Qantas 2004 Annual Report Download - page 42

2004 Corporate Governance Statement continued
THE BOARD RESPECTS THE RIGHTS OF SHAREHOLDERS continued
Auditor at Annual General Meeting
The external auditor attends the Annual General Meeting and is available to answer shareholder questions on:
the conduct of the audit;
the preparation and conduct of the auditor’s report;
the accounting policies adopted by Qantas in relation to the preparation of the financial statements; and
the independence of the auditor in relation to the conduct of the audit.
THE BOARD RECOGNISES AND MANAGES RISK
The businesses operated by Qantas are complex and involve a range of operational, commercial, financial and legal risks. Recognising this,
the Board has established a sound system of risk oversight and management and internal control designed to identify, assess, monitor and
manage risk.
Policies have been developed that include components relating to oversight, risk profile, risk management and assessing effectiveness
of risk oversight and management. Qantas is continually aligning its existing risk management and internal control frameworks with
principles included in the Australia/New Zealand Standard on Risk Management (AS/NZ 4360:1999) and the COSO (the Committee of
Sponsoring Organisations of the Treadway Commission) framework for evaluating internal controls.
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 Head of Internal Audit without the presence of
management.
Risk Management Executive Committee
Qantas has established a Risk Management Executive Committee (RMEC) which is made up of all members of the Executive Committee.
The RMEC meets regularly 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 RMEC prepares a monthly Risk Management Report for the
Board which is reviewed in detail by both the Audit Committee and the Safety, Environment & Security Committee.
Safety, Environment & Security Committee
In 1994, the Board established the Qantas Safety, Environment & Security Committee (SESC) which:
has four members, the Chief Executive Officer, two Independent Non-Executive Directors and the fourth, as required by the
Constitution, is a BA Director;
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 (www.qantas.com);
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/qualifications of Committee members is set out on pages 32 to 35. Membership of and attendance at 2004 Committee
meetings is detailed on page 45.
CEO/CFO Declaration
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:
the Financial Declaration is founded on a sound system of risk management and internal compliance and control which implements
the policies adopted by the Board; and
Qantas’ risk management and internal compliance and control system is operating effectively in all material respects.
40 Qantas Annual Report 2004