Sky City Limited

Corporate Governance

Corporate governance at Sky City encompasses the company’s decision-making structures and the mechanisms used to manage the organisation

The board of Sky City has a comprehensive set of corporate governance practices and procedures in place to ensure that these responsibilities are met.

Role of the Board

Sky City’s board of directors is responsible for supervising the management of the company. The board establishes the company’s objectives, the major strategies for achieving these objectives, the overall policy framework within which the business of the company is conducted and monitors management’s performance with respect to these matters. The board must also ensure that the company’s assets and resources are maintained under effective stewardship, that decision- making authorities within the organisation are clearly-defined, that the social and business obligations of the company are met, that the letter and intent of New Zealand company and casino law is complied with, and that the company is well-managed for the benefit of its shareholders.

The board currently comprises seven directors, including a non-executive chairman, an executive director and five non-executive directors. Details of directors in office at 30 June 1999 are set out on pages 28, 29 of this Annual Report. Procedures for the operation of the board, including the appointment and removal of directors, are governed by the company’s constitution.

The board normally meets nine times per annum to consider strategic issues and review company performance. Due to the requirements of the BIL sell-down, 11 board meetings were held during the 1999 year.

Code of business practice

The board and management of Sky City have developed a Code of Business Practice which sets out the standards of behaviour expected of Sky City people when carrying out their job responsibilities. The Code refers to behavioural requirements under the following headings: compliance with laws and regulations; honesty and fairness; human rights; health and safety; privacy and confidentiality; insider trading; conflicts of interest; bribes and favours; competition; promotion and advertising; community contributions; problem gambling; and the service of alcohol.

Audit Committee

The board’s Audit Committee, which formally meets four times a year, sets and monitors the company’s accounting and reporting practices and its internal control and risk management environments. The Audit Committee is chaired by Waari Ward-Holmes.

Corporate Governance Committee

The board’s Corporate Governance committee, which formally meets twice a year, monitors board membership and effectiveness, senior executive performance and remuneration, the ethics of the organisation, protection of the company’s casino licences, statutory and regulatory compliance, and the identification of and planning for emerging issues. The company has a formal code of conduct governing the purchase of Sky City securities by directors and executive personnel, and a prohibition on gaming by Sky City staff and directors on the company’s premises. Compliance with the Codes for Securities Transactions and Business Practice is overseen by the Corporate Governance Committee. The Corporate Governance Committee is chaired by Jon Hartley.

Governance charters and policies

Each of the Audit and Corporate Governance committees operates under a charter which is reviewed and updated each year.

The board itself operates under detailed terms of reference which set out the duties and responsibilities of directors.

The board delegates authority to management for decision-making under a comprehensive delegated authorities policy which is formally reviewed on a regular basis. A separate treasury policy covers treasury dealings, most of which relate to hedging interest rate risk associated with the company’s term borrowings.

Independent professional advice

Directors are entitled to seek independent professional advice at any time on any aspect of their duties and responsibilities, at the company’s expense.

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