Qantas 2007 Annual Report Download - page 47

45Qantas |Annual Report 2007
2007 Corporate Governance Statement
The Board is Structured to Add Value
Qantas currently has 12 Directors (see details on pages 40 to 43).
Ten Directors are Independent Non-Executive Directors elected by
shareholders. The Independent Non-Executive Directors are:
Director Year of Appointment
Margaret Jackson (Chairman) 1992
Paul Anderson 2002
Leigh Clifford 2007
Mike Codd 1992
Peter Cosgrove 2005
Patricia Cross 2004
Garry Hounsell 2005
James Packer 2004
John Schubert 2000
James Strong 2006
Independence
Independent Directors are those who have the ability to exercise their duties
unfettered by any business or other relationship and are willing to express
their opinions at the Board table free of concern about their position or the
position of any third party. The Board does not believe it is possible to draft
a list of criteria which are appropriate to characterise, in all circumstances,
whether a Non-Executive Director is independent. It is the approach and
attitude of each Non-Executive Director which is critical and this must be
considered in relation to each Director while taking into account all other
relevant factors, which may include whether the Non-Executive Director:
is a substantial shareholder (within the definition of section 9 of the
Corporations Act) of Qantas, or an officer of, or otherwise associated
directly with, a substantial shareholder of Qantas;
has, within the last three years, been employed in an executive capacity
by the Qantas Group;
has, within the last three years, been a principal of a material professional
adviser or a material consultant to the Qantas Group or an employee
materially associated with the service provided;
is a material supplier or customer of the Qantas Group, or an officer
of or otherwise associated directly or indirectly with, a material supplier
or customer;
has any material contractual relationship with the Qantas Group other
than as a Director;
has served on the Board for a period which could materially interfere with
the Director’s ability to act in the best interests of the Qantas Group (and it
is neither possible nor appropriate to assign a fixed term to this criteria); or
is free from any interest and any business or other relationship which
could, or could reasonably be perceived to, materially interfere with the
Director’s ability to act in the best interests of Qantas.
The Board Charter requires each Director to immediately disclose to the
Board if they have any concerns about their own independence.
All Independent Non-Executive Directors bring a real independent view
to the consideration of Board issues.
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Qantas believes that the following materiality thresholds are relevant when
considering the independence of Non-Executive Directors:
for Directors:
a relationship which accounts for more than 10 per cent of their
gross income (other than Director’s fees paid by Qantas); or
when the relationship is with a firm, company or entity, in respect
of which the Director (or any associate) has more than a 20 per cent
shareholding if a private company or two per cent shareholding if
a listed company; and
for Qantas:
in respect of advisers or consultants – where fees paid exceed
$2 million per annum;
in respect of suppliers – where goods or services purchased by the
Qantas Group exceed $100 million per annum (other than banks,
where materiality must be determined on a case by case basis); or
in respect of customers – where goods or services supplied by the
Qantas Group exceed $100 million per annum.
Qantas, as the principal Australian airline, has commercial relationships
with most, if not all, major entities in Australia. As such, in determining
whether a Non-Executive Director is independent, simply being a
non-executive director on the board of another entity is not, in itself,
sufficient to affect independence. Nevertheless, any Director on the board
of another entity is ordinarily expected to excuse themselves from any
meeting where that entity’s commercial relationship with Qantas is directly
or indirectly discussed.
Qantas has two Executive Directors, Geoff Dixon (Chief Executive Officer)
and Peter Gregg (Chief Financial Officer). These Directors are not treated
as independent.
Independent professional advice is available to the Directors if necessary,
at the expense of Qantas.
At the 2000 AGM, shareholders approved Qantas entering into Director
Protection Deeds with each Director.
Airline Partners Australia (APA) Bid
The Board managed any potential conflicts of interest that may have
arisen during the APA bid by establishing strict protocols to govern the
interaction between Qantas’ Executives and the consortium investors
and in the conduct of due diligence. The Board also appointed external
financial and legal advisers. In addition, the decision to recommend the
bid to Qantas shareholders (in the absence of a superior proposal and
subject to the receipt of an Independent Expert’s Report concluding that
the Bid was fair and reasonable) was one made solely by the Independent
Non-Executive Directors. Qantas’ Executive Directors did not participate
in the Board’s consideration of the terms of the proposal or the Bid.
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