Board Charter

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1. BOARD MISSION

The Corporate Governance Framework  for Public Bodies in Jamaica provides that:

“The Board is collectively responsible for strategic management and oversight, serves as the focal point for Corporate Governance and is accountable to the Responsible Minister & Shareholder representatives.

The Board is responsible to ensure compliance with the Public Bodies Management & Accountability Act, and other applicable legislation and Government of Jamaica policies.”

2. BOARD’S ROLE:
 2.1 Role of the Board

 The Board is governed by the Corporate Governance Framework for Public Bodies in Jamaica 2012, the Companies Act 2004 and the Public Bodies Management and Accountability Act 2012.

Every Board Must:

      1. take the necessary steps to ensure efficient and effective Management of the Public Body;
      2. ensure the accountability of all persons who manage resources of the public body;
      3. develop adequate information, control, evaluation and reporting systems within the body;
      4. develop specific and measurable objectives and performance targets;
      5. advise the responsible Minister on matters of general policy relating to the management of the Public Body;
      6. notwithstanding the provisions of any relevant enactment or constituent document, enter into a performance contract with its Chief Executive Officer (or person performing like duties, by whatsoever title designated), on terms approved by the responsible Minister and Minister;
      7. comply with requests from the financial secretary in the time specified, to supply information on the financial operations of the company; and
      8. ct in accordance with the policies and guidelines issued from time to time by the Minister in respect to emoluments payable to the staff of the Company.
      9. deliver a draft and final Corporate Plan each year.

The Board shall also:

      1. set Petrojam’s values and ethical standards and ensure that its obligations to stakeholders are understood and met;
      2. regularly review with Management, the strategic environment, the emergence of new risks and opportunities and the implications for strategic direction;
      3. approve strategic and corporate plans that take into account Petrojam’s major risks and opportunities and oversee the management of those risks;
      4. facilitate discussions and approval of financial operations, policy issues, corporate governance principles and all other matters relating to the effective and efficient operations of Petrojam;
      5. facilitate effective governance of the affairs of Petrojam;
      6. ensure that adequate and effective policies and systems are in place to monitor financial reporting, internal control processes and that there is a reliable framework to continuously identify, prioritise, control and mitigate risk that can impact Petrojam.
3. BOARD COMPOSITION; APPOINTMENT, TERM, QUORUM & TRAINING:
 3.1 BOARD PROFILE, SIZE, AND INDEPENDENCE:
3.1.1 Board Profile:

The Board composition shall fulfil the Board Competency Profile Instrument developed by the responsible Ministry.

3.1.2 Number of Members:

The Board composition shall fulfil the Board Competency Profile Instrument developed by the responsible Ministry.

3.2 BOARD APPOINTMENT, TRAINING, QUORUM AND TERM:
3.2.1 Appointment of Directors:

All Directors shall be appointed by the Responsible Minster after consultation with the Cabinet.

3.2.2 INDUCTION PROGRAMME,ONGOING TRAINING AND EDUCATION:
Director Induction Programme:

Upon appointment, each Director shall participate in an induction programme that covers Petrojam’s  strategy, general financial and legal affairs, financial and regulatory reporting by the Board, any specific aspects unique to Petrojam and its activities, and the responsibilities and expectations of a Director.

3.2.3 Quorum:

The quorum is a majority of Board members established as sixty percent (60%) rounded up to the nearest whole number.

3.2.4 Resignation:
        1. A member of the Board, other than the Chairman, may at any time resign his or her office by instrument in writing addressed to the Minister and transmitted through the Chairman and from the date of receipt by the Responsible Minister of such instrument, the Director shall cease to be a member of the Board.
        2. The Chairman may at any time resign his office through instrument in writing addressed to the Responsible Minister and the resignation shall take effect from the date of receipt by the Responsible Minister.
4. BOARD COMPOSITION; APPOINTMENT, TERM, QUORUM & TRAINING:

4.1   The Chairman of the Board is primarily responsible for the activities of the Board and its committees; and is the principal contact for the General Manager who shall meet regularly with the Chairman.

