The Corporate Governance Principles and Recommendations

Principle 1 - Lay solid foundations for management and oversight

Board of Directors

• The Board of Directors (Board) is the principal governing body of ICRA and is appointed by the Council. Details of the council are set out later in this document.
• The Board is responsible for the overall governance of ICRA. The Board has adopted a formal charter detailing its functions and responsibilities, which is reviewed annually. Matters specifically reserved to the Board are set out in its charter.
• While the Board has overall control and management of ICRA, it has delegated a range of its powers, duties and responsibilities to its committees, management, functions. The Board must review each delegation at least annually.
• Each Board meeting agenda includes statutory matters, governance and management reports, which include strategic risks, strategic projects and operational items. Time is often scheduled for the Board to meet without management.
• Management of ICRA’s operations and the implementation of corporate strategy and policy initiatives are the responsibility of the Chief Executive Officer (CEO) and management.

Chief Executive Officer (CEO)

• The CEO is appointed by the Board. He or she is responsible for the management of ICRA in accordance with approved strategy, policies, his or her performance contract and delegated authority framework. He or she is responsible for ensuring that the Board is
• provided with the relevant strategic options, policy and financial issues on which to deliberate, and with the necessary administrative support to enable the Board to work effectively.
• The CEO attends Board and Board committee meetings; however, he or she is not a Director and is not entitled to vote.
• Senior executives including the CEO, the Company Secretary and Chief Financial Officer (CFO), have formal job descriptions.

Performance management

All management including the senior executives of ICRA are subject to annual performance planning and reviews. The performance of each executive is assessed by the CEO, who is their immediate supervisor. They are assessed against achievement of their job specifications and goals, contribution towards specific business and strategic objectives, and adherence to ICRA’s core values. Upon commencement at ICRA, all senior management take part in a leadership onboarding program which assists in accelerating our new leaders’ transition into our organisation. The program is designed to integrate the new leader into the organisation’s culture, to assist them in understanding strategy as well as process, establishing relevant networks, and navigating political frameworks.

Principle 2 - Structure the board to add value

The Board consists of 2 independent non-executive Directors (as defined by the CGPR), and two external Directors (who are neither members nor employees). A diagram of the governance structure in place is included in governance structure section. The Board assesses annually the independence of each Director. Directors must disclose to ICRA any matter which may affect their independence as soon as they become aware of it. All Board members are requested to disclose related party transactions on an annual basis and a summary of related party transactions for each Director is disclosed in the annual report. The Chairman is an independent Director, and is not the CEO. Directors are selected on the basis of their skills, experience and other relevant capabilities with due regard to the mix of skill recommended by the Board and to proper succession planning. Directors’ skills, expertise and their terms of office, are set out in the Board of Directors

The Council

Directors are appointed by the Council. The Council is comprised of founding members and other members representing various groups.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee assists the Council in selecting appropriate candidates for appointment to the Board. It reviews candidates and makes recommendations to the Council. The council must have due regard to, but is not bound by, the recommendations of the Nomination and Remuneration Committee. It also advises the Board and the Council on succession plans for the Board. It recommends to the Board appointments for all membership committees. The Nomination and Remuneration Committee consists entirely of Directors. The Chairman is a Director. The composition of the committee and meeting attendance is set out in the Report to the Board of Directors notes to the financial statements. The same note sets out Directors’ attendances at Board and other Board committee meetings.

Board performance

The Board must annually review its performance and that of each Director. The Nomination and Remuneration Committee recommends to the Board the skills and competencies required on the Board and assesses the extent to which those skills are represented on the Board. Induction and education: New Directors receive information outlining their duties and responsibilities. New Directors attend a formal induction meeting with the Executive Management Group. Access to information: Senior executives supply the Board with information to allow it to make decisions on an informed basis, and regularly attend meetings. The Board and the Company Secretary: All Directors have access to the Company Secretary who is appointed by the Board. The Company Secretary is accountable to the Board, through the Chair, on governance matters.

Information required by Principle 2

Directors are entitled to serve a maximum of two terms consisting of three years each. The Board is moving to a rotational model of one-third of the Board, so during a transitional period, some Directors will have longer terms to effect the transition. Full information on this transition is located in the Constitution. Directors are entitled to obtain reimbursement of the reasonable costs of any independent advice obtained in respect of their office. If a Director wishes to obtain independent external advice, then he or she must notify the Board before seeking that advice and obtain the prior approval of the Chair, whose approval shall not be unreasonably withheld.

