Telstra 2012 Annual Report Download - page 59

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Telstra Corporation Limited and controlled entities
Corporate Governance Statement
Telstra does not provide retirement benefits for non-executive
Directors other than statutory superannuation contributions.
Each year, the Board reviews the CEO’s performance against
agreed measures, broader expectations and other relevant
factors. The CEO undertakes a similar exercise in relation to
senior management. The results of the CEO's annual
performance review of senior management are considered by
the Board. The process for evaluating the performance of the
CEO and senior executives is discussed in greater detail in
Telstra’s Remuneration Report (particularly in the context of
determining levels of compensation and awards). In fiscal 2012,
the performance of the CEO and key management personnel
was reviewed in the manner set out in the Remuneration Report.
Technology Committee
The Technology Committee allows the Board to review
technology developments which may be relevant to Telstra’s
business in greater detail than is possible at Board meetings.
The Committee regularly reviews product development
activities, including proposed new technology products and
timelines to market. The Committee's primary purpose is
educative and all Directors are encouraged to attend Committee
meetings, which are scheduled to coincide with Board meetings.
SHAREHOLDER COMMUNICATIONS
Telstra is committed to:
• open, clear, accurate and timely communications with its
shareholders about matters affecting the value of their
investment in the Company;
• making appropriate use of technology to inform and engage
its shareholders; and
• ensuring all communications are consistent with Telstra’s
continuous disclosure and other applicable legal obligations.
Telstra values a direct, two-way dialogue with shareholders and
believes it is important not only to provide relevant information
as quickly and efficiently as possible, but also to listen,
understand shareholders’ perspectives and respond to their
feedback.
The specific initiatives Telstra has put in place to make that
easier include:
• maintaining an investor relations website;
• writing directly to shareholders on significant issues that
affect their investment;
• placing all announcements made to the market, including
transcripts of investor briefings and related information, on its
website after this information has been released to ASX;
• webcasting important events such as briefings and the AGM;
and
• using electronic communications to advise those
shareholders who have provided their email address, of
significant matters.
RISK OVERSIGHT AND MANAGEMENT
Management of risks
Telstra faces a variety of risks due to the complexity of its
business and the dynamic business environment in which it
operates. The effective management of risks enhances
Telstra’s ability to achieve its financial, customer and people
goals and to meet its legal and compliance responsibilities,
thereby protecting and enhancing shareholder value. Telstra’s
commitment is to manage those risks that arise in the course of
Telstra’s business to an acceptable level, so as to maximise
opportunities and minimise negative outcomes. Recognising
this, Telstra continues to improve its approach for managing,
monitoring and reporting risks related to the successful pursuit
of its business objectives. Risks are monitored and reported on
regularly throughout the year by management and the Board as
part of the strategic planning, business planning, budgeting and
performance management processes.
This approach is supported by Telstra’s Risk Management
framework which includes the Telstra Risk Management Policy
and Risk Management methodology and tools. The framework
aligns with ISO 31000 Risk Management – Principles and
Guidelines, the global standard for risk management, and is also
supported by Telstra’s Business Principles and a number of
other policies that seek to manage risks including: Credit
Management Transactions; Regulatory Risk Management and
Strategy Policy; Tax Risk Management and Assurance Policy;
and Treasury Transactions.
Telstra regularly reviews its Risk Management framework to
ensure that it continues to effectively promote and enable the
identification, management and monitoring of risks across the
Company.
Risk management roles and responsibilities
Risk management occurs at all levels of the Company. The
Board has ultimate responsibility for reviewing Telstra’s actual
and potential material business risks, approving the risk
management framework policy and overseeing Telstra’s
strategic risk management and internal control framework and
reporting system.
The Audit Committee assists the Board in discharging these
responsibilities by monitoring and advising on matters relating to
risk management including:
• overseeing management’s design and implementation of
Telstra’s risk management systems; and
• reviewing and monitoring the adequacy and effectiveness of
management’s reporting and risk management responses
and internal control systems.
The CEO, supported by the CEO Leadership Team, is
accountable for ensuring that Telstra management implements
an effective risk management and internal control framework to
identify, manage and monitor the company’s risks and reports to
the Board on whether those risks are being managed effectively.