2.1 Director Terms of Reference

1.

INTRODUCTION

The Board of Directors acts collectively and exercises its powers and responsibilities as a group. Individual directors have no power to act on their own, other than to ensure that they have access to all of the information required to exercise their duties. Please see related document Board Terms of Reference.

2.

FIDUCIARY RESPONSIBILITIES

Broadly speaking, a director of the Company has several fundamental obligations to perform.

3.

HONESTY AND GOOD FAITH

Common law and the Corporations Act require a director to act honestly and in good faith with a view towards the best interests of the Company. The key elements of this standard of behaviour are:

i)
A director must act with a view to the best interests of the Company and not in his or her self-interest. This also means a director must not act in the best interests of some special interest group or constituency.
ii)
A director cannot take personal advantage of opportunities that come before him/her in the course of performing his/her director duties.
iii)
A director must disclose to the Board any personal interests that he/she holds that may conflict with the interests of the Company.
iv)
A director must respect the confidentiality requirements of the Company's Code of Conduct and Conflict of Interest Guidelines.
3.1

Skillful Management

A director shall exercise the degree of care, diligence and skill that a reasonably prudent person would exercise in similar circumstances. This means:

i)
The standard of behavior expected of a director will depend upon the particular qualities or characteristics that the director brings to the Company relative to the particular matters under consideration.
ii)
The director must be proactive in the performance of his or her duties by:

a)
attending Board and committee meetings; a director who has not attended meetings, must show diligence by examination of reports, discussion with other directors, and otherwise being sufficiently familiar with the Company’s activities so that none of the director, Board and company suffer as a result of non-attendance;
b)
making themselves fully informed on the issues by:

1.
reviewing the material presented by management; and
2.
asking questions of management both at and between Board meetings to ensure that:

i)
the Board receives adequate and regular updates from management on all issues important to the business of Company; and
ii)
major Company initiatives have proper and timely Board understanding, consideration, oversight and approval.
c)
participating in a meaningful way; and
d)
being vigilant to ensure the Company is being properly managed and is complying with laws affecting the Company.
e)
See related document Board Terms of Reference.
4.

STANDARDS OF BEHAVIOUR AND ACTIVITY ESTABLISHED BY THE BOARD

4.1

General

As a member of the Board, each director will:

i)
demonstrate a solid understanding of the role, responsibilities and legal duties of a director;
ii)
demonstrate high ethical standards in personal and professional dealings; and
iii)
understand the difference between governing and managing, and not encroach on management's area of responsibility.
4.2

Plans

As a member of the Board, each director will:

i)
contribute and add value to discussions regarding the company's goals and objectives; and
ii)
participate in monitoring and evaluating the success of the Company and the CEO in achieving established goals and objectives.
4.3

Preparation, Attendance and Availability

As a member of the Board, each director will:

i)
prepare for Board and committee meetings by reading reports and background materials distributed in advance;
ii)
maintain an excellent Board and committee meeting attendance record1;
iii)
organize him/herself so as to be available to attend the entire Board or committee meeting, not just parts of meetings;
iv)
devote at least 5 – 15% of his working time to Board activities, depending upon the circumstances. See related document Time Commitment; and
v)
participate in committees and contribute to their purpose.
4.4

Communication and Interaction

As a member of the Board, each director will:

i)
demonstrate good judgment;
ii)
interact appropriately with the leadership and management of the Company;
iii)
participate fully and frankly in the deliberations and discussions of the Board;
iv)
be a positive and constructive force within the Board;
v)
demonstrate an openness to others' opinions and the willingness to listen;
vi)
have the confidence and will to make tough decisions, including the strength to challenge the majority view;
vii)
maintain collaborative and congenial relationships with colleagues on the Board;
viii)
advise the CEO and the Chair in advance when introducing significant and/or previously unknown information or material at a Board meeting; and
ix)
advise the CEO and the Chair in advance when the Director cannot fully support a recommendation to come before the Board.
4.5

Company Knowledge

Recognizing that good decisions can only be made by well-informed directors, each director will:

i)
become generally knowledgeable about the business of the Company and its industry;
ii)
participate in director orientation and development programs developed by the Company from time to time;
iii)
maintain an understanding of the regulatory, legislative, social and political environments within which the Company operates;
iv)
become acquainted with the Company's senior management team; and
4.6

Company Support

Each director will support the Company by:

i)
becoming an effective ambassador and representative of the Company;
ii)
making introductions for the Company and management to individuals and entities which may further the business of the Company;
iii)
assisting in financing the Company;
iv)
making a personal investment in the capital of the company in a meaningful amount;
v)
undertaking other initiatives as recommended by the Board.

1 The target is 100% attendance. Anything less than 80%, without extenuating circumstances, would create difficulties for the Board.