intervals of not greater than one year the Board will review the Society’s goals and strategies, approve budgets and financial statements, and undertake other activities listed in the Board Charter.
Separate strategic planning meetings are held in conjunction with the senior management team on a scheduled basis.
The Board reviews its own performance annually.
Responsibility for the day-to-day operation and administration of the Society is delegated by the Board to the Chief Executive Officer and senior management. The CEO is authorised to make decisions in accordance with the strategy, plans, budgets and the specific delegation framework approved by the Board.
The Board has established a number of committees to assist in relation to specific business aspects. Each Board committee has a charter approved by the Board summarising the role, rights, responsibilities and membership requirements for that committee. The Board regularly reviews the charters of the Board committees and their performance against those charters.
The Audit Committee’s objectives are to assist the Board in discharging its responsibilities in relation to oversight of financial matters including internal and external audit functions.
Specific responsibilities include reviewing the content and disclosure of the Annual Report’s financial statements; ensuring the Board makes informed decisions regarding accounting policies, practices and disclosures; recommending the appointment of external and internal auditors; reviewing the annual external and internal audit plans; ensuring that adequate internal control systems are in place; and ensuring management has established a risk management framework to effectively identify, treat, monitor and report key business risks. The Audit Committee comprises Liz Hickey (Chairman), Graeme Hawkins, Phillip Meyer and Keith Taylor.
The Remuneration Committee’s objectives include providing advice to the Board in relation to the remuneration, employment conditions, development and performance management of the organisation’s Chief Executive Officer and senior executives, and other remuneration-related matters including standard terms and conditions of employment. The Remuneration Committee comprises Carole Durbin (Chairman), Douglas Baird, Greg Gent and Graeme Hawkins.
The Nomination Committee’s objectives are to assist the Board in planning the Board’s composition, evaluating the capabilities required of prospective Directors, identifying those prospective Directors, assessing Directors and relevant officers in accordance with the Society’s Fit and Proper Policy, establishing the degree of Director independence, developing succession plans for the Board, and making recommendations to the Board accordingly. The Committee will consult with external advisors including executive search consultants and other independent sources of information and advice as it considers necessary for carrying out its responsibilities. The Nomination Committee comprises Graeme Hawkins (Chairman), Doug Baird, Carole Durbin, Greg Gent and Liz Hickey.
The Investment Committee’s role is to act in an advisory capacity to the Board and Trustees in fulfilling their oversight responsibility for the investment assets of the Society. The Committee monitors, and provides advice in relation to, the management of the Society’s investment portfolios. The Investment Committee comprises the Trustees – Phillip Meyer (Chairman), Carole Durbin and Graeme Hawkins - and Keith Taylor.
External audit independence
The Board is committed to auditor independence. The Audit Committee is responsible for making recommendations to the Board concerning the appointment of external auditors and their terms of engagement. In September 2011 the Board supported the recommendation of the Audit Committee to re-appoint KPMG as the external auditors for the year ended 30 June 2012. Members approved the re-appointment of KPMG as auditors at the Annual General Meeting in December 2011.
Loans to Directors
The Society does not make loans to Directors.
Board policies and charters