The Doctors’ Health Fund (the Fund), a registered private health insurer, is committed to implementing high standards of corporate governance.
The powers and duties of the Fund are specified in the constitution of the Fund, the Corporations Act 2001 (Cth), the Private Health Insurance Act 2007 (Cth) and other relevant legislation and law.
Board of directors and its committees
Composition of the Board
The Board has determined its size and composition subject to limits imposed by the Fund's constitution which provides for a minimum of five directors and a maximum of seven directors. For the time being, the Board has determined that there shall be five directors, three of whom are medical practitioners.
Whenever necessary and appropriate, the Board may make arrangements to access skills externally where they are not available within the Board.
Board committees
The Board establishes standing and ad hoc committees to assist it in carrying out its responsibilities. The directors chair and participate in those committees.
Each committee is provided with a charter by the Board setting out its role, composition, powers, responsibilities and any other relevant matters.
Currently there are three standing committees:
1. Audit, Risk and Compliance Committee (ARCC)
2. Human Resource, Remuneration and Nominations Committee (HRRNC)
3. Marketing and Business Development Committee (MBDC)
Unless specifically empowered by the Board these committees are advisory committees. Matters requiring the Fund’s decision are referred to the next meeting of the Board.
Role and responsibilities of the Board
The Board’s role is to provide strategic guidance to the Fund within a framework of prudent and effective controls which enables risk to be assessed and managed. The Board sets the Fund’s strategic aims, ensures that the necessary financial and human resources are in place for the Fund to meet its objectives and reviews the performance of management. The Board sets the Fund’s values and standards and ensures that its obligations to the members of the Fund and others are understood and met.
In addition to committee meetings, the Board aims to meet at least six times a year.
The roles and responsibilities of the Chairman and the Chief Executive Officer
The roles of the Chairman and the Chief Executive Officer are strictly separate.
Role of the Chairman
The Chairman is responsible for leadership and effectiveness of the Board.
The Chairman presides over the Board and general meetings of the Fund. This task includes making sure that the Board is well informed and that the directors have the opportunity to air differences, explore ideas and generate the collective views and wisdom necessary for the proper operation of the Board and the Fund.
The Chairman is responsible for meetings of the Board being conducted competently and is expected to provide effective leadership in formulating the strategic directions for the Fund.
The Chairman must ensure that general meetings of the Fund are conducted efficiently and that members of the Fund have adequate opportunity to air their views and obtain answers to their queries.
The Chairman is also the Board’s representative in dealings with management and is responsible for communicating the Board’s views to management clearly and accurately. The Chairman also acts as the primary counselor to the Chief Executive Officer.
Role of the Chief Executive Officer
The Chief Executive Officer is appointed by the Board.
The Chief Executive Officer is responsible for the management of the Fund in accordance with the directions of the Board. This includes responsibility for delivery on the strategy, policies and budgets approved by the Board.
Board and Chief Executive Officer appraisal
The Board considers the evaluation of its own and the Chief Executive Officer’s performance as fundamental to establishing a culture of performance and accountability.
Conflicts of interest
A director who has a material personal interest in a matter relating to the affairs of the Fund or has any other interest which should be disclosed to avoid an actual or perceived conflict, may not be present when such a matter is discussed and may not vote on such matter.
Audit, Risk and Compliance Committee
The role of the ARCC is to assist the Board in discharging its responsibilities in relation to all internal and external audit, risk and compliance matters.
Internal control and risk management framework
The Board has developed internal controls and risk management procedures and instituted compliance systems. The ARCC is responsible for overseeing these compliance systems and reporting them to the Board.
Accountability and audit
External audit
The Board ensures that the Fund is audited annually by a reputable professional accounting firm. The current external auditors are PricewaterhouseCoopers.
Internal audit
The Fund’s internal audit function has been outsourced to an independent internal auditor. That auditor conducts reviews and testing on a rotational basis. All audit reports are reviewed by the ARCC. The internal auditor reports directly to the ARCC and attends all ARCC meetings.
Human Resource, Remuneration and Nominations Committee
The role of the HRRNC is to assist the Board with the task of developing policies and procedures regarding conditions and remuneration of employees and directors. It considers the appropriate skills and qualifications needed for the Board and recommends suitable directors to fill casual vacancies.
Marketing and Business Development Committee
The role of the MBDC is to advise and assist the Board on matters relating to marketing and communications for the Fund and to actively promote the Fund to members and potential members.
Relationship with members
The Board ensures that the members are informed of all major developments affecting the Fund’s state of affairs. The Board’s annual report is a major part of the communication to members about the state of affairs of the Fund. The annual general meeting is held within four months after the close of the financial year at a place the Board determines.
The Board is the final level of appeal within the Fund, for matters handled pursuant to the Fund’s Complaints Handling Policy.
Remuneration of directors
Directors are paid by the Fund for their services. In 2006, the members approved an aggregate limit of $300,000 for directors remuneration. As required by the Fund’s constitution, any increase to this aggregate limit requires approval from members. The division of the lump sum between the directors is a matter for the Board. The Chair and the committee chairs will normally receive higher fees than other directors.