G2; VFF Board Charter

1. Purpose

This policy defines the duties, role, functions, composition and operation of the VFF Board and individual Directors. The purpose is to ensure that the Boards governance, reporting and operational processes deliver the VFF’s strategy and accountabilities and the integrity of Directors is maintained in accordance with the Corporations Act, 2001 and the VFF Constitution.

2. Background

The Board is accountable for the corporate governance and performance of the VFF, the VFF Property Trust and Farrer House Ltd.

The governing authority of the company is the VFF Board that comprises Directors that have legal duties, responsibilities and liabilities.

The Board and individual Directors are subject to the requirements and standards of the Corporations Act, 2001, the VFF Constitution, and all Board policies. 

The VFF maintains a constitution that must comply with the Corporations Act, 2001 and the requirements of the Australian Taxation Office and the Australian Securities and Investments Commission. Accordingly, the VFF Constitution is approved by members.

The VFF is a not-for profit company limited by guarantee. The VFF cannot operate for the personal benefit of members, equity cannot be held, dividends are not able to be paid, and no portion of assets or income can be transferred to members, either directly or indirectly.

VFF members are not shareholders and have a limited liability that is set by the Constitution. Each Member has a single voting right.

3. Policy

3.1 Board duties

The following duties must be delivered by the Board to ensure compliance with the Corporations Act, 2001 and the VFF Constitution.

3.1.1 To adopt appropriate accounting policies and implementing appropriate financial controls;

3.1.2 To ensure maintenance of financial records that explain the VFF’s transactions, position and performance;

3.1.3 To ensure that true and fair financial records are prepared and audited;

3.1.4  To ensure that effective audit, risk management and regulatory compliance programs are in place;

3.1.5  To determine and attest at a least annually whether in the Directors’ opinion, there are reasonable grounds to believe that the VFF will be able to pay its debts as and when they become due;

3.1.6 To determine that the financial statements and notes comply with accounting standards, and give a true and fair view of the financial position of the company and consolidated entity;

3.1.7  To ensure that a register is kept of all Members indicating to which Commodity Group (or Groups) to which each Member is registered;

3.1.9  To annually report the performance and activities of the VFF to Members; and

3.2 ROLE OF THE BOARD

The role of the Board is to promote and protect the interests of the VFF. In the performance of this task Directors commit to:

3.2.1 Guiding and monitoring the VFF’s businesses and affairs. Collectively overseeing and appraising strategies, policies and performance of the VFF using due care and diligence, and ensuring that its long term reputation and sustainability is assured;

3.2.2  Acting in good faith and in the best interests of the VFF as a whole by applying an independent mind to the Board’s work and decision-making, irrespective of the Group from which each Director is appointed;

3.2.3  Identifying and utilising individual Directors’ relevant skills, knowledge, experience and perspective on all discussions relating to the VFF;

3.2.4  Undertaking to serve the collective interests of Members, employees, customers and stakeholders with honesty and integrity;

3.2.5  Actively contributing to collective discussion, respecting the contributions of other Directors, and striving to understand their perspectives and contributions; and

3.2.6  Openly and constructively discussing issues, and being open to freely question or challenge the views presented at meetings.

3.3 BOARD FUNCTIONS

The Board has the following functions:

3.3.1  To develop and approve the corporate strategic plan;

3.3.2  To monitor the implementation and performance of the strategic plan;

3.3.3  To evaluate, approve and monitor the annual budget and business plan;

3.3.4  To approve and monitor internal policies and delegations of authority;

3.3.5  To appoint and remove the Chief Executive Officer;

3.3.6  To appoint an acting Chief Executive Officer to carry out the duties of the Chief Executive Officer during the absence from duty of the Chief Executive Officer;

3.3.7  To appoint the Company Secretary, that is the Chief Executive Officer unless the Board resolve otherwise;

3.3.8  To annually review and evaluate the performance of the Board, Directors, Board Committees, and the Chief Executive Officer;

3.3.9  To appoint the Victorian Farmers Federation Property Trust Limited or other trustee as trustee of the property and funds of The Federation and from time to time, if thought fit, remove any such trustee and appoint another or others in its or their place;

3.3.10 To set VFF Membership types and fees;

3.3.11 To co-ordinate the activities and external policy of the Federation; and

3.3.12 To admit any person to Honorary Life Membership of The Federation or award a Certificate of Merit in recognition of the distinguished service rendered to the Federation.

