2001 Annual Report - OneSteel

Corporate Governance (continued)Committee are to:• review the corporate governance procedures ofthe Company;• recommend new nominees for membership ofthe Board;• review the remuneration of non-executive directorsand recommend any changes to the Board;• advise the Board on remuneration policies andpractices relating to employees;• make specific recommendations to the Board onremuneration packages and policies applicable tosenior management;• advise the Board in relation to share-option plans,incentive performance packages and successionplanning;• review processes relating to the identification anddevelopment of key high potential employees;and• ensure adequate succession planning is in place.Remuneration levels are set competitively toattract the most qualified and experiencedsenior executives. The Committee also considersindependent advice on appropriateremuneration packages.The Managing Director and relevant senior staff areinvited to Governance and Remuneration Committeemeetings at the discretion of the Committee.AUDIT AND COMPLIANCE COMMITTEEThe role of the Audit and Compliance Committee isset out in a charter which has been approved bythe Board. The role of the Committee is to advise onthe establishment and maintenance of a frameworkof internal control and compliance reporting for themanagement of the company. The responsibilities ofthe Committee are to:• review the financial reports prior to the externalrelease;• monitor the activities of the internal audit function;• review internal and external audit reports toensure that where significant deficiencies incontrols or procedures have been identified,management takes prompt remedial action;• liaise with external auditors to ensure that theannual and half-yearly audits are conductedeffectively;• monitor the establishment of an appropriateinternal control framework;• review major capital project post audits;• monitor funding commitments and availability;• assess and review business risk; and• review major non-financial regulatory mattersthrough the use of a compliance monitoringregime covering the following areas of exposure:– asset protection;– trade practices;– discrimination and harassment;– conflict of interest; and– ethical standards.The Managing Director, relevant senior staff and theinternal and external auditors are invited to Auditand Compliance Committee meetings at thediscretion of the Committee.OCCUPATIONAL HEALTH, SAFETY AND ENVIRONMENTCOMMITTEEThe role of the Occupational Health, Safety andEnvironment Committee is set out in a charter whichhas been approved by the Board. Theresponsibilities of the Committee, which relate tooccupational health, safety and the environment,are to:• review all significant policies and changes theretoand, where appropriate, recommend them to theBoard;• monitor and report to the Board as appropriateon adequacy of management systems;• monitor and report to the Board as appropriateon the adequacy of performance andcompliance;• ensure adequate internal and external auditcoverage for all major risks and report to theBoard on any issues arising from this coverage, inparticular the management of environmental risksand post-divestment liabilities; and• report to the Board as appropriate on any othersignificant health, safety and environment issues.The Managing Director and relevant senior staff areinvited to Committee meetings at the discretion ofthe Committee.RISK MANAGEMENTThe Audit and Compliance Committee providesadvice to the Board and reports on the status ofbusiness risks to the consolidated entity throughintegrated risk management programs aimed atensuring risks are identified, assessed andappropriately managed. Major business risks arisefrom such matters as actions by competitors,technological developments, litigation or potentiallitigation, government policy changes, interest ratemovements, the impact of exchange rate movementson the price of raw materials and sales, difficultiesin sourcing raw materials, and purchase,development and use of information systems.The consolidated entity’s risk management policiesand procedures cover areas such as theenvironment, occupational health and safety,property, financial reporting and internal controls.Except for financial reporting which is handledcentrally, each business operational unit isresponsible and accountable for implementing andmanaging the standards required by the riskmanagement programs.Comprehensive practices are established such that:• management systems are monitored and reviewedto achieve high standards of performance andcompliance in areas such as the occupationalhealth and safety and environment;• capital expenditure and revenue commitmentsabove a certain size obtain prior Board approval;• financial exposures are controlled, including theuse of derivatives; and• business transactions are properly authorisedand executed.The internal audit function is outsourced to KPMG.The internal audit program is aimed at identifying28