The New Zealand Refining Company sees governance as a core business activity essential for the maintenance of corporate health and growth.
Like safety and quality, governance includes a set of systems and processes; supported by people with the appropriate competencies, principles and behaviours to ensure the process is effective and working to the long-term benefit of the business.
Our directors and management team are committed to the continued achievement of effective governance within the business, providing our shareholders, customers, suppliers and stakeholders with the assurance that we deliver on our promises in a way that reflects our business principles.
As the New Zealand Refining Company operates in New Zealand and is listed on the New Zealand Stock Exchange (NZX), we are subject to regulatory control and monitoring by both the NZX and the Securities Commission. Appendix 16 of the NZX Listing Rules sets out some ‘Minimum Requirements’ for governance and the Securities Commission has also published ‘Principles and Guidelines – a handbook for directors, executives and advisors’.
We are of the view that if we make sufficient disclosure incorporating the recommendations of these two publications, all interested parties will be able to assess the effectiveness of our corporate governance.
Governance is, by its very nature, never complete. It is not a project that has a finite end. There is always more to do, new techniques, learnings from past experiences and other organisations that need to be considered, and if deemed necessary, incorporated into our systems. More importantly, we are continually observing the culture within our business as to its health and appropriateness, and taking action accordingly.
The recognition and management of risk has been long established both at the refinery and for the Refinery to Auckland Pipeline (RAP). More recently, this systematic approach has been applied in a comprehensive manner to the entire organisation.
The directors are responsible for ensuring comprehensive and effective risk management is in place for the New Zealand Refining Company. The audit committee has a role to ensure that adequate systems have been put in place and are working effectively.
The New Zealand Refining Company is audited by a significant number of ‘interested parties’, including the aviation industry, legislative bodies, quality organisations and customers. We are of the firm belief that these audits, along with numerous internal audits, are a critical aspect of ensuring that management systems are functioning and effectively controlling the aspects (including risks) of the business they have been designed to.
The directors have charged the audit committee to ensure that systems are in place and working effectively.
A comprehensive register of all incidents and non-compliances is kept. Root Cause Analysis is carried out so that effective measures can be initiated to prevent the event (or similar events) occurring in the future.
Internal Audit is carried out at three levels:
- Comprehensive Corporate Audit Plan, approved by the audit committee, and carried out by Ernst Young
- Comprehensive Management Systems Audit programme lead by the quality manager
- Specific, one-off audits by technical experts, as part of a programme or for specific reasons.
The role of the internal audit function is to develop a comprehensive continuous audit programme, which supports the New Zealand Refining Company’s risk management process. The internal auditors have a direct communication line to the audit committee. The audit partner and internal audit manager from Ernst Young attend the audit committee meeting and present their report.