2012 Annual Report

OVERVIEW

Abano Healthcare Group is listed on the New Zealand Stock Exchange. The Board of Abano is responsible for the corporate governance of the Company. The Board does this in line with internationally accepted best practice, and the Company’s corporate governance policies fully comply with the NZX Corporate Governance Best Practice Code.

Recent court cases have highlighted the high standard of oversight and responsibility required by directors. In addition, the proposed revamp of the Securities Act has stimulated discussion around director responsibilities and the heightened level of director risk and liability. It is important to ensure that overly onerous responsibilities do not build a barrier to obtaining and retaining a high calibre of directors. In addition, directors must be appropriately compensated for the level of due diligence, non-delegable tasks and risk involved in carrying out their duties.

We believe in diversity within our businesses, and recognise the value in different viewpoints and perspectives offered by people of different ages, race and gender. We have a strong representation of female directors on our Board (two out of seven directors), as well as many female senior executives in our business teams.

To view the full 2012 Corporate Governance Statement, click here (PDF).

BOARD MEMBERSHIP

In July 2011, Mr Ted van Arkel was appointed to the Board as an independent director. In line with company policy, he resigned and was reappointed by shareholders at the annual meeting in November 2011. At that same meeting, Alison Paterson stepped down as chair and announced her planned resignation from the Board at the 2012 annual meeting. Trevor Janes has been appointed as independent chair and Susan Paterson as independent deputy chair.

The Board currently consists of five independent directors, one executive director and the managing director.


BOARD MEETINGS

In the course of the financial year, there were 11 monthly Board meetings and two additional Board meetings, three risk assurance and audit committee meetings and three remuneration committee meetings.

REMUNERATION

Directors’ fees were approved at the 2010 annual meeting. All non-executive directors receive $50,000 per annum, each committee chair receives a further $10,000 per annum, with the deputy chairman receiving $75,000 per annum while the chairman receives $100,000 per annum. In addition, there is a $50,000 allowance to provide flexibility to remunerate non-executive directors who assume additional responsibilities not normally expected in the ordinary course of business. This was not utilised during FY12.


Directors' Fixed Trading Share Plan

In June 2012, the Abano Board approved the implementation of a new director remuneration arrangement, whereby 50% of after tax director fees for non-executives directors will be paid in shares, which will be acquired on market on a quarterly basis. The Board believes that directors should own shares in the Company, and this plan will further align directors’ interests with those of our shareholders. This policy is in line with NZX Corporate Governance Best Practice Code whereby directors are encouraged to invest a portion of their cash remuneration in the Company’s shares.

Executives' Long Term Performance-based Share Scheme

In FY12, the Board approved a new long term performance based share scheme for the managing director and chief financial officer/chief operating officer, on materially similar terms to the 2008 scheme approved by shareholders. The scheme further aligns management’s interests with those of shareholders, and encourages management to ensure the company performs well, through long term growth and increasing shareholder value. The Board believes it is important to motivate and retain our key executives, and provide performance incentives which allow executives to share the rewards of the success of the company.
 

DIRECTORS' USE OF INFORMATION

No member of the Abano Board or its subsidiaries issued a notice to use information received by them in their capacity as directors, which would not otherwise have been available to them.