Directors' Code of Conduct

The Directors' Code of Conduct records the minimum standards of conduct required of all Directors of National Roads and Motorists' Association Limited in carrying out their duties and responsibilities as directors of NRMA Motoring & Services.

1. Purpose and application

1.1  The purpose of this document (Code) is to record the minimum standards of conduct required of all Directors of National Roads and Motorists' Association Limited (ABN 77 000 010 506) (trading as NRMA Motoring & Services) (NRMA Motoring & Services) in carrying out their duties and responsibilities as directors of NRMA Motoring & Services and, where applicable, each subsidiary of NRMA Motoring & Services. (1)

1.2  The Directors have approved this Code in accordance with rule 17.3 of the Constitution and have agreed to be bound by it. The Board may approve updates or amendments to this Code from time to time. 

1.3  Some of the standards expressed in this Code summarise, or are otherwise broadly consistent with, various key duties imposed on directors under the Corporations Act 2001(Act) and the general law. Other standards are intended to supplement the statutory and general law duties and obligations of directors. This Code does not purport to be an exhaustive statement of such statutory and general law duties. 

1.4  This Code includes guidelines on the application of the core standards expressed in it. These guidelines are intended to assist the Directors in complying with these standards. 

1.5 Nothing in this Code requires or permits a Director to act in a way which would be a breach of any duty owed by that Director or which would be unlawful. 

1.6 This Code is in addition to any other charter, policy, protocol or code of conduct from time to time approved by the Directors. 
 

2. Duties

2.1 Good faith: As a fiduciary, a Director must act honestly, in good faith in the best interests of the company as a whole and for a proper corporate purpose.

• A Director's duty to act in the best interests of the company as a whole takes preference to acting in the interests of the members in the particular Region who elected that Director. This does not mean that a Director may not present the views of the members in a particular Region for consideration by the Board.  A Director may act taking into account the interests of the members in a particular Region as long as the Director genuinely believes that in so doing they are acting consistently with the interests of the company as a whole.
• Equally, a Director must not prefer, promote or protect the interests of any particular group of Directors or the Director's personal or commercial interests at the expense of the best interests of the company as a whole.
• In special circumstances, a Director may also owe a duty to other stakeholders. For example, the interests of creditors must be taken into account if the company is in financial difficulty. Of course, the company and the Directors must also comply with all relevant statutory obligations, including environmental, occupational health & safety, industrial relations and competition & consumer protection laws.
• Directors must exercise the powers granted to them for the purpose for which they were given, rather than a collateral purpose. For example, a Director must not directly or indirectly use his or her powers to protect their own position or perpetuate their own control or the position or control of a particular group of Directors.

2.2 Care and diligence: A Director must exercise their powers and discharge their duties with a degree of care and diligence that a reasonable person would exercise if they were a Director in the same circumstances. 3

The statutory business judgment rule contained in section 180(2) of the Act provides a "safe harbour" for directors in relation to their statutory and general law duty of care and diligence.  For it to be relied upon, a Director must:

(a) make the judgment in good faith for a proper purpose; and

(b) not have a material personal interest in the subject matter of the judgment; and

(c) inform himself or herself about the subject matter of the judgment to the extent they reasonably believe to be appropriate; and

(d) rationally believe that the judgment is in the best interests of the company. (The belief that a judgment is in the best interests of the company is a rational one unless the belief is one that no reasonable person in the Director's position would hold)

2.3 No misuse of information: A Director must not make improper use of information acquired as a Director to gain an advantage for themselves or someone else or to cause detriment to the company. 4 

2.4 No misuse of position: A Director must not take improper advantage of their position as a Director to gain an advantage for themselves or someone else or to cause detriment to the company. 5 

3. Conflicts of interest

3.1 Conflict rule:  A Director must not place himself or herself in a position where there is a real sensible possibility of conflict between his or her personal or business interests, the interests of any associated person, or his or her duties to any other company, on the one hand, and the interests of the company or his or her duties to the company, on the other hand. 

