Flight Centre New Zealand
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Flight Centre Corporate Governance

Version 10.0 - last updated 22/08/2014

1. Lay solid foundations for management and oversight

The board acknowledges that its primary role and responsibility is to create and safeguard shareholder value.

The Board's functions include:

  • - Charting the group's direction, strategies and financial objectives
  • - Overseeing and monitoring organisational performance
  • - Identifying risks and implementing appropriate control, monitoring and reporting mechanisms
  • - Appointment, performance assessment and, where appropriate, removal of the Chief Executive Officer (CEO), Chief Financial Officer (CFO) and Company Secretary
  • - Ensuring the board structure and composition is effective
  • - Approving and monitoring the progress of major capital expenditure, acquisitions and capital management

  • Under FLT’s constitution, the board can delegate any of its powers to the managing director (MD). Those powers can be withdrawn, suspended or varied at any time.

    The MD, CFO and other senior executives are authorised to make day-to-day decisions required to fulfil their roles and to achieve the company’s strategic and financial objectives.

    Senior executives report to the board each month to update it on initiatives and issues. These reports include key performance indicators (KPIs), which are the basis of executive performance evaluations.

    The full board deals with all significant matters. To assist in its deliberations, the board has established various committees that act primarily in a review or advisory capacity.

    2. Structure the Board to add value

    The Board has a complimentary mix of skills that provide the desired depth and experience. FLT will continue with its traditional board composition of four non-executive directors and a managing director.

    The MD is not the board chairman.

    The Board meets monthly and on an ad hoc basis to consider time critical matters.

    Directors may seek legal advice, at the company's expense, on any matter relating to the group subject to prior notification to the Chairman. FLT provides additional updates and training to board members on matters relating to their roles. Examples may include corporate governance updates and the impacts of recent court rulings involving such topics as directors’ duties, disclosures and transactions.

    Board Composition

    The directors' names and biographical details are provided in the Information on Directors section in the annual report.

    Remuneration and Nominations Committee Functions

    FLT’s Remuneration and Nomination Committee includes FLT’s non-executive directors. Due to the board’s small size, FLT has a combined Remuneration and Nomination Committee. Consequently, the Remuneration and Nomination Committee considers (per the charter) board composition to ensure it includes the appropriate blend of skills and competencies to oversee the company.

    At all times, the board is to have a complementary mix of financial, industry and listed entity knowledge and experience. The board believes current members have the necessary knowledge and experience to direct FLT in its current operations.

    Where a board position becomes available or where additional skills may be required at board level, the Remuneration and Nomination Committee establishes whether to nominate a further director. For example, if the company chose to access a new region or sector, the committee may consider appointing an additional director with appropriate experience.

    The board will engage a professional recruitment firm to identify candidates that fit the criteria being sought to complement the board and its existing skills set. Other factors to be considered when appointing a new director will include references, ability to devote time to the role, cultural fit, strong financial acumen, technology knowledge and residential location.

    Once a short list is created, candidates will be interviewed by the Remuneration and Nomination Committee. Ultimately, a candidate will be presented to the full board for appointment (to be ratified at the next AGM by shareholders). Should shareholders nominate a candidate for election at an upcoming general meeting, the board will state whether or not it supports the nomination in the explanatory memorandum accompanying the notice of meeting.

    Directors’ attendance records are reported in the Annual Report’s Meeting of Directors section.

    Independence and Materiality

    An independent director is independent of management and free of any business or other relationship that could materially interfere with the exercise of the Director's unfettered and independent judgment. Materiality is assessed on a case-by-case basis from both the Company and the Director’s perspective.

    3. Promote Ethical & Responsible Decision Making

    The Company actively promotes a set of values designed to assist all employees in their dealings with each other, competitors, customers and the community. Values endorsed include: honesty, integrity, fairness and respect. These values are incorporated into the company core philosophies, which are included in the annual report, and Code of Conduct. The Code of Conduct also outlines the company’s position on lawful and ethical behaviour, conflicts of interest, use of inside information, confidentiality, bribes and facilitation payments, public comments, privacy and harassment, bullying and discrimination.

    In addition, the Company has implemented global Whistleblowing and Anti-Bribery & Corruption policies.

    The Company recognises its corporate social responsibility (CSR) and contributes to several charitable initiatives. The Flight Centre Foundation is a key element in our CSR platform.

    Political Contributions

    The Company maintains a position of impartiality with respect to party politics and accordingly does not contribute any funds in this regard.