3.4 BOARD MEMBERSHIP, SKILLS AND TERM

The composition of the Board, pursuant to the Constitution, is:

3.4.1 The VFF Board consists of nine (9) Director positions.

The VFF President

The VFF Deputy President

Two Independent directors appointed on the basis of their skills

One Director to be nominated by each of the following commodity groups of the VFF

• • • Grains
    • Horticulture
    • Livestock
    • United Dairy Farmers

One Director nominated by the intensive industry commodity group of the VFF that comprises the

• • • Chicken Meat
    • Eggs
    • Pigs

3.4.2  Directors are appointed for two year terms. The President, Vice President and Directors from the Livestock Group, the United Dairy Farmers of Victoria and one Special Skills Director’s term as Director shall expire in even numbered years;

3.5 CHAIR AND DEPUTY CHAIR

3.5.1  The Board Chair is the VFF President as of right and who is appointed by a vote of VFF members in accordance with the Constitution;

3.5.2  The Board Deputy Chair is the VFF Vice President as of right who is appointed by a vote of VFF members in accordance with the Constitution;

3.5.3  At the request of the President, the Board may appoint a Board Director as an alternative Chair for a prescribed period; and

3.5.4  The Board Chair as President shall not be eligible for reappointment for more than 2 consecutive terms.

3.6 SPECIAL SKILLS DIRECTORS

3.6.1  Special skills Directors are nominated by the Nominations Committee to the Board following consideration of the mix of Director skills;

3.6.2  Special Skills Directors shall not be VFF employees or similarly contracted; and

3.6.3  One Special Skills Director shall meet the skills requirements as a qualified accountant or financial auditor with current CPA or CA accreditation unless another Director (excluding the Board Chair) has this skill.

3.7 COMMODITY DIRECTORS

3.7.1  Each of the Grains, Horticulture, Livestock, United Dairy Farmers and Intensives Commodity Groups shall within 10 days of an election, make up to 2 nominations for consideration by the Nominations Committee. Where the Commodity Group provides 1 nomination, that nomination will be appointed to the Board as of right;

3.6.2  Commodity Directors may be VFF Members, but shall not be VFF staff; and

3.7.2  One nominee from each Commodity Group may be nominated by the Nominations Committee to the Board following consideration of the mix of Director skills;

3.8 BOARD COMMITTEES

3.8.1  The Board must maintain a standing Committee to provide oversight of financial and fiduciary matters, and may create other Committees to assist the Board;

3.8.2  Board Committees do not have decision making delegations and operate in accordance with Terms of Reference approved by the Board;

3.8.3  Committee members are appointed by the Board and may include Board Directors, other VFF members, or other independent persons;

3.8.4  The Committee Chair is appointed by the Board from Committee members;

3.8.5  The Board Chair has the as of right discretion as an ex-officio member of any Committee;

3.8.6  VFF staff shall not be Board Committee members; and

3.8.7  Established Board Committees are:

• Risk, Audit and Finance Committee
• Governance and Strategy Committee
• Policy Council
• Nomination Committee

 3.9 NOMINATION COMMITTEE

3.9.1 The Nomination Committee is an ad hoc Committee that is convened by the President as required and comprises:

• VFF President (Committee Chair)
• A nomination from the Board
• An independent consultant appointed by the Board
• The VFF CEO provides secretarial support but is not a Committee member

3.9.2  The Nomination Committee provides nominations to the Board following consideration of the mix of Director skills;

3.9.3 The Board considers the nominations provided by the Nominations Committee before making a resolution to appoint Directors.

3.10 DIRECTOR SKILLS

3.10.1 The Nominations Committee must consider the result of the previous review of Board performance and the following list of skills and experience when nominating Directors for appointment to the VFF Board:

• Qualified accountant or financial auditor with current CPA or CA accreditation
• Commercial property management
• Not for profit corporate governance, including Corporations Act, 2001 and ASIC requirements
• Advocacy
• Membership development and management
• Agricultural production
• Government, policy and legislation
• Media and communications
• Food processing and FMCG supply chain management
• Retail business and consumer requirements.

3.11 DIRECTOR ORIENTATION

3.11.1 The CEO facilitates orientation of new Directors for their role on the VFF Board that may include the appointment of an existing Director as a mentor.

3.11.2 As part of the induction process, new Directors are provided with an induction manual which provides an overview of VFF Director accountabilities and VFF functions.

3.12 MEETINGS

3.12.1 The Board meets a minimum of 6 times per year at a time and place determine by the Board;

3.12.2 A quorum for a Board meeting is 5 or more Directors;

3.12.3 Meetings may be held in person or via any means of technology determined by the Board, with hybrid attendance permitted. A member who participates through any technological method will be taken to be present and count towards the quorum;

3.12.4 With a quorum in attendance, meetings will be presided over by the Chair, or if absent by the Deputy Chair, or if both are absent by a Director that is present that is elected by Directors that are present;

3.12.5 VFF Management may be invited by the Chair to attend appropriate sections of Board meetings;

3.12.6 The Chairperson is responsible, in consultation with the Chief Executive for the conduct of all Board meetings. This includes being satisfied that the agendas are comprehensive, that all agenda items are appropriate and that resolutions fit within the context of the VFF strategic plan.

