24.02.2010 annual report 2009.pdf - Woodside

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34 1 Corporate Governance at Woodside Woodside is committed to a high level of corporate governance and fostering a culture that values ethical behaviour, integrity and respect. This statement reports on Woodside’s key governance principles and practices. These principles and practices are reviewed regularly and revised as appropriate to reflect changes in law and developments in corporate governance. Woodside’s corporate governance model is set out below. During 2009 the company reviewed and made substantial improvements to the Woodside Audit & Risk Committee Human Resources & Compensation Committee Independent Assurance External Auditors Internal Audit Management System (WMS) which sets out how Woodside provides management governance and assurance. The WMS defines how Woodside will deliver its business objectives and the boundaries within which Woodside employees and contractors are expected to work. The company, as a listed entity, must comply with the Corporations Act 2001 (Cwlth) (Corporations Act), the Australian Securities Exchange (ASX) Listing Rules (ASX Listing Rules) and other Australian and international laws. The ASX Listing Rules require the company to report on the extent to which it has followed the Corporate Governance Recommendations contained in the ASX Corporate Governance Council’s (ASXCGC) second Woodside Corporate Governance Model Shareholders Delegation Board Chief Executive Officer Policies Authorities Framework Accountability edition of its Corporate Governance Principles and Recommendations (August 2007). Details of Woodside’s compliance with the ASXCGC Recommendations are set out below. A checklist cross-referencing the ASXCGC Recommendations to the relevant sections of this statement and the Remuneration Report is provided on page 43 of this report and is published in the corporate governance section of Woodside’s website (www.woodside.com.au). Woodside believes that, throughout the 2009 year and to the date of this report, it has complied with all the ASXCGC Recommendations. Nominations Committee Management Governance and Assurance Mission Vision Values Policies Management Standards Operating Standards Woodside Management System Sustainability Committee Management Committees Standards Woodside Petroleum Ltd | Annual Report 2009
2 Board of Directors 2.1 Board Role and Responsibilities ASXCGC Recommendations 1.1, 1.3 The Board has approved a formal Board Charter which details the Board’s role, powers, duties and functions. The central role of the Board is to set the company’s strategic direction, to select and appoint a CEO and to oversee the company’s management and business activities. In addition to matters required by law to be approved by the Board, the following powers are reserved to the Board for decision: the appointment and removal of the CEO and the Company Secretary and determination of their remuneration and conditions of service; approving the appointment and, where appropriate, the removal of executives who report directly to the CEO together with their remuneration and conditions of service; approving Group remuneration issues, including periodic adjustments and short and long term incentive payments; approving senior management succession plans and significant changes to organisational structure; authorising the issue of shares, options, equity instruments or other securities; authorising borrowings, other than in the ordinary course of business, and the granting of security over the undertaking of the company or any of its assets; authorising expenditures which exceed the CEO’s delegated authority levels; approving strategic plans and budgets; approving the acquisition, establishment, disposal or cessation of any significant business of the company; approving annual and half year reports and disclosures to the market that contain or relate to financial projections, statements as to future financial performance or changes to the policy or strategy of the company; approving policies of company-wide or general application; the appointment of directors who will come before shareholders for election at the next Annual General Meeting (AGM); and establishing procedures which ensure that the Board is in a position to exercise its powers and to discharge its responsibilities as set out in the Board Charter. Other than as specifically reserved to the Board in the Board Charter, responsibility for the management of Woodside’s business activities is delegated to the CEO who is accountable to the Board. The Board Charter and the delegation of Board authority to the CEO are reviewed regularly. A copy of the Board Charter is available in the corporate governance section of Woodside’s website. 2.2 Board Composition ASXCGC Recommendations 2.1, 2.2, 2.3, 2.6 The Board is comprised of eight nonexecutive directors and the CEO. Details of the directors, including their qualifications, experience, date of appointment and independent status, are set out on pages 31 to 32. The Board considers that collectively the directors have the range of skills, knowledge and experience necessary to direct the company. The non-executive directors contribute operational and international experience, an understanding of the industry in which Woodside operates, knowledge of financial markets and an understanding of the health, safety, environmental and community matters that are important to the company. The CEO brings an additional perspective to the Board through a thorough understanding of Woodside’s business. In assessing the composition of the Board, the directors have regard to the following principles: the Chairman should be non-executive, independent and an Australian citizen or permanent resident; the role of the Chairman and the CEO should not be filled by the same person; the CEO should be a full-time employee of the company; the majority of the Board should comprise directors who are both nonexecutive and independent; the Board should represent a broad range of qualifications, experience and expertise considered of benefit to the company; and the number of Shell-nominated directors, as a proportion of the Board, should normally be in the proportion that Shell’s holding of fully paid ordinary shares in the company bears to all of the issued fully paid ordinary shares in the company. For the time being the Board has determined that the number of directors on the Board should be eight nonexecutive directors and the CEO. This number may be increased (providing it does not exceed 15) where it is felt that additional expertise is required in specific areas, where an outstanding candidate is identified or to ensure a smooth transition between outgoing and incoming nonexecutive directors. 