Legal Framework
   

Australia Post's governance practices derive principally from the provision of the Australian Postal Corporation Act (APC) 1989 and the Commonwealth Authorities and Companies Act (CAC) 1997. They are also consistent with the requirements of the Governance Arrangements for Commonwealth Government Business Enterprises.

Role of the Board
 

The Board is established by (S20) of the APC Act. Its role (S23) is:

• to decide the objectives, strategies and policies to be followed by Australia Post, and

• to ensure that Australia Post performs its functions in a manner that is proper, efficient and, as far as practicable, consistent with sound commercial practice.

Powers of the Board
  

Specific powers granted to the Board under the APC Act include:

• determination of terms and conditions of services provided by Australia Post, including rates of postage (S32)
• appointment and determination of remuneration of Managing Director (S83 & S86):

• authorisation of the use of the seal (S96):

• ability to delegate its powers (S94).

Obligations of the Board
  

The APC and CAC Acts impose a range of specific obligations on the Board, namely:

APC Act

CAC Act

GBE Governance Arrangements

The Governance Arrangements for Commonwealth Government Business Enterprises issued in 1997 expand on the requirements of the APC and CAC Acts in a number of areas, namely through:

• establishment of a dual Shareholder Minister model ie: Portfolio Minister and Finance Minister (S1.2)

• provision for advance consultation on, and formal responses to, the Corporate Plan (S2.2 - S2.3)

• requirement that a Statement of Corporate Intent be prepared annually for tabling in Parliament (S2.5 - S2.7)

• dividend guidelines (S4.1 - S4.8)

• establishment of processes and practices to manage all risks associated with the GBE's operations, and the outline of risk management strategies in the Corporate Plan (S4.9 - S4.10)

• the objective of increasing shareholder value and setting a financial target that at least meets the weighted average cost of capital (S4.13 - 4.15)

• requirement to consult with the Remuneration Tribunal in determining remuneration packages for Chief Executive Officers (S5.1).

Board Structure

To assist in the discharge of its responsibilities, the Board has in place two key Committees:

Audit (pdf, 86kb)

• provides a forum for regular communication between the Board and the Corporation's external and internal auditors; and

• focuses on key issues such as financial controls and systems, risk identification and management, and the Corporation's annual financial statements;

Human Resources

• addresses major HR policy, structural and remuneration issues.

Discharging the Board's Responsibilities

In practice, the Board discharges its responsibilities in four main ways:

• setting strategic directions (eg, through the Corporate Plan, strategic business plans and approval of major new business initiatives)

• setting key corporate policies (eg, product pricing and development, network structures, financial matters, risk management, information technology, community service obligations, human resources, environment)

• supervising corporate performance (eg, by reviewing business performance (monthly), product performance (half yearly), Corporate Plan (annually) etc), and

• meeting its accountability to Government (eg, by submitting Corporate Plans, by evaluating and recommending dividend proposals, by reporting on business and operational performance (quarterly), by preparing an Annual Report, by notifying significant business proposals, by ensuring compliance with notified Government policies and by ensuring proper accounting and risk management).

Delegation of Board Powers
 

Under (S94) of the APC Act, the Board may delegate virtually all or any of its powers to a Director of the Corporation:

Australia Post Powers

The APC Act specifies (S18 & S19)  a wide number of postal, postal related and other powers of Australia Post including the power to enter into contracts, acquire or dispose of property, form or participate in the formation of companies etc.

These powers reside in the Managing Director and may be delegated by him to other employees of Australia Post (S93) :

Matters to be Referred to Board
 

Notwithstanding the fact that the APC Act makes a distinction between Board and Corporation powers, the Board has decided that a number of matters within the powers of the Corporation should be referred to it for agreement in the first instance, such as:

• all procurements/projects over $15m

• all strategic procurements/projects irrespective of cost

• all proposals by the Corporation to form, or participate in the formation of a company; to enter into a partnership; to enter into a joint venture or an arrangement for the sharing of profit; to acquire a major shareholding in a company; to acquire a substantial business; or to undertake significant new business activities.

Management Committees
  

Aside from individual delegations, much of the broad decision making within Australia Post resides with a series of cross-functional management committees.

The Executive Committee is the peak senior management body. It advises the Managing Director on operational matters and is responsible for the design of strategies, policies and proposals for consideration by the Board.

Supporting the Executive Committee are a number of other, specialist committees, such as:

Project and Capital Investment Expenditure
 

The Corporation has detailed Project and Capital Investment Program policy and procedures in place.  These apply to all operating expenditure of a project nature equal to or exceeding $250,000, as well as to all projects comprising capital expenditure and disposals, regardless of value.

To be approved, a project or capital investment must have budget funding approval and must be supported by a business case which must identify, assess and evaluate potential risks which then need to be mitigated and managed.

Projects can only be approved under strict delegated approval authority limits:

A post implementation review must be conducted for all major (i.e. $250,000+) projects.

Risk Management
  

The Board oversees a comprehensive risk management policy framework covering all significant business risks and strategic considerations. The underpinning processes, which seek to identify, analyse, assess and treat these risks, are closely aligned with the principles of the relevant national Standard (AS/NZS 4360:1999).

All business units are required to report annually to an internal management Risk Management Committee on their existing and emerging risks and on associated mitigation strategies. Outcomes are reported in turn to the Board Audit Committee.

Risk identification, measurement and mitigation strategies are key elements of the Corporate Plan, Strategic Business Plans and all business related proposals considered by the Boards.

There are also a number of particular programs in place to manage risk in specific areas such as fraud, the environment, trade practices, injury prevention and management, legislative compliance, fire safety and emergency procedures and business continuity planning. The potentially adverse financial impacts associated with catastrophic risk exposures are limited by the purchase of appropriate insurance cover.

The ongoing effectiveness of Australia Post's risk management framework is reviewed annually by the Board. To ensure the maintenance of best practice, independent external reviews of the Corporation's risk management processes are commissioned periodically.

• See Corporate Information
• Annual Reports