Annual Report - AWB Limited

Recommendation 7.2 - The Board or appropriate Boardcommittee should establish policies on risk oversight andmanagement. The chief executive officer (or equivalent) and thechief financial officer (or equivalent) should state to the board inwriting that:7.2.1 the statement given in accordance with best practicerecommendation 4.1 (the integrity of financialstatements) is founded on a sound system of riskmanagement and internal compliance and controlwhich implements the policies adopted by the board7.2.2 the company’s risk management and internal complianceand control system is operating efficiently and effectivelyin all material respects.AWB practiceThe Managing Director and the Chief Financial Officer have statedin writing to the board that the statement in accordance with ASXbest practice recommendation 4.1 is founded on a sound systemof risk management and internal compliance and control, whichimplements the policies adopted by the Board, and that system ofrisk management and internal compliance is operating efficientlyand effectively in all material respects.Each member of the AWB management team is similarly requiredto attest that a sound system of risk management, compliance andcontrol exists within the business units or functions under his orher control.Principle 8 – Encourage enhanced performanceRecommendation 8.1 - Disclose the process for performanceevaluation of the Board, its committees and individual directors,and key executives.AWB practicePerformance reviewThe Board has adopted a policy of annual performance evaluationfor the Board, Board committees and individual directors. Howeverdue to the restructure of the company (see page 26 for details),an evaluation process was not conducted during the reportingperiod. This is viewed as a departure from recommendation 8.1.It is the principal responsibility of the Chairman and theNomination & Remuneration Committee to formally review, at leaston an annual basis, the performance of the Managing Director.At the end of each Board meeting, the Board critiquesthe meeting.Facilitating performance by educationAWB provides structured induction programs for every newdirector elected or appointed to the Board. The objective of theinduction program is to give directors an overview of AWB’scorporate structure, directors’ duties, obligations and protocols,risk management and business operations, such that they canparticipate fully and actively in Board decision making at theearliest opportunity.AWB provides ongoing assistance to the further education ofdirectors where it can be shown to add value to the director’s roleand competencies.Access to informationDirectors are entitled to any information they need or require toexercise their functions and to fulfil their duties as directors and,subject to the prior approval by the Chairman (which is not to beunreasonably withheld), may seek independent legal advice at thecompany’s expense on any issue submitted to the Board.Role of the Company SecretaryThe Company Secretary, Peter Patterson, supports the Board’seffectiveness by monitoring Board policy and procedures andcoordinating Board and committee meeting agendas, meetingproceedings, information packs, meeting minutes and followupactions. The Company Secretary is accountable to the Board,through the Chairman.Principle 9 – Remunerate fairly and responsiblyRecommendation 9.1 - Provide disclosure in relation to thecompany’s remuneration policies to enable investors tounderstand (i) the costs and benefits of those policies and (ii) thelink between remuneration paid to directors and key executivesand corporate performance.AWB practiceInformation in relation to AWB’s remuneration policies and detailsabout the remuneration paid to directors and executives are setout in the Remuneration Report forming part of the directors’report (pages 41–54).Recommendation 9.2 - The board should establish aremuneration committee.AWB practicePurpose, composition and responsibilities of the committeeThe Board has a combined Nomination & RemunerationCommittee.The Nomination & Remuneration Committee reviews AWB’sremuneration setting framework and policies, including theremuneration of the Board and the Managing Director.Refer to page 34–35 for details of the committee’s compositionand membership.Refer to pages 34–35 for details of the qualifications andexperience of committee members.According to the Board’s assessment of director independence(refer to independence statement on page 26), all members ofthe Nomination & Remuneration Committee are independent.The Nomination & Remuneration Committee met 5 times duringthe financial year. Refer to page 40 for details of the attendanceby committee members at those meetings.The Nomination & Remuneration Committee charter is availableon the Corporate Governance section of AWB’s website(www.awb.com.au).www.awb.com.au 31