3.2 Notification of material personal interest:  A Director who has a material personal interest in a matter that relates to the affairs of the company must notify the other Directors of the nature and extent of the interest unless the Director is not required to do so under the Act.6  A Director of NRMA Motoring & Services who has a material personal interest in a matter that is being considered at a Board or Committee meeting must not vote on the matter or be present while the matter is being considered unless:

(a) the interest is not required to be disclosed under the Act; or

(b) approval for participation is obtained from other non-interested Directors; or

(c) approval for participation is obtained from ASIC.7

• One of the circumstances in which notice of a material personal interest is not required to be given is where the Director has given a standing notice of the nature and extent of the interest under section 192 of the Act and the notice remains effective. A standing notice will cease to have effect if it is not given to any Director appointed after the date it was first given or if the nature or extent of the interest materially increases above that disclosed in the notice.8

3.3 Notification of other conflicting interests:  A Director who holds any office or possesses any property which, whether directly or indirectly, conflicts or may create a conflict with his or her duties or interests as a Director of NRMA Motoring and Services must give to the other Directors a standing notice of the nature and extent of that interest in accordance with section 192 of the Act and ensure that such notice remains effective in relation to that interest. Where a Director has an interest in a matter that is not required to be notified under this paragraph or under paragraph 3.2, the Director may (but is not obliged to) give to the other Directors a standing notice of the nature and extent of that interest in accordance with section 192 of the Act.

• The notice may be given at any time and whether or not the matter relates to the affairs of the company at the time the notice is given. A standing notice will cease to have effect in the circumstances specified in the guideline to paragraph 3.2 above.

3.4 Actions where conflict arises: Apart from the obligation to notify the other Directors of any material personal interest or other actual or potential conflicting interests under paragraphs 3.2 and 3.3, the action which a Director should take if he or she is faced with an actual or potential conflict of interest or duties in relation to a particular matter being considered by the Board will depend on the nature and circumstances of the conflict.  It may include abstaining from voting on the matter and absenting himself or herself from all Board deliberations relating to the matter.10 

3.5 Corporate Opportunities: A Director must not divert to the Director or to any associated person a maturing business opportunity which the company is pursuing. 

3.6 Gifts, entertainment etc: A Director must not solicit or accept benefits, entertainment or gifts in exchange for, or as a condition of, the exercise of the Director's duties or as an inducement for doing any act associated with the Director's duties or responsibilities. In general, a Director may accept gifts, hospitality or other benefits associated with the performance of their official duties if such gifts, hospitality or other benefits:
(a) are within the bounds of propriety, a normal expression of courtesy or within the normal standards of hospitality;
(b) would not comprise the integrity of the company or the NRMA brand; and
(c) are not likely to be regarded as compromising the Director's ability to carry out his or her duties in an impartial manner.

3.7 No bribes etc: A Director must not solicit or accept any bribe, secret commission or illegal inducement of any kind. 

4. Conduct at Board and Committee Meetings

4.1 Decisions: A Director must bring an open and independent mind to Board and Committee meetings, listen to the debate on each issue raised, consider the arguments for and against each motion and reach a decision that he or she believes, in good faith and on reasonable grounds, to be in the best interests of the company as a whole.  

4.2 Debate: An opportunity must be provided for a Director to put his or her views on issues before the Board or a Committee on which he or she sits.  While Directors must treat each other with courtesy and observe the other rules in this Code, Directors should be able to engage in vigorous debate on matters of principle. 
 

5 Confidentiality

5.1 Confidential Information:  Confidential information (including the contents of Board or Committee papers and any document which is referred to in, or relates to, any of them) received by a Director in the course of the exercise of the Director's directorial duties remains the property of the company from which it was obtained.  Accordingly, a Director must not disclose such confidential information, the content of discussions and any decisions, resolutions, recommendations or directives made or given at Board or Committee meetings or any confidential communications between the company and the Directors or between some or all of the Directors in relation to the affairs of the company, or allow any of the foregoing to be disclosed, unless that disclosure:

        (a) has first been duly authorised by the Board; or

        (b) is made in accordance with the Media and Communications Protocol; or

        (c) is required by law or by any notice, order or regulation of any regulatory authority which is binding on the Director; or

       (d) is made to such employees, agents or advisers of a Group Company who have a legitimate interest in the subject of the disclosure and on the basis that the information being disclosed is to remain confidential; or

       (e) is made by the President but only where the President honestly and reasonably believes that such disclosure would not constitute a breach of the President's statutory or general law duties as a Director.

