Corporate governancewww.awb.com.au 25
Governance at <strong>AWB</strong><strong>AWB</strong>’s Board and management are committed to ensuringstakeholders’ expectations of sound corporate governancepractices are met.The Board determines the corporate governance arrangementsfor <strong>AWB</strong>. <strong>AWB</strong> <strong>Limited</strong>’s Constitution (Constitution) (which isavailable on <strong>AWB</strong>’s website www.awb.com.au) is a key governancedocument. The previous Constitution (which applied at thecommencement of the reporting period) was framed by theAustralian Government, in consultation with the Grains Council ofAustralia, as part of the process of privatising the Australian WheatBoard, effective in July 1999. As part of a program of constitutionalreform, on 3 September 2008 shareholders approved amendmentsto the previous Constitution. The principal effects of theamendments were that <strong>AWB</strong>’s primary object ceased to beinvolvement in “Grain Trading”, and the immediate redemption ofthe A class shares (which could only be held by wheat growers).On 22 October 2008, shareholders approved the adoption of anew Constitution, appropriate for a company with a single classof ordinary shares. The new Constitution is in relatively standardform for an ASX listed company, but has three special provisions:• one of <strong>AWB</strong>’s objects is to be involved in grain trading• at least two directors must be directly or indirectly involvedin agricultural production on a commercial scale• a 10% shareholding limit applies, which ceases in October2011 (three years after adoption of the new Constitution).Compliance with ASX Principles andRecommendationsThe Board has received a Corporate Governance <strong>Annual</strong>Attestation from <strong>AWB</strong> management regarding compliance of allaspects of the business with <strong>AWB</strong>’s operating standards, ethicalstandards, areas of non-compliance and risk managementexecution and strategy.Details of <strong>AWB</strong>’s compliance (or otherwise) with the ASX CorporateGovernance Council’s Principles of Good Corporate Governanceand Best Practice Recommendations and its key corporategovernance practices for the reporting period ended 30 September2008 are disclosed in this corporate governance statement.Principle 1 - Lay solid foundations for management andoversightRecommendation 1.1 - Formalise and disclose the functionsreserved to the board and those delegated to management.<strong>AWB</strong> practiceRoles and responsibilities of the Board and managementThe Board is responsible for the overall governance of <strong>AWB</strong> andits strategic direction. This includes setting goals, monitoringperformance, and ensuring that <strong>AWB</strong>’s internal control andreporting procedures are effective and ethical and that <strong>AWB</strong>’sstrategic direction provides value for shareholders.<strong>AWB</strong> has adopted a formal Board charter.The Board has delegated general authority to the ManagingDirector to manage, control and direct the business of thecompany, whilst reserving certain high level matters for the Board’sown decision. In addition to this general authority, the Boardhas approved a management authorisations policy to formalisedelegations to the Managing Director and to the managementteam members who report directly to the Managing Director.The matters reserved to the Board include strategic matters,corporate governance, the appointment of corporate officers,capital raisings and other share capital matters, major acquisitionsand matters involving amounts over specified limits. Themanagement authorisations policy sets out the financial andnon-financial parameters within which managers can exercisedelegated authorities.The Board has established Board committees to assist theBoard perform its duties and discharge its responsibilities. Allcommittees have charters approved by the Board. The existence ofa committee does not, however, reduce the overall responsibilityof the Board, which assumes ultimate responsibility for anydecision making.The Board and the committee charters and a summary of themanagement authorisations policy are available on the CorporateGovernance section of <strong>AWB</strong>’s website.Allocation of individual responsibilitiesUpon appointment to the Board, each director receives acomprehensive letter of appointment which sets out the key termsand conditions of their appointment.Although under the previous Constitution directors wereelected by particular shareholders, directors are not consideredthe servants or agents of particular groups of shareholders orrequired to follow directions or expectations from any group ofshareholders (whether constituted by class or region).The Managing Director, the Chief Financial Officer and otherkey executives each have letters of appointment, or contractualequivalents, describing their terms of office, duties, rights andresponsibilities and their entitlement on termination.Principle 2 - Structure of the board to add valueRecommendation 2.1 - A majority of the board should beindependent directors.<strong>AWB</strong> practiceThe profiles of the directors at the date of this report, including adescription of their skills, experience and expertise relevant to theposition of director, are set out on pages 34–45.The Board met 13 times during the financial year. Refer to page 40for details of the attendance by directors at those meetings.Assessment and disclosure of independenceThe Board has adopted a definition of independence. Anindependent director is independent of management and free ofany business or other relationship that could materially interferewith, or could reasonably be perceived to materially interfere with,the exercise of their unfettered and independent judgement.26 www.awb.com.au