4.2   The Chairman of the Board is also responsible for maintaining communication protocols with the Responsible Minister, Permanent Secretary and other stakeholders as established by the Ministry of Finance & the Public Service.

4.3   The Chairman presides over the meetings of the Board and in the absence or inability of the Chairman to act, the members present and constituting a quorum shall elect one of the members present to perform the functions of the Chairman.

4.4   The Chairman ensures that:

      1. Directors, when appointed, participate in an orientation programme and, as needed, additional education or training programmes;
      2. the Directors receive all information necessary for them to perform their duties;
      3. the Directors have sufficient time for consultation and decision-making;
      4. the committees function properly and according to their respective Terms of Reference;
      5. the performance of the overall board, individual directors and committees are evaluated at least once every year;
      6. the Board establishes and maintains the agreed protocols for communication with the organisation’s business office;
      7. the Board establishes operating procedures for its meetings;
      8. he/she provides adequate direction to the Corporate Secretary;
      9. the Board fulfils its duties to all key stakeholders and promotes sustainability;
      10. the agendas of Board meetings are in order and that minutes are kept of such meetings;
      11. internal disputes and conflicts of interest concerning individual Directors are addressed and resolved.
5. DIRECTORS:
 5.1 Role of a Director:
As a member of the Board, each Director shall:
      1. through the exercise of due diligence, fulfil the legal requirements and obligations of a Director in discharge of his/her fiduciary duties, namely: to act honestly and in good faith in the best interests of Petrojam and to exercise the due diligence and skill that a reasonably prudent person would exercise in comparable circumstances;
      2. recognize the Board’s accountability to stakeholders in the governance of Petrojam and ensure that the best interests of Petrojam are considered paramount;
      3. devote sufficient time to Petrojam’s affairs;
      4. assist Petrojam in the achievement of corporate strategic objectives;
      5. ensure that he or she, and the Board as a whole, acts in the best interests of Petrojam rather than in the interests of an individual Director or any other interests;
      6. monitor his or her continued ability to meet these expectations;
      7. participate in  additional education or training programmes as required; and
      8. shall, if requested, join a Committee of the  Board.
 5.2 Duty of Care:

5.2.1   Every Director in exercising his powers and discharging his duties shall:

        1. act honestly and in good faith with a view to the best interest of the company; and
        2. Exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances, including but not limited to the general knowledge, skill and experience of a Director.

5.2.2   A Director shall not be in breach of his duty under this section if the Director exercised due care, diligence and skill in the performance of that duty or believed in the existence of facts that, if true, would render the Director’s conduct reasonably prudent.

5.2.3   A Director shall be deemed to have acted with due care, diligence and skill where, in the absence of fraud or bad faith, the Director reasonably relied in good faith on documents relating to the company’s affairs, including financial statements, reports of experts or on information presented by other Directors or, where appropriate, other officers and professionals.

5.2.4   In determining what are the best interests of the company, a Director may have regard to the interests of the company’s shareholders and employees and the community in which the company operates.

5.2.5   The duty imposed on the Directors is owed to the company alone.

5.3 Specific Conduct as a Director:
To enable the Board to discharge its collective responsibilities for stewardship, including oversight and strategic leadership, each Director shall:
      1. conduct himself or herself honestly, fairly, ethically and with integrity;
      2. contribute views based on his or her unique skills and experience;
      3. monitor potential conflicts of interest he or she may have regarding any matters before the Board;
      4. declare any potential conflicts promptly to the Board and abstain from discussion and voting on any related matter; and
      5. adhere to Petrojam’s Code of Ethics
5.4 Duty to act properly:
A Director who becomes aware of circumstances which are or are likely to be perceived as likely to detract from his or her ability to act in accordance with his or her fiduciary duty, shall forthwith report such circumstances to the Board through the Chairman. The need to take such action may arise in the following circumstances:
      1. a change in affiliation or employment;
      2. being appointed to any position that creates, or appears to create inherently conflicting responsibilities; or
      3. being unable to attend or participate in Board and Committee meetings consistent with the established standard.
5.5 Notice of Outside Positions:
Directors must inform the Board of their other positions which may be give rise to a conflict of interest or affect the performance of their duties as a Director. If the Board determines that there is a risk of a conflict of interest, the matter shall be fully discussed by the Board.
6. BOARD’S ROLE:
 6.1 Attendance of Directors:

 Directors are expected to attend and actively participate in meetings of the Board and the committees on which they serve, and to meet as frequently as necessary to properly discharge their duties.