• The above restrictions on the disclosure in the public arena, whether through the media or otherwise, of confidential information and communications and the content of discussions at Board or Committee meetings are of fundamental importance.  All Directors must feel free to discuss without inhibition their views on issues before the Board.  Likewise executives must feel confident that commercially sensitive and potentially controversial issues concerning the business and affairs of the company can be fully and frankly canvassed in the boardroom without risk of later unauthorised ventilation in the public arena. 

5.2 No false or misleading information: A Director must not knowingly or recklessly disseminate false or misleading information about the company, any other Director or officer of the Company or the content of any discussions or decisions at any Board or Committee meeting or any communications between the company and the Directors or between some or all of the Directors in relation to affairs of the company.

5.3 Media and Communications Protocol: A Director must comply with the Media and Communications Protocol. 

6. Professional integrity

6.1 Courtesy:  A Director must not be discourteous towards fellow Directors or staff or make personal attacks on a fellow Director or a member of staff, whether in Board, Committee or other internal NRMA meetings or in discussion with others or in public statements.

6.2 No prejudicial actions or statements etc:  A Director must not engage in conduct, or make any public statement, likely to prejudice the company's business or likely to harm, defame or otherwise bring discredit upon or denigrate the company or any of the Directors or employees of the company. 

6.3 Dealings with other Directors:  A Director must not engage in conduct, including by way of threats of court action against another Director or other Directors personally, which is calculated or intended to intimidate those other Directors from supporting or seeking to further a policy, proposal or other matter which those other Directors may support or are supporting in discharge of their duty to act in what they honestly believe to be the best interests of the company as a whole.  

7. Corporate governance

7.1 Co-operation:  A Director shall, unless exempted by the Board or the President, co-operate in corporate governance procedures from time to time prescribed by the Board including periodic appraisals of the performance of the Board.

7.2 Time Commitment:  A non-executive Director must devote such time as is necessary to carry out the duties of the non-executive Director as determined by the Board. 
 

8. Adherence to code

8.1 A Director must, at all times, comply with the spirit, as well as the letter, of the law and of the standards set out in this Code. 

9. Complaints handling process and sanctions

9.1 Introduction: If this Code is to be adhered to, there must be sanctions which can be imposed in respect of breaches.  Such breaches may be relatively minor and warrant only a caution or reprimand, or they may be serious, or engaged in repeatedly, or as part of a course of conduct which is a serious threat to the interests of NRMA Motoring & Services, including where Directors are hampered in or deflected from performing their duties.

9.2 Complaints:  An allegation that a Director has breached this Code (complaint) may only be made by a Director, the Chief Executive Officer or an employee of a Group Company who ordinarily reports directly to the Chief Executive Officer (each a complainant).

9.3 Complaints Handling Process: A complaint shall be dealt with in accordance with the procedures set out below:

1. written complaints:  A complaint must:

(i) be in writing;

(ii) specify which section of the Code is alleged to have been breached and contain particulars of the alleged breach; and

(iii) include any available supporting material.

(b) referral of complaint to Conduct Officer:  A written complaint should be marked "confidential" and submitted to the relevant person specified below (each a Conduct Officer):

(i) in the case of a complaint concerning a Director other than the President not made by the President, to the President;

(ii) in the case of a complaint concerning a Director other than the President and the Deputy President made by the President, to the Deputy President;

(iii) in the case of a complaint concerning the Deputy President made by the President, to the Nominated Director;

(iv) in the case of a complaint concerning the President not made by the Deputy President, to the Deputy President;

(v) in the case of a complaint concerning the President made by the Deputy President, to the Nominated Director; and

(vi) in the case of a complaint concerning the President and the Deputy President, to the Nominated Director.

