Corporate governance – FY17 performance

Corporate governance is an important element of AGL’s performance. In our FY17 Sustainability Report, we elaborate the key aspects of AGL’s corporate governance architecture.

ASX Principles

Our corporate governance arrangements are consistent with the Australian Securities Exchange (ASX) Corporate Governance Council’s ‘Corporate Governance Principles and Recommendations – 3rd Edition’ (ASX Principles) issued in March 2014. Our annual Corporate Governance Statement discloses the extent to which AGL has adopted and met the ASX Principles. A ‘Corporate Governance Summary’ section has also been included in the 2017 Annual Report which provides shareholders with an overview of AGL’s corporate governance framework, policies and practices.

AGL Board and committees

As at 30 June 2017:

  • the AGL Board comprised eight non-executive Directors and one executive Director, our CEO, Andy Vesey, and
  • the proportion of female Directors on the Board was 33%. This meets the target set by the Board that, by 2018, at least 30% of non-executive Directors will be female.

Detailed information about the structure, responsibility and experience of the AGL Board is included on the AGL website and within the Annual Report.The Board has established four standing committees that meet regularly to oversee key risks affecting the business. During FY17, each committee set aside time at one of its meetings to review and discuss its performance over the past 12 months. Each committee was satisfied that it had been effective in performing its responsibilities under its Charter (whilst also identifying areas for improvement).

Safety, Sustainability and Corporate Responsibility Committee

The Safety, Sustainability and Corporate Responsibility Committee assists the Board in (a) reviewing and overseeing the development and implementation of policies and procedures that enable AGL to operate its business safely, ethically, responsibly and sustainably; and (b) monitoring the decisions and actions of management in achieving AGL’s objective to be a safe, ethical, responsible and sustainable organisation. The Committee operates under a formal charter and currently comprises four non-executive, independent Directors. The Committee oversees and reviews, amongst other things:

  • AGL’s actions to meet its obligation to maintain the health and safety of its people
  • the social, environmental and ethical impact of AGL’s activities, and the systems for managing compliance with AGL’s sustainability policies and practices
  • initiatives to enhance AGL’s sustainable business practices and reputation as a responsible corporate citizen
  • the integration of safety, sustainability and corporate responsibility matters in the formulation of AGL’s strategy, risk management framework, health, safety and environment management systems, and people and culture priorities, and
  • AGL’s compliance with all relevant legal and regulatory requirements governing the matters within its responsibilities.

A suite of internal sustainability key performance indicators is reported to the Committee on a quarterly basis.

Audit and Risk Management Committee

The Audit and Risk Management Committee operates under a formal charter. Its primary function is to assist the Board in fulfilling its responsibilities to provide shareholders with timely and reliable financial reports and to safeguard AGL’s interests taking into account the reasonable interests of shareholders, customers, employees, the communities in which AGL operates and other relevant stakeholders through the effective identification, assessment, monitoring and management of risks.

People and Performance Committee

The People and Performance Committee operates under a formal charter. Its primary function is to assist the Board in fulfilling its responsibilities to shareholders, customers, employees and the broader community through the appropriate recruitment, retention and remuneration of senior managers and other employees with the capabilities and skills necessary to execute AGL’s business strategy. The responsibilities of the Committee include, among other things, making recommendations to the Board in relation to:

  • the remuneration of Directors
  • the remuneration, recruitment, retention and termination policies applicable to AGL’s Executive Team
  • creating positive employee relations
  • guidelines for incentive plans
  • the superannuation arrangements in place for AGL employees, and
  • AGL employment policy matters.

Nominations Committee

The Nominations Committee operates under a formal charter. Its primary function is to assist the Board in fulfilling its responsibilities to shareholders through the appropriate recruitment, retention and education of Directors. The responsibilities of the Committee include, among other things:

  • reviewing the skills, knowledge and experience a Director should have, having regard to AGL’s operating performance, financial position and strategic objectives
  • reviewing the structure, size and composition of the Board and Board committees
  • developing and implementing a process for evaluating Board, committee and individual Director performance
  • developing selection criteria for the appointment of new directors and overseeing arrangements for the effective appointment and induction of new Directors, and
  • developing succession plans for non-executive Directors, taking into account the challenges and opportunities facing AGL, and the skills and experience likely to be required in the future.

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