Qantas 2006 Annual Report Download - page 46

44
2006 Corporate Governance Statement
INTERNAL AUDIT
Qantas has an effective Internal Audit function which is materially involved
in risk identification and management. The Internal Audit function is
independent of the external auditor, has full access to management
and the right to seek information and explanation. The Audit Committee
oversees the scope of the Internal Audit and has access to the Group
General Manager Internal Audit without the presence of management.
SAFETY & RISK LEADERSHIP COMMITTEE
Qantas has established a Safety & Risk Leadership Committee (SRLC), whose
members include Executive Management. The SRLC meets quarterly to identify
all major risks, ensure appropriate risk management plans are in place and to
monitor the effectiveness of the implementation of the risk management plans.
The SRLC prepares a bi-monthly Corporate Risk Management and Internal Audit
Activity Report for the Board which is reviewed in detail by both the Audit
Committee and the SESC.
SAFETY, ENVIRONMENT & SECURITY COMMITTEE
In 1994, the Board established the SESC which:
• has four Members, the Chief Executive Officer and three Independent
Non-Executive Directors;
• is chaired by Mike Codd, an Independent Non-Executive Director;
• has a written Charter which is available on the Corporate Governance
section of the Qantas website (http://www.qantas.com.au/info/about/
corporateGovernance); and
• is responsible for monitoring:
•
safety, occupational health, the protection of the environment and
operational security;
•
operational risk management (other than the business risk management
issues delegated to the Audit Committee) to ensure that the
appropriate risk management procedures are in place to protect the
airline, its passengers, its employees and the community; and
•
compliance with all operational legal and regulatory obligations
(other than the business compliance obligations monitored by the
Audit Committee).
The experience and qualifications of Members of the SESC are detailed on
pages 36-39. Membership of and attendance at 2005/06 SESC Meetings are
detailed on page 49.
CHIEF EXECUTIVE OFFICER / CHIEF FINANCIAL OFFICER DECLARATION
In accordance with Recommendation 7.2 of the ASX Principles, at the time
the Chief Executive Officer and Chief Financial Officer provide the Board
with the Financial Declaration, they also state to the Board that, in respect
of the entire reporting period:
“1.1 the statement given in accordance with Recommendation 4.1 (the
integrity of financial statements) is founded on a sound system of risk
management and internal compliance and control which, in all material
respects, implements the policies which have been adopted by the
Board of Directors either directly or through delegation to senior
executives; and
1.2 the risk management and internal compliance and control systems are
operating effectively, in all material respects, based on the risk
management statement adopted by Qantas. This statement incorporates
as its foundation the principles included in the Australian/New Zealand
Standard on Risk Management (AS/NZS 4360:2004).
2. The statements given in accordance with Recommendation 7.2 (above)
regarding the risk management and internal compliance and control
system provide a reasonable, but not absolute level of assurance and do
not imply a guarantee against adverse events or more volatile outcomes
arising in the future.”
THE BOARD ENCOURAGES ENHANCED PERFORMANCE
The Nominations Committee is responsible for implementing a process to
evaluate the Board’s performance.
A formal review of Board performance was undertaken during the year by
the Board and an external consultant. The Board and its external consultant
discussed the results of the review at the Board’s May 2006 Meeting.
The Chairman discusses performance with each Director during the year.
A formal induction program is available to new Directors to ensure they
have a working knowledge of Qantas and the airline industry.
The Directors have open access to all relevant information, there are regular
management presentations and visits to interstate/offshore operations.
Directors may meet independently with management at any time to discuss
areas of interest or concern.
THE BOARD REMUNERATES FAIRLY AND RESPONSIBLY
The Qantas Executive Remuneration Philosophy and Objectives is set out in
full in the Directors’ Report (from page 54).
REMUNERATION COMMITTEE
The Board has a Remuneration Committee which:
• has three Members who are Independent Non-Executive Directors;
• is chaired by James Strong;
• has a written Charter which is available on the Corporate Governance
section of the Qantas Website (http://www.qantas.com.au/info/about/
corporateGovernance); and
• is responsible for developing and recommending to the Board:
•
remuneration policies for Non-Executive Directors;
•
remuneration policies for the Chief Executive Officer and Chief
Financial Officer;
•
remuneration policies for Executive Management;
•
executive option and share grants;
•
human resources policies; and
•
other matters referred to the Committee by the Board.
The experience and qualifications of Members of the Remuneration
Committee are detailed on pages 36-39. Membership of and attendance
at 2005/06 Remuneration Committee Meetings are detailed on page 49.
The remuneration of the Key Management Personnel is disclosed in the
Remuneration Report from page 61. All equity-based executive
remuneration is made in accordance with plans approved by shareholders.
On retirement, Directors are entitled to statutory superannuation and
certain travel entitlements which are reasonable and standard practice
in the aviation industry (see page 58).
QANTAS RECOGNISES THE LEGITIMATE INTERESTS
OF STAKEHOLDERS
The Board has a formal code of conduct and ethics which is available
on the Corporate Governance section of the Qantas website
(http://www.qantas.com.au/info/about/corporateGovernance). Qantas
also has formal policies relating to its legal and other obligations to all
legitimate stakeholders. These include areas such as safety, service standards,
occupational health and safety, employment practices, staff and contractor
training, fair trading, consumer privacy and environmental protection. Each
policy includes procedures for compliance and monitoring effectiveness.