Vector > Corporate > Investor relations > Governance > Board of Directors

Board of Directors

The Board of Directors has statutory responsibility for the affairs and activities of Vector which, in practice, is achieved through delegation to the chief executive and management of Vector.
 
Roles and responsibilities
The board has formalised its roles and responsibilities in a board charter. The charter clearly defines matters that are reserved for the board, and those that the board has delegated to management.
The board is responsible for:
  • charting the direction, strategies and financial objectives of Vector and monitoring the implementation of those policies, strategies and financial objectives;
  • monitoring compliance with regulatory requirements and ethical standards;
  • appointing and reviewing the performance of the chief executive officer; and
  • protecting and enhancing the value of the assets of Vector.
  • Vector’s chief executive and management are responsible for:
  • developing and implementing company strategies and making recommendations on specific strategic initiatives;
  • management and implementation of the risk management strategy set out by the board;
  • formulation and implementation of policies and reporting procedures for management;
  • implementation of the delegated financial authority policy; and
  • the day-to-day management of the company.
Powers specifically reserved for the board are:
  • appointment of the chief executive officer and determination of his or her terms and conditions (including remuneration);
  • any matters in excess of discretions that it may have from time to time delegated to the chief executive officer and management in relation to transactions, market risk limits and expenditure;
  • approvals of each of the following:
    • the budget and business plan, at least annually;
    • the acquisition, establishment, disposal and cessation of any significant businesses of Vector *
    • the issue of any securities in the company *; and
  • review of Vector’s performance against strategic objectives.
(*Which also requires shareholder approval in certain circumstances)
 
Composition
The size and composition of the board is subject to the limits imposed by Vector’s constitution. The constitution requires the board to comprise between three and nine directors of which two must be ordinarily resident in New Zealand. As at 30 June 2010, the board comprised nine directors, all of whom are non-executive directors.
 
At least one third of all directors are required to retire at each annual meeting. These will be either those directors wishing to retire or those who have been longest in office since their last election. There is no maximum term which a non-executive can remain a director.
 
An independent director is, in summary, one who has no relationship with Vector (either directly, through associated persons or as a partner, shareholder or executive officer of an organisation that has a material relationship with Vector) that could compromise his or her ability to exercise unfettered judgment. Only independent directors are eligible to be the board chairperson. As at 30 June 2010, the board has determined the following directors to be independent directors: Michael Stiassny, Peter Bird, Tony Carter, Hugh Fletcher, James Miller, Alison Paterson and Bob Thomson. James Carmichael and Karen Sherry are not independent directors as they are also trustees of the Auckland Energy Consumer Trust (AECT), Vector's majority shareholder.
 
Information and advice
All directors are expected to continuously inform and educate themselves to ensure that they can appropriately and effectively perform their duties.
 
A director is entitled to seek independent advice at company expense if he or she perceives an irregularity in a company related matter. The chairman must be advised beforehand, and the advice must be made available to the rest of the board.
 
Accountabilities
Directors minimise the possibility of conflict of interest in their involvement with Vector by restricting their involvement in businesses that could lead to a conflict of interest. Where conflicts do exist, the nature of their interest is disclosed to fellow directors and, where appropriate, directors excuse themselves from discussions in respect of those interests, and do not exercise their right to vote in relevant matters.
 
Directors are subject to limitations in their ability to buy and sell Vector securities by Vector’s insider trading policies and the Securities Market Act 1988. All changes in Vector security holdings by directors are reported to the board and the NZX.
 
Board remuneration
Vector directors do not participate in an executive remuneration or share scheme. Directors do not receive any options, bonus payments or any incentive based remuneration. The company does not have a scheme for retirement benefits to give directors.
 
Board performance
The board reviews its performance and the individual performance of each director annually, with the assistance of professional advisers.