Statement of matters reserved
for the board
Management and oversight
Delegation of authority
Listed companies in Australia have clauses in their
constitutions that allow the directors broad ability
to delegate their collective powers, but not their
responsibility, to others. The constitution may
specifically provide for the delegation of powers
to board committees, the conferral of powers on a
managing director; and for broad delegation to any
other person. The Corporations Act recognises the
appropriate delegation of powers.
Directors may confer on a managing director any of
their powers and revoke or vary the delegation of power
to the managing director. A managing director will be
appointed under a contract of employment and, as
an officer of the company, has the same duties under
statute and common law as other directors, including
the fiduciary duty of acting in the best interests of the
company.
Corporate instruments
A company needs to put in place various corporate
instruments to clarify the operation of the delegation
of authority. These can include:
• the constitution, the board charter, including
delegation of authority to CEO (or statement
of matters reserved for the board)
• code of conduct
• board committee charters
• powers of attorney
• identification of risks and how they are being
managed
• contract of employment with the executive team
with the right to terminate.
Matters reserved for the board of directors will vary
greatly depending on the size of the company and
the composition of the board in respect of nonexecutive and executive directors. It is considered good
governance for the following matters to be considered
when drawing up the board charter. Directors will decide
over which of the following they have direct control
or oversight:
• nomination and appointment of directors,
membership and role of board subcommittees,
assessment of board performance and director
remuneration
• appointment, remuneration and assessment of
performance of chief executive officer and other
members of the senior management team
• delegation of powers and authorities
• corporate governance matters, including frequency
and agendas of board and committee meetings, and
the appointment of the company secretary matters
pertaining to shareholders including meetings,
communications and relations
• monitoring of company performance
• continuous disclosure policy, including approval
of annual reports and accounts
• capital management, including issues, calls on,
forfeiture of shares, declaration of dividends and
share buybacks
• directors’ interests, conflicts of same and relatedparty transactions
• share trading policy
• oversight of compliance with appropriate laws
and regulations and major litigation
• recommendations by management in respect
of finance matters, internal and external audit,
operational matters such as business strategy,
operating budgets, risk management, human
resources, sustainability policies, and political
and charitable donations
• significant mergers, acquisitions, restructures
and divestments
• approval of company policies
• director and executive succession planning
• appointments to subsidiary company boards.
© Governance Institute of Australia 2014. This material is subject to copyright. The Good Governance Guides indicate, in the view of Governance Institute
of Australia Ltd, one interpretation of good practice. They are not designed to cover or comply with all applicable legislation or case law. We cannot be held
liable or accountable to any person who acts or relies upon the information provided. The guides are not a substitute for professional advice.
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Management and oversight
Good Governance Guide