2.3 Chairman ASXCGC Recommendations 2.2, 2.3 The Chairman of the Board, Mr Michael Chaney, is an independent, non-executive director and a resident Australian citizen. The Chairman is responsible for leadership and effective performance of the Board and for the maintenance of relations between directors and management that are open, cordial and conducive to productive cooperation. The Chairman’s responsibilities are set out in more detail in the Board Charter. A copy of the Board Charter is available in the corporate governance section of Woodside’s website. Mr Chaney is also Chairman of National Australia Bank Limited (NAB). The Board considers that neither his Chairmanship of NAB, nor any of his other commitments (listed on page 31), interfere with the discharge of his duties to the company. The Board is satisfied that Mr Chaney commits the time necessary to discharge his role effectively. 2.4 Director Independence ASXCGC Recommendations 2.1, 2.6 The independence of a director is assessed in accordance with Woodside’s Policy on Independence of Directors. A copy of the Policy on Independence of Directors is available in the corporate governance section of Woodside’s website. In accordance with the policy, the Board assesses independence with reference to whether a director is non-executive, not a member of management and who is free of any business or other relationship that could materially interfere with, or could reasonably be perceived to materially interfere with, the independent exercise of their judgement. Governance 35
Page 1 and 2: Annual Report 2009
Page 3 and 4: Performance at a glance Production
Page 5 and 6: Chairman’s overview The quality o
Page 7 and 8: gas assets and infrastructure in Au
Page 9 and 10: $ million 2,250 2,000 1,750 1,500 1
Page 11 and 12: 'Woodside Donaldson', Samsung Heavy
Page 13 and 14: Review of assets North West Shelf P
Page 15 and 16: Notes to the Reserves statement 1
Page 17 and 18: 1990 First gas and condensate produ
Page 19 and 20: North West Shelf Karratha Gas Plant
Page 21 and 22: Mutineer-Exeter oil field INTEREST
Page 23 and 24: The platform substructure (or jacke
Page 25 and 26: Browse LNG The way forward to deliv
Page 27 and 28: Other international During 2009 we
Page 29 and 30: Health and safety We believe that t
Page 31 and 32: Our business principles Woodside's
Page 33 and 34: Michael A Chaney, AO BSc, MBA, Hon
Page 35: Corporate governance statement Cont
Page 39 and 40: 2 Board of Directors (continued) Pr
Page 41 and 42: 3 Committees of the Board (continue
Page 43 and 44: executive directors that do not rec
Page 45 and 46: 8 ASX Corporate Governance Council
Page 47 and 48: Overview This Remuneration Report f
Page 49 and 50: Variable Annual Reward - Executive
Page 51 and 52: The Board will determine whether PR
Page 53 and 54: Table 2 - Total remuneration paid t
Page 55 and 56: Table 9 - Summary of executives’
Page 57 and 58: Table11 - Summary of terms and cond
Page 59 and 60: Table 12b - RTSR-tested and TSR-tes
Page 61 and 62: Table 13 - Compensation of executiv
Page 63 and 64: 2009 Financial Report Contents Inco
Page 65 and 66: 2009 $m Statement of comprehensive
Page 67 and 68: Cash flows from/(used in) operating
Page 69 and 70: Issued and fully paid shares (Note
Page 71 and 72: 1. Summary of significant accountin
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Page 85 and 86: 3. Revenue and expenses (a) Revenue
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4. Taxes (a) Tax expense/(income) c
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4. Taxes (continued) (e) Unrecognis
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6. Dividends paid and proposed (con
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11. Other assets (a) Other assets (
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14. Other plant and equipment (non-
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20. Provisions Consolidated Restora
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23. Retained earnings 2009 $m Notes
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25. Financial and capital risk mana
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27. Employee benefits (a) Woodside
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27. Employee benefits (continued) (
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28. Key management personnel compen
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28. Key management personnel compen
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31. Contingent liabilities 2009 $m
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33. Joint ventures (continued) (b)
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35. Subsidiaries (continued) (b) De
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In accordance with a resolution of
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Number of shareholdings There were
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Key announcements 2009 JANUARY Wood
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quick reference guide Africa 11 Air
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10 year comparative data summary Ye
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