6.2 Extended Absence:

A Director who needs to be absent from Board meetings for more than three consecutive meetings, shall be required to explain to the Chairman of the Board or the Committee (as applicable) the reason for such absence.

7. CONFLICTS OF INTEREST OF DIRECTORS: 
7.1 Duty to Disclose: 
    1. A director who is directly or indirectly interested in any matter which is being dealt with by Board:
      1. shall disclose the nature of his interest at a board meeting; and
      2. shall not take part in any deliberation of the Board with respect to that matter.
7.2 Abstention by Conflicted Party:

Where conflicts of interest do occur, Directors must recuse themselves from the discussions in respect of those interests and shall not take part in any discussion or decision-making regarding any subject or transaction in which there is a conflict of interest with Petrojam or exercise their right to vote in respect of such matters.

7.3 Requirements to Approve Conflicts of Interest:

All transactions in which there are conflicts of interest with Directors shall be agreed on terms that are customary for ‘arm’s-length’ transactions in Petrojam’s business. Decisions to enter into transactions in which there are conflicts of interest with Directors require the approval of the Board.

8. CONFIDENTIALITY:
 8.1 Principle of Confidentiality:

 Directors are expected to attend and actively participate in meetings of the Board and the committees on which they serve, and to meet as frequently as necessary to properly discharge their duties.

8.2   As a general rule, each Director shall keep all Confidential Information confidential and no Director shall use Confidential Information for personal gain or use. This obligation survives the termination or resignation of a Director as a Director of Petrojam.

8.3   Unless required to do so by law, no Director shall, during membership on the Board or afterwards, disclose any information of a confidential nature regarding the business of Petrojam, that came to the person’s knowledge in the capacity as a Director and which the person knows or should know to be of a confidential nature.

8.4   A Director may disclose such information to fellow Directors as well as to staff members of Petrojam who, in view of their activities for Petrojam, should be informed of the information.

8.5   A Director shall not use such Confidential Information for personal benefit.

8.6 Disclosure:

 If disclosure of confidential information is required, this disclosure may only be done by the Chairman of the Board.

9. CONFIDENTIALITY:

 Directors are remunerated in accordance with Ministry of Finance & Public Service Circulars in effect.

10. GENERAL MANAGER/CHIEF EXECUTIVE OFFICER:

10.2   The General Manger’s role is to manage the day to day affairs of Petrojam and report directly to the Chairman of the Board.

10.3   The General Manager reports to the Board through the Chairman.

10.4   The General Manager should be held accountable by the Board for the performance of the company and the implementation of the Board’s strategy and policy in accordance with mutually agreeable and written performance objectives which are outlined in the Corporate Plan.

11. CORPORATE SECRETARY:
    1.  
11.1 Appointment:

The Board shall appoint a Secretary who shall report directly to the Board through the Chairman of the Board. The Corporate Secretary should be subjected to similar requirements of “Fit and Proper” requirements as a new director, being an officer of the company and a key governance fiduciary.

11.2 Role:

The Secretary is the secretary of the Board and its Committees and assists the Board in the execution of critical administrative and governance functions which demand a high degree of compliance and ethical conduct.

11.3 General Access:

All Directors may go to the Secretary for advice.

