BERGER PAINTS JAMAICA LIMITED

Corporate Governance Code

Corporate Governance remains a key area of focus for Berger Paints Jamaica Limited (“Berger” or the “Company”).  One of the primary responsibilities of the Board of Directors and Management is to ensure Berger has a robust and effective Corporate Governance framework to ensure greater transparency, protection of shareholder interests and to enhance the financial performance of the company.   This Code is influenced by applicable laws and regulations and internationally accepted Corporate Governance Best Practices and is available on our website at www.Bergercaribbean.com

Board of Directors

The Company is led and managed by an effective Board comprising of directors with diverse backgrounds and experiences to enrich the dialogue, decision making and overall stewardship of Berger.  Directors are elected by the shareholders to supervise the management of the organisation and affairs of the company with the goal of enhancing long-term shareholder value. The Board is dedicated to upholding good corporate governance in order to deliver sustained growth.

To assist in its function, the Board has established an Audit Committee.

Regular meetings of the Board and Audit Committee are convened.  Telephonic attendance and conference via audio-visual communication at Board meetings are allowed under the Company’s Articles.  

Matters which are specifically reserved for decision making by the Board, include those involving

               •             corporate strategy and budgets

               •             material acquisitions and disposal of assets

               •             corporate financial restructuring,

               •             share issues

               •             dividends

               •             other returns to Shareholders.

Although the day to day functions of the business are delegated to management, it is the Board which remains ultimately accountable to its Shareholders to ensure that the business is managed in compliance with applicable laws, and is consistent with safe and sound business practices.

The Company does not have a formal training programme for the Directors.  However, in discharging that obligation, Directors may rely on the expertise of the Company’s senior management, its outside advisors and Auditors. Directors are also briefed on the business and updated from time to time on relevant changes to statutes and regulatory requirements applicable to the Company’s business.

In presenting the annual financial statements and quarterly financial statements to Shareholders, it is the aim of the Board to provide Shareholders with detailed analysis, explanations and assessment of the Company’s financial position and prospects.  Management currently provides the Board with appropriately detailed management accounts of the Company’s performance, position and prospects on a quarterly basis. 

All Independent Directors have access to all levels of senior executives in the Company and are encouraged to speak to other employees to seek additional information, if required.

Board Balance and Independence

Each of the Non-Executive Directors brings considerable business and/or professional experience, independent challenge and rigour to the deliberations of the Board.  The Board considers a Director to have met the criteria for independence if he or she:

               •             does not represent a substantial shareholding

               •             is not a close relative of a significant Shareholder

               •             does not have an employment relationship with the Company

The Board comprised three Non-Executive Directors and four Executive Directors.   In accordance with the Company’s Articles, one third of its Directors retire by rotation every year.

The Company Secretary attends all Board meetings and is responsible for ensuring that established procedures are followed and all relevant statutes and regulations which are applicable to the Company, are complied with. All Directors have separate and independent access to the Company Secretary.

Board Resolutions & Minutes

The Company Secretary minutes the proceedings and resolutions of all Board and Committee meetings.

Minutes are circulated for approval at the subsequent regular meeting of the Board of Directors

Directors’ Remuneration

The Board determines the level and structure of fees paid to non-executive directors.   The Executive Director is not paid a fee in respect of his office as a director of the company.

Communication with Shareholders

The Company has an open policy on communication with its stakeholders.

The Chairman is responsible for ensuring that the Annual General Meeting (AGM) is conducted in an efficient manner as an active engagement of shareholders.

Audit Committee

The Committee assists the Board in fulfilling its responsibilities relating to:

               •             The integrity of the financial statements and any formal announcements relating to the

                              Company’s performance

               •             Overseeing the relationship between the Company and its external Auditors

               •             The review of the effectiveness and adequacy of the Company’s internal and financial controls

               •             The review of the external audit plans and subsequent findings

               •             The review of the effectiveness of the services provided by the external Auditors and other

                              related matters

               •             Litigation reviews

               •             The review of compliance reports

The work of the Audit Committee is supported by the Group Internal Audit function as the Company is audited annually, the results of which are reported to the Audit Committee and the Board of Directors respectively.

In accordance with generally accepted Corporate Governance standards the majority of Committee members should are independent, seventy five percent (75%) of the Committee comprises Non-Executive, Independent Directors.

The members of the Audit Committee are the Honourable Michael Fennell OJ, Mr. Milton Samuda, Mr. Andy Mahadeo and Mrs. Jacqueline Sharp. The Committee is chaired by Mr. Fennell.

The General Manager and the Financial Controller/Company Secretary are invited to Committee meetings at the discretion of the Committee.