Page 4200 - Week 11 - Thursday, 17 Sept 2009
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I seek leave to make a statement in relation to the papers.
Leave granted.
MS GALLAGHER: In accordance with section 19(3) of the Territory-owned Corporations Act, I hereby present the statements of corporate intent of the three territory-owned corporations, Rhodium Asset Solutions, Actew Corporation and ACTTAB.
The statements of corporate intent signal the overall strategic direction of the respective territory-owned corporations as determined by each board. These statements are high-level documents setting out the commercial objectives, a description of the main undertakings and an outline of the nature and scope of activities, business and corporate strategies, and performance targets.
As in the private sector, it is one of the main functions of the board to identify the strategic direction that the company should take and to set the strategic objectives to be implemented by management. This is reinforced by the requirement under the Territory-owned Corporations Act that decisions made by the directors relating to the operation of the company are made in accordance with the statement of corporate intent.
These documents are drafted each year by the board of each corporation and submitted to the voting shareholders for comment. Any suggested changes proposed by the shareholders must be considered by the board and consultation must take place around any of those with which the board does not agree.
It is not incumbent upon the board, however, to accept and reflect suggestions from the voting shareholders with which they do not agree. This reinforces the distinction between the role of the board and the government shareholders. The statement of corporate intent is a document produced by and belonging to the board. It is important to take note of these fundamental points which underpin the government’s framework for territory-owned corporations.
Territory-owned corporations are formed under the commonwealth Corporations Act. This is an important fact that should not be overlooked as there does not appear to be a sound understanding in the public, the media and even the Assembly of the respective roles and obligations of directors and shareholders under the Corporations Act.
Indeed, the directors are subject to strict legal sanctions if they fail to comply with the requirements of the Corporations Act. This applies in particular to their fiduciary obligations to act in the best interests of the company itself. This corporate form is identical to that of private sector companies and one of the key principles of its application to territory-owned corporations is that this structure provides a clear separation in roles and responsibilities between the board of directors and the government.
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