3.12.7 Board papers should be clear, succinct and provide relevant information on financial and operational matters and circulated at least 7 days prior to the meeting;

3.12.8 Directors are expected to prepare adequately, attend, and participate at Board meetings and Committee meetings.  Meetings are normally held at the Farrer House with the exception of Board site visits.

3.12.8 Board resolutions are made by the majority of votes cast at a meeting at which a quorum is present, with the Chair or person presiding at a Board meeting having a deliberative vote and if the voting is equal, a casting vote;

3.12.9 Once a Board resolution is made, all Directors are bound to support the decision;

3.12.10 A record as minutes of all meetings must be kept. Meeting minutes are the legally required official record of who was in attendance, what decisions were made and agreed actions, and all other consequential events that occurred during the Board meeting. Minutes should not be a verbatim account of every commentary in the meeting.

3.12.11 Directors should raise any issues with the draft minutes of previous meetings provided as the attachments Board papers at the next meeting. When minutes are approved by the Board they are signed by the Chair and may not be further amended. When finalised, minutes along with Board papers are retained in archive indefinitely while the entity exists.

3.12.12 Directors may make notes about Board papers and meetings and have a responsibility to ensure the confidentiality of electronic and hardcopy Board papers. All hardcopy and electronic copies of these papers and reports must be destroyed after use as they are subject to legal discovery processes.

3.13 DIRECTOR ETHICS

3.13.1 Directors are expected to observe the highest standards of ethical behaviour, including personal integrity and honesty in their dealings;

3.13.2 A Director shall, in good faith, behave in a manner that is consistent with generally accepted procedures for the conduct of the meeting at all meetings of the Board.

3.13.3 Directors are expected to be forthright in board meetings and have a duty to question, request information, raise any issue, fully canvas all aspects of any issue under consideration by the VFF and cast their vote on any resolution according to their own decision, free from fear or favour.

3.13.4 Directors must act in the in the best interests of the VFF, in a financially responsible manner, with a reasonable degree of care, diligence and skill, and in compliance with the Corporations Act, 2001 and the VFF Constitution;

3.13.5 Outside the boardroom, directors will support the letter and spirit of board decisions in discussions with all other parties;

3.13.6 Directors will keep confidential all board discussions and deliberations.

3.13.7 As a non partisan agency, if a Director is a candidate for election to the Parliament of the Commonwealth, state or local government, they must notify the Chair of that fact and are suspended from their position from the day declaration or endorsement until the close of the poll, and must not use any resources of the public entity in connection with his or her candidature; If the Director is elected or appointed to a government parliamentary, advisory or policy role, the Director is required to resign their VFF Directorship; and

• A Director must not:
• Give to any other person, directly or indirectly, any information acquired through being a Director (apart from when carrying out functions authorised, by the Board); or
• improperly use his or her position, or any information acquired through that position, to gain a personal advantage, or for the advantage of another person, or to cause detriment to the VFF.

3.14 CONFLICTS OF INTEREST OR DUTY

3.14.1 The VFF uses a risk-based approach to managing conflicts of interest. This approach acknowledges that conflicts cannot always be avoided and while there is nothing unusual or necessarily wrong in having a conflict of interest, if not managed appropriately, they can undermine confidence in and damage the reputation of organisations and individuals.

3.14.2 The VFF is proactive in assessing and managing conflicts of interest risks, including conflict risks that could bring the reputation of an organisation into disrepute.  In keeping with this risk-based approach, Directors are required to:

• Avoid conflicts of interest and duty wherever possible;
• Identify and declare or nominate any conflicts; and
• Ensure that conflicts are actively managed.

3.14.3 Defintions:

1. Conflict of interest – is where an employee has private interests that could improperly influence, or be seen to influence, their decisions or actions in the performance of their public duties. A conflict exists whether it is actual, potential or perceived.

Private interests may be:

• pecuniary (i.e. financial), which includes any actual, potential or perceived financial gain or loss; or
• non-pecuniary, which includes any tendency toward favour or prejudice resulting from:
  • family or personal relationships e.g. friends, enemies, and including intimate or romantic relationships, e.g. spouse or defacto partner and causal or periodic romantic relationships;
  • sporting, cultural or social activities; or
  • a past or present employment association, which may give rise to conflict of loyalty, affecting a Director’s ability to make an impartial decision in the best interests of the VFF.

1. Conflicts of duty – arises when a Director is required to fulfil two or more roles that are or may be in conflict with each other.

