Governance at The Doctors’ Health Fund

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 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. She 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 has an outsourced internal audit function. An independent internal auditor conducts internal audit 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. This committee was established on 1 July 2009.

Clinical advisory responsibilities

The Clinical Advisory Committee was disbanded during the financial year and its responsibilities transferred to the Board. These responsibilities are guided by principles set down by the Board and relate to medical and related clinical issues impacting the Fund’s operations.

The role of 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 appoints. The Board is the final level of appeal within the Fund, for matters handled pursuant to the Fund’s Complaints Resolution Policy.

Remuneration of directors

Directors are paid by the Fund for their services. The amount is determined from time to time at annual general meetings. Proposals to change directors’ remuneration are agreed to by the members as a lump sum at annual general meetings. The actual division of the lump sum between the directors is a matter for the Board. The Chair and the committee chairs will normally receive slightly higher fees than other directors. The directors are each indemnified by the Fund against any liability they might incur in their capacity as a director, subject to corporations law limitations.