11.4 Key Responsibilities:
      1. The Secretary shall assist the Chairman of the Board in developing the annual Board work plan, co-ordinating the evaluation of the Board and its members; and organizing the Board’s activities (including providing information, preparing agendas, reporting of meetings, evaluations and training programmes).
      2. The Secretary should prepare and circulate Board minutes and board papers.
      3. The Secretary is to act as the chief governance advisor to the board and will guide the board on all matters related to corporate governance, effective operations of the board, regulatory compliance and ethical standards.
12. COMMITTEES, MEMBERSHIP & REPORTING:
12.1 Establishment of Committees:
      1. The Secretary shall assist the Chairman of the Board in developing the annual Board work plan, co-ordinating the evaluation of the Board and its members; and organizing the Board’s activities (including providing information, preparing agendas, reporting of meetings, evaluations and training programmes).
      2. To support the Board in effectively performing its duties the Board may from time to time establish Sub-Committees and the Board shall determine the members of any such Committees.
        •  Audit
        • Finance
        • Human Resources
        • Procurement
        • Corporate Governance
      3.  Notwithstanding the provisions of clause 12.1(b), the Board may establish additional Committees as deemed necessary.
      4. The Chairmen of Board Committees shall be chosen by the Board and shall be members of the Board.
      5. The Chairman of the Board is an ex-officio member of all committees except the Audit Committee.
      6. A Committee may include persons who are not Directors (hereinafter referred to as Co-opted Committee Members) but at least one half of the members of such committee shall be Directors.
      7. The validity of the proceedings of a Committee shall not be affected by any vacancy among the members thereof or any defect in appointment of a member thereof.
12.2 Co-opted members & Invitees:
      1. The Board, may co-opt such persons as it deems fit to serve on Committees established by the Board.
      2. Co-opted Committee Members have the same rights and privileges at Committee meetings as other members of the Committees including the right to vote.
      3. Invitees to meetings shall not constitute part of the quorum and shall not be entitled to vote.
12.3 Board Responsibility for Committee Action:
      1. The Board remains collectively responsible for the decisions and actions taken by any Committee.
12.4 Committee Reporting:
      1. Each Committee must promptly inform the Board of major developments of which it becomes aware.
      2. Each Director shall have unrestricted access to all Committee meeting records.
      3. The board shall, as set forth in the Terms of Reference of the Committee concerned, receive a report from the Committee describing the Committee’s actions and findings.
12.5 Committee Terms of Reference:
      1. The Board shall establish, and may by resolution, amend the Terms of Reference (TOR) for each Committee.
      2. The TOR shall indicate the role and responsibilities of the Committee, its composition, structure, quorum requirements and how it should perform its duties.
13. ANNUAL  EVALUATION
 13.1 Board & Director Evaluation:

The Board will conduct an annual performance evaluation of each Director, the board on a whole, the Chairman and its committees. The evaluation process will be conducted in accordance with procedures established by the board which are guided by the Ministry of Finance & Public Service board evaluation systems. The performance evaluation shall be in line with Petrojam’s set goals and objectives and may also include setting out the goals and objectives of Petrojam for the upcoming year.

14. STRUCTURE OF BOARD MEETINGS:
 14.1 Notice, Agenda and documents:

To ensure proper review of all materials being used at the Board meetings a notice of each meeting together with an agenda and meeting documents shall be circulated to all Directors at least seven (7) clear days prior to the meeting.

14.2 The Chairman shall consult with the General Manager prior to convening the meeting on the content of the agenda and the General Manager and Directors shall have the right to request that an item be placed on the agenda for a Board meeting provided that the item is notified to the Chairman at least eight days prior to the meeting.

15. VENUE FREQUENCY OF MEETINGS & ATTENDANCE:
 15.1 Venue of Meetings:
Board meetings are generally held at the offices of Petrojam but may also take place at such places and times and on such days as the Board may determine.

15.2 In addition, meetings of the Board may be held by conference call, video conference or by any other means of communication, provided all participants can communicate with each other simultaneously.

15.3 The Board may have closed sessions which exclude the Corporate Secretary and the Management representatives during a Board Meeting. Closed sessions are at the discretion of the Chairman. Decisions taken during closed sessions must be included in the minutes.

