Corporate Governance Statement 31st December 2024

Steamships is committed to adopting and implementing rigorous corporate governance practices across all its activities and divisions. The following corporate governance report has been approved by the Board of Directors.

Steamships has adopted the following governance structure:

*   Meets quarterly

** Meets Monthly

Directors’ attendance at the Board and relevant Board Committee meetings during 2024 is as follows: 

Steamships complied with the Australian Stock Exchange Corporate Governance Principles & Recommendations (the fourth edition) during the twelve months ended 31 December 2024 as well as PNGX Corporate Governance Principles, except as disclosed below. References noted below as “ASX CGS Principles” align to this document. 

Each section addressing a key principle includes references to relevant information that appears in the 2024 Annual Report or on Steamships’ website.

MR Scantlebury and RPN Bray resigned from the Board effective 30 June 2024

CM Kasou joined the Board effective 1 March 2024. CM Kasou is a non-executive director and is independent.

CK Daniells and A Mistroni joined the Board on 1 July 2024.

Principle 1 / Lay Solid Foundations for Management and Oversight

Steamships internal management systems and processes are designed to support the Board in providing strategic guidance for the Company and provide effective management oversight. The Board operates under a charter (in accordance with ASX CGS Principles 1.1) which defines the Board’s duties and reserved matters and those delegated to committees and management. It also sets out the conduct for Board proceedings and provides that the Board is able to obtain independent advice. This charter is disclosed on Steamships' website and is reviewed annually.

The Company makes careful and appropriate enquiries before appointing a director or senior executive (in accordance with ASX CGS Principles 1.2) and provides shareholders with all the information in its possession it considers material to the decision to elect or re-elect a director. The Company also has a written contractual agreement with each of its directors’ and senior executives (ASX CGS Principles 1.3). During 2024 the Chairman of the board conducted a performance evaluation of the board, its committees, and the directors. In addition, performance evaluations for all senior executives were carried out during 2024 (ASX CGS Principles 1.6 and 1.7); such reviews include financial and non-financial targets as well as multi-annual strategic objectives

The Company Secretary reports to the board, through the Chairman, and agrees all agenda items, meeting minutes and dates of future meetings (in accordance with ASX CGS Principles 1.4).

Neither the Chairman of the Board of Directors nor the Chairperson of the Audit Committee is independent. This is contrary to the ASX CGS principles and recommendation 2.5 and 4.1 (a)(2)). Both are connected to major shareholders of Steamships. In each case, and in respect of the composition of the Board's committees (described further below) Steamships acknowledges the ASX CGS Principles, but considers its leadership structure is appropriate having regard to the composition of its shareholder base and the specific needs of its operations. The Chairman of the board is not the CEO. 

Recognising that a committed and diverse workforce improves operating performance and delivery of objectives, Steamships has a diversity policy in place at all levels, including the board (in accordance with ASX CGS Principles 1.5). A copy of the policy is disclosed on Steamships' website. This policy promotes gender diversity and PNG citizen development. As at December 2024 two of the eight directors are female (being 25%). Progress is reported quarterly to the board. The objective is to have a minimum of 30% of directors and senior managers of each gender.

A summary of the status as at 31 December 2024, and comparison between 2024 and 2023, is as follows:

Principle 2 / Structure the Board to be Effective and Add Value

While the Board maintains overall responsibility for the systems of internal control and monitors their effectiveness, it is assisted in discharging its responsibilities by the Audit Committee, composed of a non-executive chairperson (who represents a significant shareholder) and two independent non-executive members. Except as disclosed above, the Audit Committee is structured in accordance with ASX CGS principles and recommendation 4.1 and 7.1 The charter is disclosed on Steamships' website.

The members of the Audit Committee, their qualifications, and their attendance at meetings of the Committee held during 2024 are shown above and in the Directors’ Report contained in the 2024 Steamships’ Annual Report. 

The Board has a Remuneration and Nomination Committee (in accordance with ASX CGS Principles 2.1) comprising three Directors (two non-executive, neither of whom are independent, and the Managing Director). The members of the Remuneration and Nomination Committee and their attendance at meetings of the Committee during 2024 are detailed above. The charter is disclosed on Steamships' website.

