Appointments, Remuneration and Audit Committee (ARAC) Terms of Reference Membership
The Committee will consist of the Immediate Past President, who will act as chairman, the President and up to three non-Officer Council members. Additionally, there may be up to three non-Council members.
Ideally one member of ARAC should be a qualified accountant. In the event that any member of ARAC were to be considered for appointment as an Officer, that member would be required to withdraw from all discussions about the appointment.
Membership should be determined with a view to providing some continuity for the subsequent year. The expectation should be that members serve for at least two years
Membership is subject to the approval of Council and shall be reviewed annually.
The quorum of the committee is two members.
Secretary
The ACT’s Secretary shall be the Secretary of ARAC. At the discretion of the Chairman the Secretary may be asked to remain during a closed session. Minutes of any closed session should be password protected with the password known only to the Chairman and, where appropriate, the Secretary.
Attendance
The Chief Executive, Finance Manager and Secretary shall receive notice of all meetings and will normally attend meetings. Other members of Council may be invited to attend although this would be by exception.
At least once a year, ARAC will meet with the auditors without members of the Executive present. At the discretion of the chairman, ARAC may meet at other times without the attendance of the Executive.
ARAC may consult with or seek information from individuals invited to attend meetings but all final decisions will rest with the committee.
Frequency of meetings
Meetings will normally be held four times a year. Additional meetings may be called as required.
Purpose
ARAC’s purpose is divided into the following categories:
Appointments
Remuneration
Audit (including risk management)
Complaints, Disclosure and Speaking Up
Appointments
To consider the appropriate skills set required for individual candidates for Council.
Identify and propose to Council candidates who can be invited to stand for nomination to officer positions (usually the Vice President).
If only one candidate for any officer position is nominated then that person is deemed to be elected. If more than one candidate is nominated then a ballot of the membership will be held.
Play an active role in the process of encouraging a wider range of candidates for Council election.
If required, assist in the process of identifying possible committee members.
Identify and recommend to Council the appointment of the Chief Executive.
Remuneration
On the recommendation of the President, to approve the remuneration of the Chief Executive whose performance will be reviewed by the President at least every six months.
The President's written reviews, which should include the setting of and measuring of performance against agreed financial and non-financial objectives aligned to the overall strategy and goals of the ACT, should be copied to the members of ARAC prior to consideration and approval of the Chief Executive’s remuneration.
In the event of issues arising between the President and the Chief Executive which cannot be otherwise resolved, ARAC should act as mediator.
Audit (including risk management)
Consider and make recommendations to Council on issues relating to the appointment, fees and any questions of resignations or dismissal of the auditors. Review from time to time the cost effectiveness of the audit and the independence and objectivity of the auditor.
Discuss and agree with the auditor before the audit commences the nature and scope of the audit.
Discuss with the auditors any significant issues arising out of the audit and review the auditor’s management letter and the Executive’s response.
The Chief Executive is authorised to contract the auditors for non-audit services up to a fee level multiple of 1:1 of the audit fee. Any fee proposal for non-audit services in excess of this multiple will require the consideration and approval of ARAC.
Review and, if appropriate, recommend to Council the adoption of the annual audited accounts, focussing particularly on:
- any changes in accounting policies and practice;
- major judgmental areas;
- material adjustments resulting from the audit;
- the going concern assumption;
- compliance with accounting standards and best practice;
- compliance with any regulatory or legal requirements;
- the Report of Council contained within the Annual Report, in particular, the sections on risk and Council’s responsibilities for the financial statements.
The recommendation on adoption of the accounts, or otherwise, will take the form of an annual note from the Chairman of ARAC to Council.
Review and report back to Council on the ACT’s system of internal control. The review should cover internal controls in its broadest sense and not just be limited to financial controls. ARAC should consider whether the controls are adequate, in keeping with best practice and appropriate for the nature and size of the ACT.
Review regularly the ACT’s financial and business risks and the processes to manage such risks. If major risks are identified they should be reported to Council, with an assessment of the implications for the ACT and a recommendation as to the response required.
Review regularly and report back to Council on the ACT’s capital requirements, including an assessment of the capital at risk as a result of the proposed strategic direction and the level of profitability required to meet the ACT’s objectives.
Complaints, disclosure and speaking up
Members may, in confidence, raise concerns about possible improprieties concerning financial reporting, unprofessional or unlawful conduct with any member of ARAC. The ACT has policies and procedures in place to deal with concerns raised by employees; however, if an employee feels it is inappropriate, impractical or too sensitive to raise the concern using the established procedures they may, in confidence, report their concerns directly to any member of ARAC.
ARAC will ensure arrangements are in place for the proportionate and independent investigation of such matters and for appropriate follow-up action.
Such arrangements will be publicised on the ACT’s website and elsewhere from time to time, as deemed appropriate by ARAC.
Minutes
Minutes of all meetings shall be prepared and circulated to the committee and members of the Executive in attendance (where appropriate).
The auditors should be copied in on all relevant sections of the minutes.
Minutes should be circulated to Council after each meeting subject to editing by the Secretary and agreement from the Chairman.
If the Secretary is not present for all or any part of a meeting, the Chairman shall ensure minutes are prepared.
