Qantas 2006 Annual Report Download - page 43

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Qantas Annual Report 2006
2006 Corporate Governance Statement
OVERVIEW
Corporate Governance is core to ensuring the creation, protection and
enhancement of shareholder value. The Board maintains, and ensures that
Qantas management maintains, the highest level of corporate ethics.
The Board comprises a majority of Independent Non-Executive Directors
who, together with the Executive Directors, have extensive commercial
experience and bring independence, accountability and judgment to the
Board’s deliberations to ensure maximum benefit to stakeholders including
shareholders, customers, suppliers, employees, government regulators and
members of communities where Qantas operates.
The Board endorses the ASX Corporate Governance Council’s Principles of Good
Corporate Governance and Best Practice Recommendations (ASX Principles).
THE BOARD LAYS SOLID FOUNDATIONS FOR
MANAGEMENT AND OVERSIGHT
The Board has adopted a formal Charter. A copy of the Board Charter
is available on the Corporate Governance section of the Qantas website
(http://www.qantas.com.au/info/about/corporateGovernance).
The Board is responsible for:
• promoting ethical and responsible decision-making;
• ensuring compliance with laws, tax obligations, regulations, appropriate
accounting standards and corporate policies (including the Qantas Code
of Conduct & Ethics);
• setting and reviewing strategic direction and approving the annual
operating budget;
• overseeing the Qantas Group, including its control and
accountability systems;
• monitoring the operating and financial performance of the Qantas Group;
• approving and monitoring major capital expenditure programs;
• appointing and removal of the Chief Executive Officer and Chief
Financial Officer;
• monitoring the performance of the Chief Executive Officer, Chief Financial
Officer and Executive Management;
• ensuring a clear relationship between performance and
executive remuneration;
• monitoring risk management;
• ensuring that the market and shareholders are fully informed of material
developments; and
• recognising the legitimate interests of stakeholders.
Directors receive formal letters of appointment setting out the key terms,
conditions and expectations of their appointment.
BOARD MEETINGS
The Board holds nine formal Meetings a year. Additional Meetings are
held as required. A two-day Meeting is held in May to review and approve
the strategy and financial plan for the next financial year. The Board also
meets with senior management to consider matters of strategic
importance to Qantas.
Details of the Directors, their qualifications, skills and experience are
detailed on pages 36-39. Attendance at 2005/06 Board and Committee
Meetings is detailed on page 49.
AUSTRALIAN PROVISIONS
The Qantas Constitution contains the following provisions required by the
Qantas Sale Act to ensure the independence of the Qantas Board and to
protect the airline’s position as the Australian flag carrier:
• head office must be in Australia;
• two-thirds of the Directors must be Australian citizens;
• Chairman must be an Australian citizen;
• quorum for a Directors’ Meeting must include a majority of Directors
who are Australian citizens;
• maximum 49 per cent aggregate foreign ownership;
• maximum 35 per cent aggregate foreign airline ownership; and
• maximum 25 per cent ownership by one foreign person.
THE BOARD IS STRUCTURED TO ADD VALUE
Qantas has 11 Directors (see details on pages 36-39). Nine 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
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.