TIO 2007 Annual Report

072007 ANNUAL REPORTand potential Board Members is a key considerationfor appointment to ensure that there is a strongcomplement of skills and experience in the differentareas of TIO’s business. Currently the Board consistsof nine non-executive members and one executivemember. One of the members is designated as theMotor Accidents Compensation Scheme Member withspecial responsibilities to represent the interests of theMotor Accidents Compensation Scheme Fund to theexclusion of the remainder of the TIO Group.Under the Act, the Chairman and Deputy Chairmanare appointed by the Minister with the Chief Executivebeing ineligible for appointment to these offices.Board Members may resign by written notice to theMinister and can have their membership of the Boardterminated by the Minister. The Board has establishedfour committees with specific Terms of Reference(Audit & Risk Committee, Investment Committee,Reinsurance Committee, and a Remuneration,Nomination & Succession Committee) to assistand support the Board in the conduct of its duties.The Committees allow a more concerted focus andconsideration of critical elements of the Board’sresponsibilities.The Board Audit & Risk Committee monitors andreviews the effectiveness of TIO’s control environmentin the areas of financial management and reporting,reinsurance, actuarial valuations, risk management,compliance and internal control. Under theCommittee’s Terms of Reference, the majority ofmembers must be independent, non-executive BoardMembers of TIO. In accordance with good governanceprinciples, the Board Chairman and the ChiefExecutive cannot be members of the Committee butare able to attend.The Auditor-General of the Northern Territory andActuary (PriceWaterhouseCoopers) have the right toattend Audit and Risk Committee meetings exceptin circumstances where there could be a perceivedconflict of interest.The Board Investment Committee is responsible forTIO’s Investment Policy including the establishmentof fund objectives, asset allocation principles,development of risk parameters, diversificationoptions and the setting of investment guidelines.The investment portfolio responsibility relates to the‘commercial business’ (in particular, insurance) andthe Motor Accidents Compensation Scheme Business(relating to the Motor Accidents CompensationScheme). The Committee regularly reviews theperformance of the portfolio and is responsible for theappointment and evaluation of the fund managers.The Board Reinsurance Committee is responsible forTIO’s reinsurance matters, including advising theBoard on appropriate reinsurances consistent withTIO’s operations, relevant prudential standards andthe expectations of the Government. The Committeeregularly reviews the placement and performance ofTIO’s reinsurance program in relation to insuranceand the Motor Accidents Compensation Fund. ThisCommittee was established in March 2007.The Board Remuneration, Succession and NominationCommittee is responsible for providing advice to theBoard relating to the appointment, remuneration andperformance evaluation of the Chief Executive.Further, this Committee ensures that appropriatesuccession plans and executive level remunerationpolicies are in place and are effective. Finally, theCommittee also assists the Minister in relation toproviding recommendations as to potential BoardMembers and their associated expertise designed toassist the Board in the execution of its responsibilities.This Committee was established in March 2007.PRINCIPLE 3: PROMOTE ETHICAL ANDRESPONSIBLE DECISION-MAKINGACTIVELY PROMOTE ETHICAL AND RESPONSIBLEDECISION-MAKING.TIO has adopted a vision and a set of values whichunderpin and provide conceptual guidance in pursuingthe vision. A suite of policies and proceduresadditionally strengthen the decision-making context.TIO is an equal opportunity employer whichrecognizes that its strength lies in the rich diversityand experiences of its employees. Employmentrelated decisions within TIO are consistent with thespecific requirements of Northern Territory andCommonwealth legislation. Board Members,management and employees are expected to actethically and responsibly and with the utmostintegrity. The Board plays a key role in upholdingthe values of TIO and promoting high standards ofcorporate and business ethics.The Board may engage consultants to provideindependent professional advice in any aspect ofTIO’s operations. Under the Act, Board Members havea general duty of disclosure in relation to dealings orcontracts with TIO and directorships of othercompanies. A register of these interests is maintained.Additionally, members must keep the Board informed,43