Purpose of the Audit and Finance Committee
The purpose (“Purpose”) of the Audit and Finance Committee (“Committee”) is to assist the RChain Board of Directors (“Board of Directors”) in its oversight of the RChain Cooperative (“Cooperative”) and its organizational governance, risk management, financial wellbeing, and internal control practices. The Committee shall perform its role as it relates to fulfilling this Purpose by providing the Board of Directors with advice and guidance on:
- The integrity of the Cooperative’s financial statements;
- The Cooperative’s compliance with legal and regulatory requirements;
- The Cooperative’s system of internal controls;
- The Cooperative’s risk management; and
- The performance and independence of the Cooperative’s independent auditors.
Structure of the Committee:
The Committee shall be established as set forth in and pursuant to Article III, Section 16 of the Cooperative’s Bylaws.
The Board of Directors shall appoint a Committee of at least three members, consisting entirely of independent directors of the Board and Members of the Cooperative*1 who are neither Directors, nor Officers, nor staff-members of the Cooperative and shall designate one member as chairperson or delegate the authority to designate a chairperson to the Committee.
Each member of the Committee shall be financially literate, and at least one member shall be an “audit committee financial expert,” as defined by SEC rules.
The Committee shall meet separately and periodically with management, the personnel responsible for the internal audit function and the independent auditor. The Committee shall report regularly to the Board of Directors about its activities.
(*1) As that term is defined in the Cooperative’s Articles of Incorporation and By
Authority and Responsibilities of the Committee:
The Committee shall report directly to the Board of Directors as to any and all issues related to the Purpose of the Committee including, but not limited to, the progress and effectiveness of audits and the acceptability of the financial statements. As it relates to the Purpose, the Committee shall have the authority to review the financial statements of the Cooperative and other information related to the financing wellbeing of the Cooperative. The Committee shall have the authority and responsibility to appoint external auditors and, if applicable, review and oversee the effectiveness of their work including regular planning and supervising of the auditors by the Committee.
The Committee shall have the authority and responsibility to assess the Cooperative’s policies on risk assessment and risk management, including the risk of fraud, and to establish and maintain procedures for the receipt, retention, and treatment of complaints received by the Cooperative. The scope of this responsibility shall include, but not be limited to, review of the Cooperative’s overall antifraud programs and internal controls as well as major financial risk exposures facing the Cooperative.
The Committee shall have the authority and responsibility to assess the Cooperative’s compliance and ethics programs and review with the Cooperative’s Board of Directors and Officers. This shall include, but not be limited to, the review and assessment of reports of fiduciary duty breaches by the Cooperative’s Board of Directors or Officers. That Committee shall also have the authority and responsibility to enforce policies adopted by the Board of Directors addressing conflicts of interest and other issues facing the Cooperative related to the Committee’s Purpose. The Committee may review with the Cooperative’s general counsel and outside counsel on any legal matters related to the Purpose.
Meetings of the Committee
The Committee shall meet no fewer than five times per year, although additional meetings may be required to adequately fulfill the responsibilities of the Committee. Meetings shall be called by the Committee chair to do the following:
- Review and discuss the quality and integrity of the audited quarterly and annual financial statements with the Board, Officers, and the auditors.
- Review and discuss the performance and effectiveness of the auditors and of the internal controls in place.
- Assess any reports or complaints on issues that properly fall within the authority and responsibility of the Committee and its Purpose.
- Annually evaluate the Committee’s function and charter.
- Report to the Board regarding the execution of its duties and responsibilities and keep written minutes of its meetings.