(c) Conduct Officer: If at any time a Conduct Officer is unwilling or unable to act as Conduct Officer in respect of a particular complaint, the Nominated Director shall act as the Conduct Officer.

(d) trivial or frivolous complaints: If the Conduct Officer determines that the complaint is trivial, vexatious or frivolous, the Conduct Officer may dismiss the complaint without referring the complaint to the Relevant Director. The Conduct Officer must promptly notify the complainant in writing of the Conduct Officer's determination to dismiss the complaint under this paragraph.

(e) further action: If the Conduct Officer determines that the complaint is not trivial, vexatious or frivolous, as soon as practicable after making that determination, the Conduct Officer:

(i) must notify the Relevant Director of the complaint and forward a copy of the complaint to the Relevant Director with that notice;

(ii) must allow the Relevant Director not less than 5 Business Days after the date of the notice referred to in sub-paragraph 9.3(e)(i), to comment on the complaint; and

(iii) may request the Relevant Director to provide a written response in relation to the complaint not later than 5 Business Days after the date of the notice referred to in sub-paragraph 9.3(e)(i) or such later date as is specified in such notice.

(f) initial review: After receiving and considering the Relevant Director's response, the Conduct Officer may:

(i) dismiss the complaint (in which case the Conduct Officer must promptly notify the complainant and the Relevant Director of the Conduct Officer's decision to dismiss the complaint); or

(ii) refer the complaint to the Independent Mediator for mediation (in which case the Conduct Officer must promptly notify the complainant, the Relevant Direct and the Secretary of the Conduct Officer's decision to make that referral); or

(iii) if the Conduct Officer considers that, having regard to the nature of the complaint, mediation is not appropriate or is unlikely to resolve the matter, refer the complaint to the Board for investigation in accordance with the procedures set out in sub paragraphs 9.3 (h) and (i) (in which case the Conduct Officer must promptly notify the complainant, the Relevant Director and the Secretary of the Conduct Officer's decision to make that referral).

(g) mediation: If the Conduct Officer refers the complaint to the Independent Mediator for mediation, the Independent Mediator will mediate the complaint in accordance with such procedures as may be agreed between the complainant and the Relevant Director or, failing agreement within 10 Business Days of the date of the referral of the complaint to the Independent Mediator, in accordance with the ACDC Guidelines for Commercial Mediation in force at such date of referral other than clauses 1 (Notification of Parties to the Dispute) and 2 (Selecting a Mediator) of such Guidelines. The Conduct Officer shall be entitled, but not obliged, to attend the mediation. The Independent Mediator will provide a written report to the Conduct Officer and the Board on the outcome of the mediation as soon as practicable after the conclusion of the mediation.

(h) investigation by the Board if:

(i) the Conduct Officer refers the complaint to the Board for investigation in accordance with sub paragraph 9.3(f)(iii), or

(ii) the complaint has been referred to mediation but has not been able to be resolved by mediation; or

(iii) a majority of the Board does not believe that the outcome of the mediation is satisfactory having regard to the nature of the complaint,the Board will investigate the complaint to determine whether or not in the opinion of the Board a breach of this Code has occurred and, if so, the appropriate sanctions to be applied in the circumstances.

(i) right to be heard:  When the Board is considering whether there has been a breach of this Code or the sanctions which are appropriate, the Board must notify the Relevant Director and give the Relevant Director a right to be heard by the Board. However, the Board is not obliged to allow the Relevant Director to be legally represented. Following the investigation of the complaint, the Board must allow the complainant and the Relevant Director the right of reply but not the right of cross examination. The Board must act fairly, promptly and without bias in making decisions. The Board will:

(i) give consideration to the serious consequences of a finding that there has been a breach of this Code by the Relevant Director; and

(ii) make a finding (by majority) that in their opinion a breach of this Code has occurred on the basis of the balance of probabilities.

There is no specific protection against liability for defamation in respect of complaints. 

