This page of our Corporate Governance section contains information about the operation of our Board, covering:
Board Meetings
The Board meets at least four times a year or whenever the Chairman or three or more members have requested a meeting.
Meetings are generally held at the Company’s offices in Ireland (and in The Netherlands prior to completion of the Re-domicile). At each physical meeting, the Board meets in executive session without management present for at least part of the meeting. The Board may also delegate some of its powers to a sub-committee of the Board or pass resolutions by written consent.
Director attendance at Board and Board Committee meetings during the year ended 31 March 2011 is shown below:
Board meetings
H = number of meetings held during the time the director held office during the fiscal year.
A = meetings attended during the time the director held office during the fiscal year.
| Name |
Board |
Audit |
Remuneration |
Nominating & Governance
|
Managing Board
|
|
|
| |
H |
A |
H |
A |
H |
A |
H |
A |
H |
A |
| Michael Hammes |
7 |
7 |
8 |
8 |
6 |
6 |
5 |
5 |
- |
- |
| Brian Anderson |
7 |
7 |
8 |
8 |
6 |
6 |
- |
- |
- |
- |
| David Dilger |
7 |
7 |
8 |
8 |
3 |
3 |
- |
- |
- |
- |
| David Harrison |
7 |
7 |
8 |
8 |
6 |
6 |
- |
- |
- |
- |
| Donald McGauchie |
7 |
7 |
- |
- |
6 |
6 |
5 |
5 |
- |
- |
| James Osborne |
7 |
7 |
- |
- |
- |
- |
5 |
5 |
- |
- |
| Rudy van der Meer |
7 |
7 |
- |
- |
- |
- |
5 |
5 |
- |
- |
| Louis Gries |
7 |
7 |
- |
- |
- |
- |
- |
- |
4 |
4 |
| Russell Chenu |
|
|
- |
- |
- |
- |
- |
- |
4 |
4 |
| Robert Cox |
|
|
- |
- |
- |
- |
- |
- |
4 |
4 |
Director qualifications
Directors have skills, qualifications, experience and expertise which assist the Board to fulfill its responsibilities and assist the Company to create shareholder value. The skills, qualifications, experience and relevant expertise of each director, and his or her term of appointment, are summarised above in the Board of Directors biography section and also appear in the Investor Relations area of our website (www.jameshardie.com).
Directors must be able to devote a sufficient amount of time to prepare for, and effectively participate in, Board and Board Committee meetings. The Nominating and Governance Committee reviews the other commitments of Board members each year.
Succession planning
The Board, together with the Nominating and Governance Committee, has developed, and periodically reviews with the CEO, management succession plans, policies and procedures for our CEO and other senior executives.
The Board and Nominating and Governance Committee have also spent significant time over the past years considering the appropriate composition of the Board.
During the year, the Board and Nominating and Governance Committee considered the desired profile of the Board, including the right number, mix of skills, qualifications, experience, expertise, diversity and geographic
location of its directors, to maximise the effectiveness of the Board.
Retirement and tenure policy
The Company does not have a retirement and tenure policy. The length of tenure of individual Board directors is considered as part of the Board’s decision-making process when considering whether a director should be
recommended by the Board for re-election.
Board evaluation
The Nominating and Governance Committee supervises the director evaluation process and makes recommendations to the Board. During fiscal year 2011, a purpose-designed survey was used by directors to
self-assess the operation of the Board and each Board Committee, and the results were reviewed and discussed by the Nominating and Governance Committee and the Board.
The Chairman discussed with each Board director, and the Deputy Chairman discussed with the Chairman, his performance and contribution to the effectiveness of the Board. The Nominating and Governance
Committee and the Board discuss annually the performance of the CEO and the CEO’s direct reports, and the Chairman provides that feedback to the CEO. The CEO uses the feedback as part of an annual review of his
direct reports.
Director re-election
The Board’s overriding desire is to maximise its effectiveness by appointing the best candidates for vacancies and closely reviewing the performance of directors subject to re-election.
No director (other than the CEO) shall hold office for a continuous period of more than three years, or past the end of the third Annual General Meeting (AGM) following his or her appointment, whichever is longer, without submitting him or herself for re-election. A person appointed to the Board must submit him or herself for re-election at the next AGM.
Directors are not automatically nominated for re-election at the end of their term. Nomination for re-election is based on their individual performance and the Company’s needs. The Nominating and Governance Committee and the Board discuss in detail the performance of each director due to stand for re-election at the next AGM before deciding whether to recommend their re-election.
Because the Company is a European SE company, the CEO is required to stand for re-election every six years as long as he remains as the CEO. The Company believes this policy is appropriate (having regard to
Australian practice under the rules of the ASX) as it supports the continuity of management performance.
Independence
The Company requires the majority of directors on the Board and Board Committees, as well as the Chairman of the Board and Board Committees, to be independent, unless a greater number is required to be independent under the rules and regulations of the ASX, the NYSE or any other applicable regulatory body.
Each year the Board, together with the Nominating and Governance Committee, assesses each Board director and his or her responses to a lengthy questionnaire on matters relevant to his or her independence according to the rules and regulations of Irish law, the NYSE and SEC as well as the Corporate Governance Council Principles and Recommendations published by the ASX Corporate Governance Council (the Principles and Recommendations). Following this assessment, the Board has determined that each Board director is independent.
