2009 GMHBA Annual Report - GMHBA Health Insurance

GMHBA Limited ABN 98 004 417 092CORPORATE GOVERNANCE STATEMENTFOR THE YEAR ENDED 30 JUNE 2009The Board of GMHBA Limited has a governance framework to ensure that the Board complies withthe relevant requirements of the Corporations Act 2001, the Company’s Constitution, the PrivateHealth Insurance Act 2007 and Associated Rules and embodies relevant corporate governancebest practice.The Company is committed to achieving the highest practicable standards of corporategovernance. This statement provides an overview of the main corporate governance practices thatwere in place throughout the financial year.Code of conductThe code of conduct has been established as the basis for ethical and professional conductnecessary to meet the expectation of Fund members and other stakeholders. As theseexpectations will change over time, the code is subject to regular review.The main purpose of a code of conduct is to provide a common understanding of the Company’sexpectations in regard to ethical and professional conduct and to assist Directors in dischargingtheir obligations. Achieving this objective will also deliver other benefits to the Company.Conflict of interestSubject to the provisions of the Corporations Act and the Company’s Constitution, the Board isempowered to regulate its meetings and proceedings, including the processes it will apply ininstances of a declared, actual or perceived conflict of interest.Board CommitteesThe Board Committees in operation throughout the year were:Audit & Compliance CommitteeThe role of the Committee is to oversee the establishment and maintenance of a framework ofinternal control, to monitor the audit and actuarial function ensuring regulatory compliance andadvise on appropriate ethical standards for the management of the Company. This enables thecommittee to give the Board additional assurance regarding the quality and reliability of financialinformation prepared for use by the Board in determining policies or for inclusion in financialreports.Nomination & Remuneration CommitteeThe role of the Committee is to assist the Board of Directors in fulfilling its responsibilities fordetermining and reviewing compensation arrangements for Directors and senior management,succession planning and the appointment and removal of Directors.GMHBA Limited ABN 98 004 417 092CORPORATE GOVERNANCE STATEMENTFOR THE YEAR ENDED 30 JUNE 2009 (CONTINUED)Internal control frameworkThe Board acknowledges that it is responsible for the overall internal control framework, butrecognises that no cost effective internal control system will preclude all errors and irregularities.To assist in discharging this responsibility, the Board has instigated an internal control frameworkthat can be described under four headings:• Effectiveness and efficiency of operations• Reliability of reporting• Compliance with applicable laws & regulations• Code of conductInternal audit functionThe internal audit function assists the Board in ensuring compliance with these internal controls.The Audit & Compliance Committee is responsible for approving the program of internal audit to beconducted each financial year and for the scope of the work to be performed. The internal auditfunction, while operationally reporting to the Chief Executive, also reports to the Audit &Compliance Committee. The Committee meets with the internal auditor on a regular basis.Business risk managementThe Audit & Compliance Committee provides advice to the Board and reports on the status ofbusiness risks to the Company through an integrated risk management plan aimed at ensuringrisks are identified, assessed and appropriately managed.The risk management process involves ensuring:• Strategic, operational and financial risks are identified• The systems are in place to monitor and manage the risks• Reporting systems are in place• The risk management systems are operating effectively• Compliance with relevant legislation• Compliance with the code of ethical conductA comprehensive insurance program provides protection against major risk exposures that cannotbe eliminated by appropriate risk management practices.Investment CommitteeThe role of the Committee is to advise on the Company’s total investment portfolio, managed bothinternally and externally.Strategy CommitteeThe role of the Committee is to assist the Board of Directors in identifying and establishingGMHBA’s future strategic direction in line with the Company’s Mission and Vision statements.Health Services CommitteeThe role of the Committee is to assist the Board of Directors in fulfilling their responsibilities inrelation to ensuring that all health services initiatives comply with the Company’s mission,specifically working as a trusted partner to improve Fund members’ health.24 2325 24