You are an independent consultant, counselling companies on corporate governance issues. You have been engaged by JKM Renew Pty Ltd (JKM) to advise them on their corporate governance structures.

JKM is a land remediation business. You are unfamiliar with this industry, and decide to conduct some quick online research

Turning to JKM’s own website: this is visually clean and simple. It lists an impressive array of former land and water reclamation projects, with glowing testimonials from councils, local communities, and other grateful clients. JKM staff consist of full-time employees and contractors. The current annual company turnover is almost AUD$60 million.

To your annoyance, the seemingly simple website does not readily deliver the company’s corporate governance information. It takes considerable time searching through unrelated links to find the relevant information.

The JKL Board comprises:

Company History

JKM was started in 1990 by brothers Joshua Milton (mining engineer) and Keith Milton (soil scientist). As Keith explained in his introductory phone call:

Mining projects have a finite life. Once a mine closes, the site must be made safe for future generations, and eventually repurposed. The long-term game is not extraction [of ore] but land renovation.

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The company started small in Western Australia, with Joshua and Keith sourcing work through their mining industry connections. JKM extended activities to recovery of industrial sites as well as mines. Now headquartered in NSW, JKM plans to make water reclamation projects a larger part of their portfolio. Doing so would require company expansion, and significant capitalisation.

Context of your appointment

Recently, JKM concluded a successful land reclamation project on behalf of Orecorp, a multi-national mining corporation. Impressed with JKM’s results and record, Orecorp have created a memorandum of understanding, to make JKM the sole provider of remediation services for all Orecorp’s Australasian projects. The work would involve land reclamation of mining sites and of ore processing facilities. Orecorp also owns a range of coal-fired power stations scheduled for decommissioning and site remediation within a 5- year period.

JKM are excited by the proposed collaboration, as it fits with their plans for company expansion. Orecorp may be willing to invest some capital in JKM, in exchange for a 20% ownership stake in the company, with representation on the company board.

As part of the agreement process, Orecorp conducted a brief investigation of JKM’s corporate governance structures. The resulting short report was shared with JKM. The report raises concerns around the current company structure, its lack of management oversight and other operational controls. Orecorp expressed reluctance to invest in a company, where so many senior executives and Board members are close family.

You are friendly with the consultant who compiled Orecorp’s report into JKMs corporate structures. So, you give her a call. She confirms that, when she asked for Board meeting attendances, Myra Peterson (Company Secretary) asked “I’ll check my emails for apologies. How far back should I go?”

The Orecorp report indicates that for the collaboration to proceed, JKM must:

• Prove their compliance with ASX guidelines on best practice for corporate governance.
• Strengthen their risk management structures.
• Engage in regular sustainability reporting, using a structure such as the GRI reporting standards.