Annual Report - AWB Limited

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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
Recommendation 9.3 - Clearly distinguish the structure of nonexecutivedirectors’ remuneration from that of executives.AWB practiceThe Remuneration Report forming part of the directors’ report(pages 41–54) clearly articulates the separate structure of AWB’snon-executive directors’ remuneration from that of executives.Unlike AWB executives, the non-executive directors do not receiveequity-based remuneration or performance-based remuneration.Other than statutory superannuation and voluntary additionalcontributions to superannuation, there are no schemes forretirement benefits for non-executive directors.Recommendation 9.4 - Ensure that payment of equity-basedexecutive remuneration is made in accordance with thresholdsset in plans approved by shareholders.AWB practiceAWB’s equity-based executive remuneration plans were approvedby shareholders in 2002. Payments made under the plans complywith thresholds set in the plans. Details in relation to the ‘atrisk’ component of executive remuneration are set out in theRemuneration Report forming part of the directors’ report onpages 41–54.Principle 10 – Recognise the legitimate interests of stakeholdersRecommendation 10.1 - Establish and disclose a code of conductto guide compliance with legal and other obligations tolegitimate stakeholders.AWB practiceAs discussed in Principle 3 above, AWB maintains businessprinciples + ways of working and a whistleblower policy whichdrive AWB’s compliance with legal and other obligations tolegitimate stakeholders. The business principles + ways of workingare available on AWB’s website (www.awb.com.au).Additional company policiesIn addition to the policies mentioned previously, AWB hasimplemented a range of policies and procedures governingits operations. Many relate to Board Operating Standards andProtocols which are detailed in the Board’s Corporate GovernanceManual. Other governance policies relevant to AWB stakeholdersare summarised below:Safety, Health and Environment (SH&E) PolicyAWB aims to provide and maintain both a workplace and workpracticeswhich are safe and healthy, and without adverse impactson the environment.AWB has determined that an integrated approach to themanagement of SH&E in the workplace is the most effectiveand sustainable approach. This SH&E Policy articulates theorganisational approach to the management of all aspects ofSH&E including broad SH&E objectives and specifically recognisingAWB’s obligations under the applicable legislation.The SH&E Policy is underpinned by an integrated SHE managementsystem which is broken into 10 strategic elements:• SH&E leadership• environment• hazard and compliance management• learning and development• major hazards• workplace health• contractor management• emergency management• incident and injury management• performance management.The SH&E management system allows a strategic and structuredapproach to the pro-active management of SH&E within theorganisation and its operations.In 2004, AWB became the first business in the grains industryto achieve AS4801 accreditation, the Australian ManagementStandard for occupational health and safety managementsystems. Landmark is expected to join AWB, by becomingone of the first agricultural organisations to achieve the sameaccreditation to AS4801 during 2008. This achievement will meanthat AWB as a whole will have a ‘SH&E best practice’ approach tothe management of SH&E which is externally and independentlyassessed.Sanctioned Trade PolicyA Sanctioned Trade Policy applies to all employees, contractors,agents and representatives of AWB and provides a standard forthe provision of trade services that involve sanctioned countries,individuals and entities.Anti Money Laundering and Counter-Terrorism Financing PolicyThe Anti Money Laundering and Counter-Terrorism FinancingPolicy sets out AWB’s approach for managing money launderingand terrorist financing risks within its operations. It will bethe foundation for the development of detailed policies andprocedures and associated compliance and risk mitigationcontrols.Sponsorships and Donations PolicyAWB’s Sponsorship and Donations Policy is designed to enhanceAWB’s relationship and reputation with AWB’s key stakeholders,including growers, customers and the financial, business andlocal communities in which AWB operates. The policy outlines thecriteria which must be addressed and met before any sponsorshiparrangements are agreed to.Decisions on charitable donations above $100,000 and all politicaldonations are reserved to the Board and all charitable donationsover $50,000 require reporting to the Board.32 www.awb.com.au
Page 7 and 8: 6 www.awb.com.auFrom Peter Polson,C
Page 9 and 10: From Gordon Davis,Managing Director
Page 11 and 12: AWB todayOur client base extends to
Page 13 and 14: Landmark Rural ServicesRural Servic
Page 15 and 16: Financial Services (EBITDA)2004 44.
Page 17 and 18: Commodity ManagementCommodity Manag
Page 19 and 20: CorporateCredit ratingsAWB maintain
Page 21 and 22: People and communityPeopleThe busin
Page 23 and 24: 22 www.awb.com.auManagement team
Page 25 and 26: 24 www.awb.com.au
Page 27 and 28: Governance at AWBAWB’s Board and
Page 29 and 30: process was conducted within the co
Page 31: Information is regularly communicat
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AWB LIMITED Notes to and forming pa
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120 www.awb.com.auAWB LIMITED Indep
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AWB LIMITED Australian Securities E
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AWB LIMITED Notes124 www.awb.com.au
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AWB Limited ABN 99 081 890 459380 L
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Annual Report - AWB Limited

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