Qantas 2005 Annual Report Download - page 38

36
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 Qantas 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:
x 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;
x has, within the last three years, been employed in an executive
capacity by the Qantas Group;
x 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;
x 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;
x has any material contractual relationship with the Qantas
Group other than as a Director;
x 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
x 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 Qantas Board Charter requires each Director to immediately
disclose to the Board if he/she has any concern about his/her own
independence.
All Qantas Independent Non-Executive Directors bring a real
independent view to the consideration of Board issues. In
addition, two new Independent Non-Executive Directors have
been appointed in the last 12 months (Garry Hounsell and Peter
Cosgrove). The appointment of these new Directors has refreshed
the Board and incorporated new ideas and energy.
Qantas believes that the following materiality thresholds are
relevant when considering the independence of Non-Executive
Directors:
x for Directors:
x a relationship which accounts for more that 10% of
his/her gross income (other than Director’s fees paid by
Qantas); or
x when the relationship is with a firm, company or entity,
in respect of which the Director (or any associate) has
more than a 20% shareholding if a private company or
2% shareholding if a listed company; and
x for Qantas:
x in respect of advisers or consultants – where fees paid
exceed $2 million pa;
x in respect of suppliers – where goods or services
purchased by the Qantas Group exceed $100 million pa
(other than banks, where materiality must be determined
on a case by case basis); or
x in respect of customers – where goods or services supplied
by Qantas Group exceed $100 million pa.
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 Annual General Meeting (AGM), shareholders
approved Qantas entering into Director Protection Deeds with
each Director.
NOMINATIONS COMMITTEE
In May 2005, the Board separated the functions previously
undertaken by the Chairman’s Committee into the Nominations
Committee and Remuneration Committee.
The Nominations Committee:
x has two Members who are Independent Non-Executive
Directors;
x is chaired by Margaret Jackson;
x 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
x assists the Board in fulfilling its Corporate Governance
responsibilities in regards to:
x Board appointments and performance;
x Directors’ induction program;
x Committee Membership;
x Executive Management succession planning, appointments
and terminations; and
x other matters referred to the Committee by the Board.
The experience and qualifications of Members of the Nominations
Committee are detailed on pages 33 and 34. Membership of
and attendance at 2004/05 Chairman’s Committee Meetings are
detailed on page 46.
Spirit of Australia
~2005 Corporate Governance Statement~