The Code of Practice for the Governance of State Bodies, issued by the Department of Finance, sets out the principles of corporate governance that apply to the Company and the Directors support the principles and provisions of the code.
During the financial year the Board consisted of a nonexecutive Chairman and five non-executive Directors. The Chairman and non-executive board members are independent of the Chief Executive and senior management. All the Directors are appointed to the Board by the Minister for Agriculture, Food and the Marine for a period not to exceed 5 financial years and their terms of office are set out in writing. The level of remuneration for the Board of Directors is also determined by the Minister and remuneration of nonexecutive Directors is not linked to performance.
The Board meets formally on a regular basis. It has a schedule of matters specifically reserved to it for decision and is satisfied that the direction and control of the Group is firmly in its hands. The Group’s annual budget and rolling ten year financial plan are reviewed and approved by the Board. The Board receives monthly management accounts promptly with detailed comparison of actual to budget. The presentation of management accounts is supported by detailed presentations by senior management to the Board on a regular basis. All significant contracts, major investments and capital expenditure are also subject to review by the Board. Each non-executive Director brings independent judgement to bear on all matters dealt with by the Board including those relating to strategy, performance, resources and standards of conduct.
All members of the Board have access to the Company Secretary and the Company’s professional advisors as required. This ensures that Board procedures are followed and that applicable rules and regulations are complied with. Each Director received appropriate briefing on being appointed to the Board.
Members: Dermot Mulvihill (Chairman), Julie Murphy-O’Connor and Jerry Houlihan
The Audit Committee is composed of non-executive Directors and operates under formal terms of reference. The Committee may review any matters relating to the financial affairs of the Group, in particular, the annual financial statements, the financial control framework,
the internal audit function, reports of the external and internal auditors and proposed changes to accounting policies. The Chief Executive, Chief Financial Officer, the Chief Internal Auditor and other senior managers are normally invited to attend these meetings as appropriate. The Committee is responsible for the appointment and fees of the external auditors and meets with them to plan and subsequently review the results of the annual audit. The external auditors also meet privately with the Committee. The Chief Internal Auditor reports directly to the Committee and the Committee is responsible for approval of the internal audit plan. The Chief Internal Auditor also meets privately with the Committee.
A framework to formally identify risk and assess the effectiveness of internal controls has been established. Internal auditors monitor the Group’s control systems by examining financial reports, by testing the accuracy of the reporting of transactions and by otherwise obtaining
assurances that the systems are operating in accordance with the Group’s objectives. Management’s response to significant risks identified and their reporting procedures are also evaluated.
The Remuneration Committee of the Board was reconstituted in 2016 for the following purpose: to advise the Board in regard to policy on executive remuneration generally in the Company; to give guidance and advice to the Chief Executive in regard to the implementation of the Board’s policy as applied to the top management; to review performance related pay objectives and payment for the Group in any given year; to assist the Board in reviewing the performance and reward of the Chief Executive (subject to consultation with the Department of Agriculture, Fisheries and Marine and recommendations in relation to changing the pay and conditions of the Chief Executive being subject to Ministerial approval)
The members of the Committee are John Moloney and Roisin Brennan. The terms of reference of the Remuneration Committee will be further reviewed and finalised in 2017 and its final membership confirmed once the current two vacancies on the Board are filled.
The Board has overall responsibility for the Group’s system of internal control. Those systems which are maintained by the Group can provide only reasonable and not absolute assurance against material misstatement or loss. The Board confirms that it has reviewed the effectiveness of the system of internal control.
Management is responsible for the identification and evaluation of significant risks applicable to their areas of business, together with the implementation of suitable internal controls. These risks are assessed on a continuous basis and may arise because of control failures, disruption to IT systems, legal and regulatory issues, market conditions and natural catastrophes.
Management also reports to the Board on major changes in the business and external environment which affect risk. Where areas of improvement in the system are identified, the Board considers the recommendations of management and the Audit Committee.
The system of internal control is designed to ensure management carry on the business of the Group in an orderly manner, safeguard its assets and ensure, as far as possible, the accuracy and reliability of its records.
The key elements of the system are:
A risk register has been compiled that identifies the most significant risks facing the Group. In reviewing these risks, managers were asked to pay particular attention to:
The measures taken by the Directors to secure compliance with the Group and Company’s obligation to keep adequate accounting records are the use of appropriate systems and procedures and employment
of competent persons. The accounting records are kept at the Group’s head office at Dublin Road, Newtownmountkennedy, Co. Wicklow.
During the financial year, the Group continued its research and development programme in relation to its forestry activities and in expanding the application of its panel board products.
The Directors acknowledge their responsibility for ensuring compliance, in all material respects, with the provisions of the Prompt Payment of Accounts Act, 1997 as amended by the European Communities (Late
Payment in Commercial Transactions) (S.I. No. 580 of 2012) (‘the Regulations’). Procedures have been implemented to identify the dates upon which invoices fall due for payment and for payments to be made by such dates.
Accordingly, the Directors are satisfied that the Company has complied with the requirements of the Regulations.
A list of branches outside the Republic of Ireland, subsidiary and joint venture undertakings as at 31 December 2015 is set out in note 18 of the 2016 Annual Accounts.
There were no political contributions which require disclosure under the Electoral Act, 1997.
Section 22 of the Protected Disclosures Act 2014 requires Coillte to publish an annual report relating to protected disclosures made under the Protected Disclosures Act 2014. In accordance with this requirement, Coillte confirms that there were no protected disclosures made during the full year ending 31 December 2016.
There were no significant events, outside the ordinary course of business, that affected the Group since 31 December 2015.
The Auditor, PricewaterhouseCoopers, have indicated their willingness to continue in office.