15.4 Frequency of Meetings:

The Board shall meet at least four (4) times for the year.

15.5 An annual schedule of Board meetings for the following year shall be agreed by the Board and circulated to Directors at the start of each year. The Chairman may convene meetings outside of scheduled meeting times as may be necessary and expedient for the transaction of business.

15.6 Individual Vote:

Each Director has the right to cast one vote.

15.7 Majority Vote:

Except as provided at Clause 15.7 all resolutions of the Board shall be adopted by a majority of the votes cast.  In the event of a tie, the Chairman of the Board has a deciding vote.

15.8 Unanimity & Ministerial Approval

Decisions which concern (i) material change in the nature of the business or (ii) capital expenditure in excess of US$100,000,000.00 or (iii) creation of a mortgage or charge in respect of all or any part of the undertaking, property or assets of the Company shall require unanimity of votes and approval of the Portfolio Ministry and the Ministry of Finance and the Public Service.
16. MINUTES & RESOLUTIONS: 
 16.1 Minutes & Records:
The Corporate Secretary is charged with the responsibility of recording accurate minutes of meetings and the decisions which are made at every Board meeting.

16.2 The minutes of the meeting must be confirmed by the Board and then signed by the Chairman of the meeting and the Secretary and added to the Board’s Records.

16.3 Each Director shall receive a copy of the minutes.

16.4 Round Robin Resolutions:

In the event that an urgent decision is required before the next scheduled meeting of the Board, a round robin may be circulated to all Directors for comment and/or voting.  All comments and/or votes shall be recorded.

16.5 A decision made by round robin shall be as valid and effectual as if it had been passed at a meeting of the Board duly convened and held and shall be noted at the subsequent meeting. Round robin resolutions require approval of all members.

16.6 Approval of the members may be communicated by email or other electronic means.

16.7 All resolutions approved by round robin should thereafter be noted at the next regular Board meeting.

16.8 Objection to Resolutions:

The Board shall meet at least four (4) times for the year.
 

16.9 A Director who objects to any resolution adopted by the Board shall have his or her objection recorded in the minutes.

16.10 Directors absent from meetings will be taken to have accepted any decisions made if no objections are made within 7 days of becoming aware of the decisions.

17. MISCELLANEOUS:
 17.1 Agreement to be bound by Charter:
Anyone who is appointed as a Director must, upon assuming office, declare in writing to Petrojam that the person accepts and agrees to comply with the provisions of this Charter. A corresponding reference to this extent is included in a Director’s introduction letter.
17.2 Website Disclosure:
The Board’s Charter and the Terms of References and the composition of the committees may be posted on Petrojam’s website.
17.3 Directors Indemnity

17.3.1 Petrojam Limited shall indemnify:

        1. A Director of Petrojam Limited;
        2. A former Director:
          against all costs, charges and expenses (including an amount paid to settle an action or satisfy a judgment) reasonably incurred by him in respect of any civil, criminal or administrative action or proceeding to which he is made a party by reason of being or having been a Director of Petrojam Limited;
        3. Sections (a) & (b) do not apply unless the Director:
          1.  Acted honestly and in good faith, with a view to the best interests of Petrojam Limited; and
          2. In the case of a criminal or administrative action or proceeding that was enforced by a monetary penalty, had reasonable grounds for believing that his conduct was lawful.
        4.  A Director is entitled to an indemnity from Petrojam Limited in respect to all costs, charges and expenses reasonably incurred by him in connection with the defence of any civil, criminal or administrative action or proceeding to which he is made a party by reason of being, or having been, a Director of Petrojam, if the director:
          1. was substantially successful on the merits in his defence of the action or proceeding;
             
          2. qualified in accordance with standards set out in Sections (b) or (c); and
          3. is fairly and reasonably entitled to indemnity.

17.3.2 Indemnity Insurance

Petrojam Limited provides indemnity insurance for Directors under a Directors & Officers Liability insurance Policy.

18. MISCELLANEOUS:
The Board shall review this Charter at least every two years.
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