Board Committees

The respective compositions and details of meeting attendance of the committees are set out in the Directors’ Report. Minutes of committee meetings are provided to the Board at its next meeting. The Board currently has four Board committees: Nomination and Remuneration, Audit and Risk, Executive. Each committee has a charter describing its role and composition. The charters are reviewed regularly to ensure that the role and responsibilities of each committee are consistent with ICRA’s strategic and operational objectives. The Audit and Risk committee may co-opt members who, while they are not Directors, bring particular experience to the committees. The Board committees are each scheduled to meet approximately four times per year. Attendance at Board committee meetings is set out in the Financial Report

Principle 3 -  Promote ethical and responsible decision-making

Directors, members and employees of ICRA are required to act in accordance with the highest standards of honesty and integrity (see codes of conduct for Directors, members and employees). The respective codes of conduct, as approved by the Board, are given to all new Directors, volunteer members and employees, which among other things set out expected standards of behavior. ICRA is a member organisation limited by guarantee and does not have securities (shares etc.) so does not report on share-trading policies.

Principle 4 - Safeguarding integrity in financial reporting

Audit and Risk Committee ICRA has established an Audit and Risk Committee to verify and safeguard the integrity of the Company’s financial and non-financial reporting. The committee consists of three independent Directors. It is chaired by an independent Director who is not the chair of the Board. Specifically, the Audit and Risk Committee assists the Board to discharge its responsibilities for external reporting, external and internal audit and internal control and risk management. There is a mix of accounting, legal and business professionals currently serving on the committee. The Audit and Risk Committee has a formal charter, and its meetings and attendance are set out in the Financial Report External Auditors PBS has been ICRA’s external auditor since its founding. The performance of the external auditor is reviewed annually by the Board with advice from the Audit and Risk Committee. An analysis of fees paid to the external auditor, including a breakdown of any non-audit fees paid or received by the auditor, is provided in note to the financial reports. The Audit and Risk Committee has developed principles for the supply of non-audit services which have been endorsed by the Board. It is the policy of the external auditors to provide an annual declaration of their independence to the Audit and Risk Committee. The Audit and Risk Committee undertakes a full review of the terms of engagement of the external auditor and the rotation of external audit engagement partners, before deciding to re-appoint the existing audit firm or seek tenders on the open market.

Principle 5 - Make timely and balanced disclosure

As ICRA is not a listed company; it is not bound by the requirement for continuous disclosure.

Principle 6 - Respect the rights of shareholders

ICRA provides its members with timely access to information about its activities and changes in legislation that may affect the profession. Its three principal communication channels with members are its monthly publication ICRA news, its monthly e-newsletter ICRA Update, and its website.

Principle 7 - Recognise and manage risk

ICRA has a risk management framework, risk policy and a risk management program. The principal objectives of the risk management program are to protect the reputation and financial standing of ICRA and its membership and to optimize service to members. The Board is provided with regular reports on risk through the Audit and Risk Committee. In addition, the Board discusses strategic and major operational risks as part of its regular meeting agenda. The internal audit function has established and implemented a system for identifying, assessing, monitoring and managing material risks throughout ICRA and is independent of the external auditor. The strategic risk profile, including identification and treatment of risks and mitigating controls, is regularly reviewed and approved by the Board. The internal auditor and Executive Management Committee continuously monitor the risk profile and report any risks to the Board via the Audit and Risk Committee. Principle 8- Remunerate fairly and responsibly Directors The Constitution of ICRA provides that the Board may approve payments to Directors based on percentages of the Auditor-General’s salary. Directors do not receive retirement benefits. Management The Nomination and Remuneration Committee approves the salary bands for management and increases, based on external advice from qualified specialists. The Board has the responsibility to approve the terms of the CEO’s appointment. The CEO has personal performance indicators and is eligible for a bonus payment subject to the approval of the Board after its evaluation of the performance of the CEO. This evaluation involves an assessment of a range of factors including the overall performance of ICRA and the achievement of predetermined goals. The Nomination and Remuneration Committee considers overall management remuneration. Under the terms of ICRA’s annual performance contract, attainment of demanding performance targets can result in a performance bonus being approved by the Board and paid to staff who reach individual performance targets. The Finance Committee approves the amount of bonus pool available under the annual performance contract.