Christine Kasou was appointed as a member of the Remuneration and Nomination Committee effective 1 January 2025.

The Company maintains a board skills matrix which sets out the skills assessed across the board (in accordance with ASX CGS Principles 2.2). This matrix is not publicly disclosed.

Steamships follows the Global Reporting Initiative, a worldwide corporate sustainability transparency initiative, and since 2017 has adopted the G4 guidelines.

The Company identifies the following directors as being independent: DH Cox OBE OL, C Kasou and P Aitsi MBE. Directors’ interests and length of service is disclosed in the Company’s 2024 Annual Report. The board has reviewed the interests as declared and is of the opinion that they do not compromise the independence of the above-mentioned directors. This satisfies ASX CGS Principles 2.3.

ASX CGS principles and recommendation 2.4 states that “a majority of the board of a listed entity should be independent directors”. As mentioned above, the Company does not meet this recommendation. However, given the nature of the shareholding and the nature of its operations in PNG, the board considers the current composition as appropriate. 

New directors are inducted onto the board through a series of briefings from fellow directors (including the managing director and finance director). The Chairman regularly assesses the need for continuing professional development, and makes training available to the directors, with a view to seeking to ensure that all directors have the skills and knowledge to perform their roles having regard to governance and ethics matters, and the industries in which the Company is involved. This is accordance with ASX CGS principles and recommendation 2.6. 

The Board has received from its Managing Director and its Finance Director a declaration that, in their opinion, the financial records of the entity for 2024 have been properly maintained and that the financial statements comply with the appropriate accounting standards and give true and fair view of the financial position and performance of the entity and that the opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively. This is in accordance with ASX CGS principles and recommendation 4.2. 

During 2024, management of Steamships and its divisions reported to the Board of Directors and to the Audit Committee on the effectiveness of its risk management systems and performance in managing material business risks. Steamships’ Strategic Planning Committee also formally reviews divisional risk registers and the corporate risk register as part of its annual strategic review.

Principle 3 / Instill a Culture of Acting Lawfully, Ethically and Responsibly

Steamships’ Code of Conduct (the Code) is based on the Company’s values and behaviours. It represents a commitment to uphold ethical practices as well as comply with legal and regulatory requirements and deal with potential conflicts of interest. The Code applies to all employees and extends to directors and senior executives. It is disclosed on the Company’s website and is reviewed annually by the Audit Committee (in accordance with ASX CGS principles and recommendation 3.1 and 3.2). In accordance with Principle 3.2(b) the Board is informed of material breaches of the code.

Other policies underpin the Code and include health, safety and environment (disclosed on the Company’s website), sustainability, anti-violence, drug and alcohol abuse, vehicle usage, cyber security, discipline and grievance and learning and development. The Code is signed by new joiners and is aligned to the Basic Rights as specified in the Constitution of the Independent State of Papua New Guinea. Proven material breaches of the Code result in termination of employment.

Principle 4/ Safeguard the Integrity of Corporate Reports

Steamships recognises the importance of the accuracy and integrity of its financial reports and has the structure in place to achieve this. The Audit Committee meets frequently (four times p.a. with two of these meetings being to review and approve the disclosure of interim and annual results and financial statements). The Audit Committee holds regular meetings with the external auditors (with and without senior management present).

The Company has a “whistleblowing” policy (in accordance with ASX CGS principles and recommendation 3.3), a copy of which is on Steamships' website. All incidents reported are investigated and are escalated to the Audit Committee.

The Audit Committee is responsible for the appointment, performance, and independence of the external auditors. PwC were re-appointed following a tender process in 2020. It is a practice of PwC that the engagement partner rotates after five years.

The external auditor is required to attend the Company’s Annual General Meeting where shareholder questions can be addressed.

The Company has an anti-bribery and corruption policy which is contained within the Code of Conduct (see above). This is in accordance with ASX CGS principles and recommendation 3.4.

Principle 5/ Make Timely and Balanced Disclosure

Steamships has a written policy which seeks to ensure compliance with the ongoing ASX Listing Rules disclosure requirements and PNGX Markets (being the Public Disclosure and External Communications Policy) which is reviewed annually. A copy of the policy is disclosed on Steamships' website. The Board received copies of all ASX market announcements promptly. This is in accordance with ASX CGS principles and recommendation 5.1 and 5.2.  