9.4 Sanctions: The Board should consider how serious the contravention of the Code is and may then impose such sanctions as they consider (by majority) appropriate where they make a finding (by majority) that in their opinion a breach of this Code has occurred on the basis of the balance of probabilities. The sanctions which may be imposed include (but are not limited to) one or more of the following:

1. suspension of the Relevant Director from membership of any Committee of which the Relevant Director is a member and termination of payment of fees to the Relevant Director in respect of services on the Committee for the period of suspension; 
   
2. removal of the Relevant Director from such Committee of which the Relevant Director is a member as the Board considers appropriate and termination of payment of fees payable in respect of the services involved;
   
3. removal of the Relevant Director from all or any of the Boards of the subsidiaries of NRMA Motoring & Services and termination of any fees payable for services in respect of the position or positions;
   
4. suspension or curtailment of some or all of the activities permitted to be undertaken by a Director in the Region from which the Director was elected under the "Board Protocol - director relationship with region" approved from time to time by the Directors or otherwise approved by the Directors;
   
5. referral to ASIC or any other appropriate regulatory authority of the complaint in respect of conduct where the conduct may have involved a breach of the Director's general law or statutory duties or the matter requires further investigation;
   
6. Court action in respect of alleged breaches of any of the general law or statutory duties owed by the Relevant Director; and
   
7. giving notice of intention, in accordance with section 203D of the Act, to move a motion for the removal of the Relevant Director from his or her office as a Director of NRMA Motoring & Services and calling a meeting of Members for consideration of such a motion.

A Director may be removed or suspended from membership of a Board of a subsidiary of NRMA Motoring & Services or a Committee whether or not the proceedings of that Board or Committee relate to the matter the subject of the complaint.

10 Definitions and interpretation

10.1 Definitions:  Unless the context indicates otherwise,

(a) words and expressions that appear in this Code have the same meanings as they have in the Constitution;

(b) the following words and expressions have the meanings set out opposite them:


ACDC means the Australian Commercial Disputes Centre.

Board: in paragraphs 9.3 and 9.4 and the definition of  "Nominated Director" in this paragraph 10.1(b) only, means, in relation to a particular complaint, the Directors other than the Relevant Director and the complainant (if the complainant is a Director).

Business Day means a day on which banks are open for business in Sydney, excluding a Saturday, a Sunday or a public holiday in New South Wales.

Conduct Officer means the relevant person specified in paragraph 9.3(b).

Group means NRMA Motoring & Services and each Related Body Corporate of NRMA Motoring & Services from time to time.

Group Company means a company in the Group.

Independent Mediator means the mediator agreed between the Relevant Director and the complainant or failing agreement within 5 Business Days of the date of referral of the complaint under sub-paragraph 9.3(f)(ii), such appropriately qualified and independent mediator as shall be appointed by ACDC at the request of the Secretary.

Media and Communications Protocol means the protocol regulating the making of statements to, and other dealings with, the media and other public communications in relation to the affairs of the Group from time to time approved by the Board.

Nominated Director means the Director, other than the Relevant Director and the complainant (if the complainant is a Director), who is appointed by a resolution of the Board to that position for the purposes of the particular complaint, or whilst and so long as no Director has been appointed, the chair for the time being of the Audit, Risk Management and Compliance Committee of NRMA Motoring and Services.

Relevant Director means the Director about whom a complaint is made.

10.2 Interpretation:  Rules 2.2, 2.3 and 2.4 of the Constitution apply to the interpretation of this Code in the same way as they do to the Constitution as if the words "this Constitution" in those rules were "this Code".

Legend

1 References to "the company" mean the particular company in relation to which the requirements of this Code arise for consideration.

2 The statutory formulation of this duty is contained in section 181(1) of the Act.

3 The statutory formulation of this duty is contained in section 180(1) of the Act.

4 See section 183(1) of the Act.

5 See section 182(1) of the Act

6 Section 191(2) of the Act lists the circumstances where notice is not required.

7 See section 195 of the Act.

8 See sections 191(2)(d) and 192 of the Act.

9 See rule 18.3 of the Constitution.

10 Under rule 18.2 of the Constitution, a Director may vote on a matter in which the Director does not have a material personal interest as long as the nature and extent of the Director's interest has been disclosed under section 192 of the Act.
 
This Code was approved by the Directors on 30 November 2005.