3.14.4 Both individual Directors and the Board have responsibilities relating to the management of conflicts. It is an individual director’s responsibility to:

• Regularly consider the relationship between their private interests and duties in order to identify any conflict;
• Take reasonable steps to restrict the extent to which a private interest could create a conflict by actually or potentially compromising or being seen to compromise their impartiality when carrying out their duties; and
• Manage and declare their interests. 

3.14.5 It is the responsibility of the Board and the Chair, once a conflict is declared (or identified by another Director if the relevant Director fails to declare it) and made known to them, to determine how to effectively manage the conflict in the best interests of the VFF and in accordance with this policy. Usually a declaration of a conflict would mean the Director removes themselves from the discussion of that agenda item and participation in any decision making.

3.14.6 The VFF has developed the following processes and tools to ensure conflicts of interest and duty are identified and effectively managed by Directors and the Board.

Declare Private Interests –

Directors must declare their private interests by completing a Declaration of Interest Form:

• on commencing their position on the Board;
• annually; and
• whenever a change occurs to their private interests;

• Register of Interests – Private interests that are declared by Directors are recorded by the Secretary onto a Register of Interests together with details on how any potential/actual conflict will be managed.  The Register of Interests is regularly updated and provided to the Board to review at each Board meeting.

• Disclosure of Conflicts – at the commencement of each Board or Committee meeting, Directors must declare if they have a conflict (potential, actual or perceived) in relation to any matter to be discussed at the meeting.  A Director may also query if another Director has a conflict and these matters should be discussed by the Board before a determination is made.
• Record of conflicts – the Board Secretary will record any conflicts that are declared and how they are managed in the minutes of meeting, which are provided to Board members to review at the next Board meeting.
• Manage Conflicts – when a Director identifies a potential/actual/perceived conflict at a Board meeting, the Board and Chair will determine:
  • if the conflict is material; and
  • how to effectively manage the conflict in the best interests of the VFF and in accordance with its obligations and Board policy. Where the conflict is material, the main options are:
    • restrict the Director’s involvement in the matter;
    • the Director removes themselves or they are removed from discussion and/or decision-making; or
    • the Director relinquishes the interest that is creating a conflict.

3.14.7 The following questions guide Directors consideration for themselves and others when identifying of managing a Conflict of Interest or Conflict of Duty. Does the conflict:

• Affect the VFF’s ability to act efficiently, honestly and fairly towards employees, members and key stakeholders?
• Compromise the quality of services provided to VFF members and key stakeholders?
• Make members, key stakeholders, or regulators question “why weren’t we told”?
• Adversely affect responsible management of risks?
• Increase operational costs above what is reasonably necessary for the effective management of the VFF?
• Cause the VFF to breach the Corporations Act, 2001, the Constitution or a duty owed to one or more of its members or stakeholders generally?
• Breach a VFF Board policy?
• Cause or risk a contractual or legal dispute?
• Create a private profit or advantage from information obtained in governing the VFF

3.15 ACCESS TO INDEPENDENT PROFESSIONAL ADVICE

Directors require high quality information and advice on which to base their decisions and considerations.

3.15.1 The Board collectively, and each director individually, has the right to seek independent professional advice, subject to the approval of the Chair, or in the Chair’s absence, the Board.

3.15.2 Where a Director considers it necessary to obtain independent financial or legal advice, payment for this advice will be the responsibility of the VFF provided that the approval of the Chair is obtained prior to seeking the advice.  The Director seeking the advice must make the advice available to all directors upon request.

3.16 PERFORMANCE REVIEW

3.16.1 The Board conducts an annual review of Board and Director performance, including an assessment of the appropriate mix of Director skills and experience to identify appropriate areas for training and development; and

3.16.2 The review may be a self-assessment, after consideration of whether an external review is warranted.

3.17 DIRECTOR DEVELOPMENT

3.17.1 Directors are appointed to the Board with the expectation that they are able to contribute relevant skills and experience;

3.17.2 All Directors are encouraged to undertake continual professional development to ensure the continuous improvement of the Board as a whole.  Specifically, where skill gaps are identified, directors are encouraged to participate in appropriate training or mentoring;

3.17.3 Directors are encouraged to reflect and identify individual and collective strategies and options for improving skill development and knowledge; and

3.17.4 The cost for Director professional development rests with the Director seeking the professional development unless otherwise approved by the Board.

3.18 DIRECTOR FEES

3.18.1 Director roles attract the following annual fee for provision of Director services;

• Chair                            $40,000
• Deputy Chair                 $7,000
• Special Skills Director    $25,500
• Commodity Director      $7,000

4. Accountability

VFF CHAIR

VFF CEO

5. Related policies/procedures

Policy G1; VFF Strategy and Policy Framework

Policy G3; Risk, Audit and Finance Committee Terms of Reference

Policy G4: Governance and Strategy Committee Terms of Reference