    Trading Policy

    The Board has established guidelines governing trading of securities in the Company directors, employees and contractors who may be in possession of price sensitive information. Dealings in company shares are only permitted for 30 days following the public release of the Company's price sensitive announcement. If new price sensitive information emerges during this period, directors, employees and contractors are not permitted to trade in the Company's shares until the information has been publicly released.

    For further details, refer to the trading policy at www.flightcentrelimited.com.

    4. Safeguard Integrity of Financial Reporting

    Audit Committee

    Audit committee functions include:

  • - Recommending the external auditor's appointment / removal, reviewing the auditors' performance and audit scope.
  • - To help the Board oversee the risk management framework, including determining the internal audit's scope, ratifying the Chief Internal Auditor's appointment / removal and contributing to the Chief Internal Auditor's performance assessment
  • - Reviewing the company's published financial results
  • - Reporting to the Board on matters relevant to the committee's role and responsibilities
  • - Ensuring timely adoption of, and adherence to, all relevant accounting policy changes.

  • Committee Composition

    The Audit Committee consisted of the Company’s independent non-executive directors; who have extensive experience and expertise in accountancy, financial management, risk management, legal compliance and corporate finance. Details of the directors' qualifications and attendance are set out in the annual report.

    The Board has reviewed the committee's composition and is satisfied that, given the size of the Company’s board, the committee has appropriate financial representation. The Chairman of the audit committee is not the chairman of the board of directors.

    Refer to www.flightcentrelimited.com for the Audit Committee Charter.

    Auditor Appointment

    The Company and Audit Committee policy is to appoint an external auditor that clearly demonstrates quality and independence. The external auditor's performance is reviewed annually. Ernst & Young (EY), the current auditor, is obliged to rotate audit engagement partners at least every five years. EY was appointed the Company’s auditor at the 2012 AGM.

    An analysis of fees paid to the external auditor, including fees for non-audit services, is provided in the annual report. The external auditor's policy is to provide the audit committee with an annual declaration of independence.

    Certification of Financial Reports

    The MD and CFO certify that the Company's accounts are a true and fair representation of the Company's financial results and position.

    5. Make Timely and Balanced Disclosure

    The Company has written policies and procedures governing continuous disclosure and shareholder communication.

    In accordance with ASX Listing Rules, the Company will immediately disclose publicly any information that a reasonable person would expect to have a material effect on the value of its shares.

    All information communicated to the Australian Stock Exchange (ASX) is to be posted on the company website.

    The annual report is available on the Company’s website and, on request, can be emailed or posted to shareholders.

    Refer to www.flightcentrelimited.com for the Communications and Disclosure Policy.

    6. Respect Rights of Shareholders

    Shareholder Communications

    The Board aims to inform shareholders of all major developments affecting the group's activities and its state of affairs through distribution of the annual report, Australian Stock Exchange announcements and media releases. All such communications are placed on the company website, www.flightcentrelimited.com.

    Auditor Communication

    The external auditors are asked to attend the AGM to answer shareholder questions concerning the conduct, preparation and content of the audit report.

    Refer to www.flightcentrelimited.com for the Communications and Disclosure Policy.

    7. Recognise and Manage Risk

    Risk management is good management and is the responsibility of all employees.

    The board, through the Audit Committee, is responsible for overseeing the Company’s integrated risk and compliance management framework. This framework provides the board and management with an ongoing program to identify, evaluate, monitor and manage significant risks to enhance, over time, the value of the shareholders’ investments and to safeguard assets.

    The framework is based around the following risk initiatives:

  • - Risk identification – identifying significant, foreseeable risks associated with the business
  • - Risk evaluation – evaluating risks in terms of impact and likelihood
  • - Risk treatment/mitigation – developing appropriate mitigation to keep the risk within an acceptable level; and
  • - Risk monitoring and reporting – ongoing reporting, usually on an exception basis on the status of the risk

  • Risks are identified and evaluated against achievement of strategic objectives, as well as more operational activities.

    The MD and senior management are responsible for identifying, evaluating and monitoring risk. Senior management personnel are responsible for ensuring clear communication of their position on risk throughout the Company.

    8. Remunerate Fairly and Responsibly

    Full details of the Company’s remuneration policies and structures, including director and key management personnel information, are outlined in the remuneration report in the annual report and on www.flightcentrelimited.com. All relevant governance charters and policies are available on www.flightcentrelimited.com.

    © Flight Centre Limited
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