2004-05 Annual Report - Australia Post

isk in specific areas such as
fraud, the environment, injury
prevention and management,
legislative compliance, fire safety
and emergency procedures and
business continuity planning.
The potentially adverse financial
impacts associated with
catastrophic risk exposures
are limited by the purchase of
appropriate insurance cover.
The ongoing effectiveness of the
corporation’s risk management
framework is reviewed annually
by the board. Also, to ensure the
maintenance of best practice,
independent external reviews
of risk management across the
corporation are commissioned
periodically. The most recent such
review, completed in December
2004 by Deloittes, confirmed that
Australia Post’s risk management
processes compared favourably
with “better practice” in other
comparable organisations.
Internal control framework
The corporation’s internal control
framework covers multi-faceted
components that apply across
intersecting control categories,
control objectives, control
activities and business units
and processes.
The framework is consistent
with the model defined by
the Committee of Sponsoring
Organisations (COSO) of the
Treadway Commission, with
strategic, financial, operational
and compliance elements
established across the COSO
internal control layers. These
include financial planning and
reporting, capital expenditure
appraisal procedures, authority
delegation, due diligence
examination and procurement
contract tendering, senior
management review forums,
extensive polices and
procedures, expenditure gating,
external performance reporting
and corporation-wide risk
management practices. Financial
reporting and business system
integrity are assured through
the maintenance of detailed
information technology and
operating procedure manuals.
Consistent with the ASX
Corporate Governance Council’s
best practice recommendation
(Principle 7), before adopting the
2004–05 financial statements
the board received written
confirmation from the managing
director and the chief finance
officer that the integrity of
the statements was founded
on a sound system of risk
management and internal
compliance and control.
Treasury
A comprehensive and prudent
treasury policy has been
established to manage liquidity,
interest rate, foreign exchange
and fuel price risk. Reviewed by
the board at least annually, the
policy provides for the use of
hedging instruments to protect
the corporation against adverse
movements in interest rates and
minimise the impact of volatility
in foreign exchange rate and oil
price movements. The aim is
to ensure reasonable certainty
against budget estimates and
in the cost of imported capital
equipment and other supplies.
Established treasury procedures
incorporate risk control principles
of segregation of duties, dual
control access and independent
reconciliations. A Treasury
Risk Management Committee
determines appropriate hedging
strategies within the policy
parameters. Treasury activities
are reported regularly to the
board and are subject to annual
review by auditors.
Corporate security
The Corporate Security Group
has responsibility for ensuring
the integrity of the mail and the
safety of Post’s personnel and
other assets. This specialist
group maintains close internal
working relationships with the
legal, risk and audit areas, as well
as externally with international,
national, state and territory law
enforcement authorities.
Trade practices
To facilitate compliance with
the relevant legislation Post
has a dedicated trade practices
compliance officer responsible
for a national trade practices
compliance program. In addition
to undertaking comprehensive
biennial trade practices training,
the corporation has in place
a detailed formal clearance
process for all promotional
and advertising material.
Privacy
Directors’ attendance at meetings, 2004/05
The corporation also has a
full-time chief privacy officer
responsible for the maintenance
of a national privacy compliance
program. Detailed policies,
processes and procedures are in
place to safeguard customers’
personal information and to
foster a corporate culture that
values privacy.
BOARD
HUMAN
AUDIT
RESOURCES
COMMITTEE
COMMITTEE
(a) (b) (a) (b) (a) (b)
Linda Nicholls 11 11 6 5
David Mortimer 11 10 4 4
Graeme John 11 11 6 6
Mark Birrell 11 11 6 6
Margaret Gibson 9 9 3 3
Peter McLaughlin 11 11 6 5
Sandra McPhee 11 11 4 4
Edward Tweddell 11 11 4 4
Ian Warner 9 9
(a) Number of meetings held while a director/committee member
(b) Number of meetings attended
Australia Post Annual Report 2004/05 Report of Operations
Corporate governance
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