All directors are expected to bring their independent views and judgment to the Board and Board Committees and must declare any potential or actual conflicts of interest. The Board has not set materiality thresholds for
assessing independence and considers all relationships on a case-by-case basis, considering the accounting standards’ approach to materiality and the rules and regulations of the applicable exchange or regulatory body.
The Board considered the following specific matters prior to determining that each director was independent:
- Brian Anderson is a director of Pulte Homes, a home builder in the United States. Pulte Homes does not buy any James Hardie products directly from the Company, although it does buy a small amount of James Hardie products through the Company’s customers and receives a rebate from James Hardie in respect of those purchases;
- Rudy van der Meer was until 1 January 2011 a member of the Supervisory Board of ING Bank Nederland N.V. and ING Verzekeringen (Insurance) Nederland N.V. Entities in the ING Group provide financial services to the Company. In each case those entities were providing these services to the Company prior to Mr van der Meer becoming a Board director; and
- David Dilger is a director of a number of James Hardie’s subsidiariesand receives directors’ fees for such service approved by the Board of James Hardie Industries SE. Any transactions mentioned above were conducted on an arms-length basis and in accordance with normal terms and conditions and were not material to any of the companies listed above or to James Hardie. Each of these relationships, other than Mr Dilger’s service as a director of a number of James Hardie’s subsidiaries, existed and was disclosed before the person in question became a Board director. It is not considered that these directors had any influence over these transactions.
Induction
The Company has an induction program for new directors, which was reviewed and updated during the fiscal year. The program includes an overview of the Company’s governance arrangements and directors’ duties in Ireland, the United States and Australia, plant and market tours to impart relevant industry knowledge, briefings on the Company’s risk management and control framework, financial results and key risks and issues, and meeting other Board directors, the CEO and members of
management. New directors are provided with comprehensive orientation materials including relevant corporate documents and policies.
Board continuing development
The Company operates within a complex industry, geographical and regulatory framework. The Company regularly schedules time at physical Board meetings to develop the Board’s understanding of the Company’s operations and regulatory environment, including updates on topical developments from management and external experts. An annual plant and market tour forms an important part of the Board’s continuing development.
Letter of appointment
Each incoming Board director receives a letter of appointment setting out the key terms and conditions of his or her appointment and the Company’s expectations of them in that role. We do not provide any
benefits for our Board non-executive directors upon termination of employment.
Chairman
The Board appoints one of its members as the Chairman. The Chairman must be an independent, non-executive director. The Chairman appoints the Deputy Chairman. The Chairman co-ordinates the Board’s duties and responsibilities and acts as the main contact with the CEO.
The Chairman:
- provides leadership to the Board;
- chairs Board and shareholder meetings;
- facilitates Board discussion;
- monitors, evaluates and assesses the performance of the Company’s Board and Board Committees; and
- is a member of and attends meetings of all Board Committees.
The Chairman may not also be the Chairman of the Audit Committee. The current Chairman is Mr Hammes and the current Deputy Chairman is Mr McGauchie.
Remuneration
A detailed description of the Company’s remuneration policies for directors and executives, and the link to performance, is set out in the Remuneration Report (PDF, 351K) within the Directors’ Report in the 2011 annual report.
Indemnification
The Company’s Articles of Association provide for indemnification of any person who is (or keep indemnified any person who was) a Board director, the company secretary, or an employee or any other person deemed by the Board to be an agent of the Company, who suffers any loss as a result of any action in discharge of their duties, provided they acted in good faith in carrying out their duties. This indemnification will generally not be available if the person seeking indemnification acted with gross
negligence or willful misconduct in performing their duties.
The Company and some of its subsidiaries have provided Deeds of Access, Insurance and Indemnity to Board directors and senior executives who are officers or directors of the Company or its subsidiaries.
Evaluation of management
At least once a year, the CEO, the Remuneration Committee and the Board review the performance of each member of the Group Management Team against agreed performance measures. The CEO uses this feedback to assist in the annual review of members of the Group Management Team. This process was followed during the fiscal year.
Information for the Board
Board directors receive timely and necessary information to allow them to fulfill their duties, including access to senior executives if required. The Nominating and Governance Committee periodically reviews the format, timeliness and content of information provided to the Board.
In discharging their duties, Board directors are provided with direct access to senior executives and outside advisors and auditors. The Board, Board Committees and individual directors may all seek independent professional advice at the Company’s expense for the proper performance of their duties.
The Board has regular discussions with the CEO regarding the Company’s strategy and performance, including two sessions each year where Board members formally review the Company’s strategy and progress. The Board and each Board Committee have also scheduled an annual calendar of topics to be covered to assist them to properly discharge all of their responsibilities.
Board directors receive a copy of all Board Committee papers for physical meetings and may attend any Board Committee meeting, whether or not they are members of the Board Committee. Board directors also receive the minutes which record each Board Committee’s deliberations and findings, as well as oral reports from each Board Committee Chairman.
Delegation to the CEO
The Board has delegated to the CEO the power to manage the business of the Company to achieve the mission statements and corporate goals approved by the Board from time to time. This delegation is subject to a specified monetary cap for a range of matters, above which Board approval is required.
