Principle

ENERGEX Governance in Summary

• Foundations for management and oversight

• The role and responsibilities of the Boards and Committees of the Boards are defined in Charters for each body.
• Management’s responsibilities are well defined and documented through formal position descriptions, performance agreements and Board-approved delegation of authority policies.
• Monthly Board meetings are convened (focusing on strategy and structure with a clear delineation between the Board and management responsibilities).
• A comprehensive Corporate Governance Manual defines the Board governance systems and supports Directors and senior managers in undertaking their governance responsibilities.
  
  

• Structure the Board to add value

• The ENERGEX Limited Board of Directors is appointed by the Governor-in-Council.
• Directors are generally independent, but where a related interest exists this is declared by the Director, who does not participate in the Board consideration of relevant matters. An annual review of Director’s pecuniary interests is also undertaken.
• All Directors of ENERGEX Limited are non-executive Directors (including the Chairmen).
• Details of Directors’ experience, expertise and attendance at Board and Committee meetings are also disclosed in the ENERGEX Annual Report.
  
  

• Promote ethical and responsible decision making

• As ENERGEX is a Government Owned Corporation, no Director or employee holds or trades securities in any ENERGEX Group Company.
• A number of governance policies exist, including the ENERGEX Code of Conduct, a Delegation of Authority Policy and a Conflict of Interest Policy.  Each of these policies applies to the Board and all employees. 
• ENERGEX adheres to strategic sourcing procedures and policies that comply with State Purchasing Policy.
• An extensive system of documented and controlled operating policies is in place (ENERGEX Business Management System).
  

• Safeguard integrity in financial reporting

• The CEO and CFO routinely certify the accuracy of the financial statements to the Boards.
• An Audit and Compliance Committee operates for ENERGEX Limited.
• The Audit and Compliance Committee has a clear operating Charter that is regularly reviewed.
• Audit and Compliance Committee membership and attendance are disclosed in the Annual Report.
• The internal audit function was supported by Deloitte during 2006/07.
• The external audit function is performed by the Queensland Audit Office.
  
  

• Make timely and balanced disclosure

• An extensive continuous reporting regime is in place in relation to the ENERGEX Group’s shareholding Ministers (including quarterly reporting in relation to the ENERGEX Statement of Corporate Intent, which is negotiated and completed with the shareholding Ministers on an annual basis).
  
  

• Respect the rights of shareholders

• Under the Government Owned Corporations Act 1993, shareholding Ministers are advised in a timely manner of all issues likely to have a significant financial, operating, social or environmental impact.
• Regular scheduled briefings between the Chairmen and the Portfolio Minister occur.
• Shareholder approvals are sought as appropriate, pursuant to legislation and shareholder policy guidelines.
  
  

• Recognise and manage risk

• ENERGEX Limited has in place the following risk related Committees:
  • Audit and Compliance Committee (constituted by Independent Directors).
  • Risk Management and Compliance Committee (constituted by senior managers).
  • Executive Committee (constituted by the CEO and General Managers).
• During 2006/07 the Enterprise Risk Management Project again reviewed the Corporate Risk Plan to underpin compliance and disclosure related to Principle 7.
• A Fraud Risk Management Framework is in place.
  
  

• Encourage enhanced performance

• Board induction processes are in place and ongoing education and advice are available to all Directors at ENERGEX’s cost.
• The Board has reviewed its performance and examined opportunities for improved effectiveness.
• Preparations are being made for an externally facilitated Board Performance appraisal to be conducted in 2007.
• A comprehensive and formal management performance evaluation regime is in place. The regime includes:
  • Individual executive performance agreements.
  • ‘At risk’ performance-based remuneration on an annual basis (based on the achievement of well-defined corporate, commercial and personal goals).
    
    

• Remunerate fairly and responsibly

• Directors’ remuneration is established independently by the Governor-in-Council.
• The Remuneration Committee of the Board oversees employee remuneration and performance policy (in accordance with its Charter).
• Shareholder guidelines and policy in relation to employee remuneration are followed (and no individual is directly involved in deciding his or her own remuneration outcomes).
• Senior executive remuneration is disclosed in the Annual Report (in accordance with Accounting Rules and Government guidelines).
• ENERGEX does not have in place any equity-based remuneration.
  
  

• Recognise the legitimate interests of stakeholders

• ENERGEX has a clear view of its wider group of stakeholders (including shareholding Ministers, employees, customers, the community, unions and regulatory authorities).
• The ENERGEX Code of Conduct identifies comprehensive social and business integrity objectives.
• The Code of Conduct is adopted by the Board and driven by a ‘top down’ approach.
• Strong communication processes have enhanced community understanding of ENERGEX, as evidenced by strong community regard measures.