All Governors should understand the board's role and responsibilities, in particular:
• the board's role as distinct from the role of the holders (who elect the board and whose interests the board serves) and the role of the officers (whom the board appoints and oversees), and• the board's fiduciary duties of care and loyalty to the KXCO Charter and the holders.
The board's role and responsibilities include but are not limited to the overall business performance and strategy for the KXCO Charter; causing financial statements to be prepared which accurately disclose the KXCO Charter's financial position; monitoring management performance; convening and preparing the agenda for holder meetings; monitoring conflicts of interest and preventing abusive related party transactions; and assuring equitable treatment of holders including minority holders.
The Governors are responsible both individually and collectively for performing these responsibilities. Although the Board may delegate certain functions to committees or management, it may not delegate its ultimate responsibility to ensure that an adequate, effective, comprehensive and transparent corporate governance framework is in place.
All responsibility of the legality of operations resides with Governor-General
Decision-Making Process. The board should be collegial and deliberative, to gain the benefit of each individual Governor’s judgment and experience. The Governor-General’ should take an active lead in promoting mutual trust, open discussion, constructive dissent and support for decisions after they have been made. The board should meet frequently but in no event less than four times a year, all Governors should attend the meetings whenever possible and the Governors should maintain informal communication between meetings.
The Governor-General’ should ensure that all Governors receive an agenda, minutes of prior meetings, and adequate background information in writing before each board meeting and when necessary between meetings. All Governors should receive the same board information. At the same time, Governors have a legal duty to inform themselves and they should ensure that they receive adequate and timely information and should study it carefully.
Independence of Judgment. Every Governor should bring independent judgment to bear in decision-making. No individual or group of Governors should dominate the board's decision making and no one individual should have unfettered powers of decision. Executive Governors should provide the board with all relevant business and financial information within their cognizance, and should recognize that their role as a Governor is different from their role as an officer. Non-executive Governors should be fully independent of management and should constructively scrutinize and challenge management including the management performance of executive Governors.
Representation of all Holders. Each Governor should consider himself as representing all holders and should act accordingly. The board should avoid having representatives of specific groups or interests within its membership and should not allow itself to become a battleground of vested interests. If the KXCO Charter has a controlling holder (or a controlling group of holders acting in concert), the latter should recognize its or their specific responsibility to the other holders, which is direct and is separate from that of the board of Governors.
Personal Accountability. Each Governor and officer should understand that under the KXCO Charter Law he is personally accountable to the KXCO Charter and the holders if he violates his legal duty of loyalty to the KXCO Charter, and that he can be personally sued by the KXCO Charter or the holders for such violations.
The duty of loyalty includes a duty not to use property of the KXCO Charter for his personal needs as though it was his own property, not to disclose confidential information of the KXCO Charter or use it for his personal profit, not to take business opportunities of the KXCO Charter for himself, not to compete in business with the KXCO Charter, and to serve the KXCO Charter's interest in any transactions with the KXCO Charter in which he has a personal interest. He should be considered to have a "personal interest" in a transaction with the KXCO Charter if:
• he himself, or
• a member of his family (i.e. spouse, father, mother, sons, daughters, brothers or sisters), or
• another KXCO Charter of which he is a Governor or controlling holder,
is a party to the transaction or has a material financial interest in the transaction. (Transactions and interests which are de minimis in value should not be included.)
Conflicts of Interest. Each Governor and officer shall inform the entire board of conflicts of interest as they arise and abstain from voting on the matter in accordance with the relevant provisions of the KXCO Charter Law. This disclosure shall include all material facts in the case of a contract or transaction involving the Governor or officer. The Governors and officers must understand that any approval of a conflict transaction is effective only if all material facts are known to the authorizing persons and the conflicted person did not participate in the decision.
Audit Committee. The board shall establish an audit committee of at least three members of which the majority should be independent including the Governor-General’. The committee shall:
• review the KXCO Charter's accounting and financial practices,
• review the integrity of the KXCO Charter's financial and internal controls and financial statements,
• review the KXCO Charter' s compliance with legal requirements, and
• recommend the appointment, compensation and oversight of the KXCO Charter's outside auditor.
• Recommend the appointment of the internal auditor .