2002 Qantas Annual Report
2002 Qantas Annual Report
2002 Qantas Annual Report
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corporate governance statement<br />
BOARD RESPONSIBILITIES<br />
In preparing this Statement, the <strong>Qantas</strong> Board has focussed on<br />
the structure and values which it has in place to ensure that the<br />
Board protects and enhances shareholder value.<br />
The Board maintains, and ensures that <strong>Qantas</strong> management<br />
maintains, the highest level of corporate ethics. The Board<br />
comprises a majority of independent Non-Executive Directors<br />
who, together with the BA Directors and Executive Directors,<br />
have extensive commercial experience and bring independence,<br />
accountability and judgement to the Board’s deliberations to<br />
ensure maximum benefit to shareholders, employees and the<br />
wider community.<br />
In particular, the Board:<br />
• ensures compliance with laws and all appropriate<br />
accounting standards<br />
• sets and reviews strategic direction<br />
• monitors the operating and financial performance of the<br />
<strong>Qantas</strong> Group<br />
• monitors the performance of the Chief Executive Officer,<br />
Chief Financial Officer and executive management<br />
• monitors risk management<br />
• ensures that the market and shareholders are fully informed<br />
of material developments<br />
BOARD STRUCTURE<br />
• 11 Directors<br />
• seven independent Non-Executive Directors elected by<br />
shareholders other than British Airways – no substantial<br />
shareholder/supplier/customer relationship nor previous<br />
executive roles within <strong>Qantas</strong><br />
• Chairman is an independent Non-Executive Director<br />
• maximum 12 year term for independent Non-Executive<br />
Directors and six year term for the Chairman<br />
• two Non-Executive Directors are appointed by British Airways<br />
(a right acquired from the Australian Government in 1993<br />
when British Airways purchased its shareholding)<br />
• two Executive Directors – Chief Executive Officer and<br />
Chief Financial Officer<br />
• new independent Non-Executive Directors are nominated by<br />
the Chairman’s Committee, appointed by the other independent<br />
Non-Executive Directors and elected by shareholders<br />
• details of the Directors and their qualifications are on page 25<br />
• at the 2000 <strong>Annual</strong> General Meeting, shareholders approved<br />
the entering of Director Protection Deeds with each Director<br />
AUSTRALIAN PROVISIONS<br />
• the Constitution contains provisions to ensure the<br />
independence of the <strong>Qantas</strong> Board and to protect the<br />
airline’s position as the Australian flag carrier<br />
• head office must be in Australia<br />
• two-thirds of the Directors must be Australian citizens<br />
• Chairman must be an Australian citizen<br />
• British Airways cannot vote in any election of independent<br />
Non-Executive Directors<br />
• quorum for a Directors’ meeting must include a majority<br />
of non-BA Directors who are Australian citizens and at least<br />
one BA Director<br />
• maximum 49 per cent aggregate foreign ownership<br />
• maximum 35 per cent aggregate foreign airline ownership<br />
• maximum 25 per cent ownership by one foreign person<br />
BOARD MEETINGS<br />
• eight formal meetings a year<br />
• additional meetings held as required (eg during the aviation<br />
crisis resulting from the combination of the 11 September<br />
2001 terrorist attacks and the 14 September 2001 collapse<br />
of Ansett)<br />
• two-day meeting held each year to review and approve the<br />
strategy and financial plan for the next financial year<br />
COMMITTEES<br />
• Board does not delegate major decisions to Committees<br />
• Committees are responsible for considering detailed issues<br />
and making recommendations to the Board<br />
• Audit, Risk & Compliance Committee – assists the Board<br />
in fulfilling its audit, accounting and reporting obligations,<br />
monitors internal and external auditors (including the<br />
independence of the external auditors), monitors business<br />
risk management and compliance with legal and statutory<br />
obligations<br />
• Safety, Environment & Security Committee – receives detailed<br />
reports on all safety (including occupational health and<br />
safety), environment and security aspects of the airline and<br />
ensures that the appropriate risk management procedures are<br />
in place to protect the airline, its passengers, employees and<br />
the community<br />
• Chairman’s Committee – review Board’s performance and<br />
remuneration, nomination of new Directors, recommends<br />
remuneration for Chief Executive Officer and senior<br />
executives and monitors succession planning<br />
• Nominations Committee – approval of Chairman and any<br />
Alternate Directors<br />
• the Audit, Risk & Compliance Committee, Safety, Environment<br />
& Security Committee and Chairman’s Committee operate<br />
under formal Terms of Reference which are updated regularly<br />
• Non-Executive Directors are a majority on and hold the Chair<br />
of all Committees<br />
• Chairman of the Audit, Risk & Compliance Committee has<br />
appropriate financial experience<br />
• membership of and attendance at <strong>2002</strong> Board and<br />
Committee meetings are detailed on page 30<br />
STANDARDS<br />
• annual formal review of Board performance<br />
• active participation by all Directors at all meetings<br />
• open access to information<br />
• regular management presentations and visits to interstate/<br />
offshore operations<br />
• Chief Executive Officer and Chief Financial Officer certify the<br />
accuracy and completeness of financial information provided<br />
to the Board<br />
• independent professional advice is available to the Directors<br />
• formal Code of Conduct – including conflict of interest<br />
• formal share trading policy<br />
• formal Continuous Disclosure Policy – ensures compliance<br />
with the Listing Rules and Corporations Act and that all<br />
shareholders have equal access to material information<br />
EXTERNAL AUDITOR INDEPENDENCE<br />
• the Board closely monitors the independence of the<br />
external auditors<br />
• regularly reviews the independence safeguards put in place<br />
by the external auditors<br />
• requires the rotation of the audit partner every seven years<br />
• policies to restrict the type of non-audit services which can<br />
be provided by the external auditors<br />
• undertakes a detailed monthly review of non-audit fees paid<br />
to the external auditor<br />
• imposes restrictions on the employment of ex-employees<br />
of the external auditor<br />
• the Audit, Risk & Compliance Committee meets regularly<br />
with management without the external auditors and with<br />
the external auditors without management<br />
p<br />
26<br />
<strong>2002</strong> QANTAS ANNUAL REPORT