For the purposes of Principles 4.3 and 5.3, note that the Company does not disclose periodic corporate reports other than the half yearly and annual results and the Company does not give investor or analyst presentations.

Principle 6/ Respect the Rights of Security Holders

The disclosure policy referred to above also means that the Company is aware of the need to provide effective communication to shareholders on the activities of the Company. The Company seeks to achieve this through disclosures available on Steamships' website. This is in accordance with ASX CGS principles and recommendation 6.1

The Company does not have an investor relations programme (contrary to ASX CGS principles and recommendation 6.2). The Company believes that it is not necessary given its shareholder composition.

The Annual General Meeting is held in Port Moresby and all shareholders are invited to attend. The Company's auditor is also invited to attend and is available to answer questions (per Recommendation 9.3). The Company has established a tele-conference facility to encourage greater participation of shareholders at the AGM if they are unable to attend in-person (in accordance with ASX CGS principles and recommendation 6.3). The location of the meeting is considered to be appropriate given Steamships' registered address is in Port Moresby (per Principle 9.2).

Substantive resolutions are decided by a show of hands rather than a poll (contrary to ASX CGS principles and recommendation 6.4). The Company believes that this approach is fit for purpose having regard to the composition of its shareholder base and the specific needs of its operations

Although the website contains all information sent to shareholders, the Company is giving consideration to electronic communication. This is not available yet and as such in not accordance with ASX CGS principles and recommendation 6.5. 

Principle 7/ Recognise and Manage Risk

Steamships recognizes that the management of risk is a fundamental component of doing business in Papua New Guinea. This is managed through a comprehensive risk register compiled by each of the divisions’ management teams, reviewed quarterly, and endorsed by the executive directors. Divisions present their risk register to the Board of Directors quarterly and Strategic Planning Committee sub-committees of the Board annually in accordance with ASX CGS principles and recommendation 7.1 and 7.2 . This review took place in September 2024. 

The Health and Safety Committee meets monthly with representation from across the businesses including the Group HSSE Manager. The Health and Safety Committee is chaired by the Managing Director. The observations and actions from this committee are reported to the Board quarterly.

Steamships is committed to operating to ISO standards. All divisions have been awarded ISO 18001 (Safety), 14001 (Environment) and ISO 45001 (Quality). The Hospitality division has HACCP certification for food safety in all restaurants and food outlets.

The Company has an internal audit function whose activities are performed under a contract of services with one of the Company’s shareholders, John Swire & Sons Ltd. This is in accordance with ASX CGS principles and recommendation 7.3. The terms of reference for the internal audit function are contained in the Audit Committee Charter. 

The Company does not have a material exposure to environmental or social risks, although the former is a growing risk for all who live and work in Papua New Guinea. Consideration of these risks is in accordance with ASX CGS principles and recommendation 7.4.

Steamships strives to excel as a good corporate citizen of PNG and to be a leader in sustainable development within its industry.

Steamships is committed to sustainable development and conducts its activities in a manner that protects the environment, health, security and safety of its employees, contractors, customers and communities.

The Company has adopted a Sustainable Development Policy (available on the Company's website) which aims, amongst others, to reduce carbon footprint, reduce the volume of waste generated by operations, use water responsibly, be a good steward of natural resources and provide a work environment where all employees are treated fairly and with respect.

Steamships’ Community Grant Program supports Papua New Guinean registered charities and NGOs that provide development and community advancement in health, education, social welfare and social enterprise.

Principle 8/ Remunerate Fairly and Responsibly

The Remuneration and Nomination Committee meets at least semi-annually to review pay and bonus arrangements for all employees, succession planning and to review remuneration for Board and Committee Members. This is in accordance with ASX CGS principles and recommendation 8.1. As mentioned above, the charter is disclosed on Steamships' website.

The Company does not, however, disclose its policies and practices regarding remuneration of directors and senior executives. This is contrary to ASX CGS principles and recommendation 8.2

The Company does not have an equity-based remuneration scheme (and ASX CGS principles and recommendation 8.3 is not relevant).