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Home > Board of Directors and Corporate Governance > Corporate Governance
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 Australia Post has in place a comprehensive system of corporate governance practices designed to provide appropriate levels of disclosure and accountability. These practices derive principally from the provisions of the Australian Postal Corporation (APC) Act 1989 and the Commonwealth Authorities and Companies (CAC) Act 1997. They are also consistent with the requirements of the Governance Arrangements for Commonwealth Government Business Enterprises (1997). SHAREHOLDER MINISTERS Senator the Hon. Richard Alston, Minister for Communications, Information Technology and the Arts, has portfolio responsibility for Australia Post. Shareholder responsibility for the enterprise is exercised jointly by Senator Alston and the Minister for Finance and Administration, Senator the Hon. Nick Minchin. THE BOARD The board of Australia Post comprises up to nine directors, eight of whom serve in a non-executive capacity. The managing director is the sole executive director. Non-executive directors are appointed by the Governor-General on the nomination of the portfolio minister. Appointments can be for up to five years and reappointment is permissible. Current government policy is for terms of appointment to be generally of three years' duration. Before nominating a person for appointment, the Minister is required to consider the balance of expertise on the board and also to consult with the chairman. Remuneration for non-executive directors is determined by the Commonwealth Remuneration Tribunal. The board appoints the managing director and also sets the terms and conditions of appointment. Remuneration aspects are subject to prior consultation with the Commonwealth Remuneration Tribunal. ROLE OF THE BOARD The board is accountable for Australia Post's overall performance and for ensuring that the corporation performs its functions in a manner consistent with sound commercial practice. Directors set the corporation's key objectives and strategies via a rolling three-year corporate plan, submitted annually to the shareholder ministers. Progress against the plan is reported quarterly. Ministers are also provided with ad hoc advice on developments of significance, as appropriate. BOARD COMMITTEES Separate Audit and Human Resources committees have been established to assist the board in the discharge of its responsibilities. The Audit Committee, which is made up entirely of non-executive directors, provides a forum for regular communication between the board and the corporation's external and internal auditors. Focusing in particular on the areas of financial reporting, risk management and internal controls, the Audit Committee reviews:
The Human Resources Committee addresses major policy, structural and remuneration issues,including:
INDEPENDENT PROFESSIONAL ADVICE Directors have the right, with the agreement of the chairman, to obtain at the corporation's expense relevant independent professional advice in connection with the discharge of their responsibilities. CONFLICT OF INTEREST Directors who may have a material personal interest in a matter to be considered by the board or a board committee are required to make the nature of that interest known and must not be present while the matter is being considered. Details of such disclosures are recorded in the minutes of the meeting. AUDIT Under s8 of the CAC Act, the Auditor-General inspects and audits the accounts and records of the corporation's financial transactions and assets, reporting to parliament, the Minister and the board. The Auditor-General also audits and reports on compliance with the performance standards prescribed for Australia Post under s28C of the APC Act. Ernst &Young has been retained by the Australian National Audit Office (ANAO) to assist the Auditor-General in undertaking both of these audit assignments. INTERNAL AUDIT Australia Post maintains an independent internal audit service to help the corporation meet its objectives by applying a systematic, disciplined approach to evaluating and improving the effectiveness of risk management, control and governance processes. After an external best practice review, the charter of the internal audit service was updated during the year to reflect more closely the contemporary view and expectations of internal audit, embracing wider concepts of corporate governance, risk and control. The internal audit service is authorised by the board to direct a comprehensive program of internal auditing within the corporation with full and unrestricted access to all functions, property, personnel records, accounts, files and other documentation. The internal audit work program is subject to annual endorsement by the Audit Committee, with the results, progress and performance of internal audit regularly reviewed by both the Audit Committee and Australia Post's external auditors. 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). The risk management framework was enhanced during the year by the establishment of an internal Risk Management Committee (RMC). All Business Units report annually to the RMC 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 included in business-related proposals considered by the board. There are also a number of particular programs in place to manage risk in specific areas such as fraud, the environment, 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 the corporation's risk management framework is reviewed annually by the board. Also, to ensure the maintenance of best practice, independent reviews of risk management across the corporation are commissioned periodically. TREASURY A comprehensive and prudent treasury policy has been established to manage liquidity, interest rate, foreign exchange and fuel price risk. The policy, which is reviewed by the board at least annually, provides for the use of hedging instruments to minimise the impact of volatility in foreign exchange, interest rate and oil price movements so as to ensure reasonable certainty against budget estimates and in the cost of imported capital equipment and other supplies. Established treasury procedures incorporate risk control principles of segregation of duties, dual control access and independent reconciliations. A Treasury Risk Management Committee determines appropriate hedging strategies within the policy parameters. Treasury activities are reported regularly to the board and are subject to ongoing review by auditors and independent risk advisers. INTERNAL CONTROL FRAMEWORK The corporation's internal control framework covers financial planning and reporting, capital expenditure appraisal procedures, authority delegation, due diligence examination and procurement contract tendering. Financial reporting and business system integrity are assured through the maintenance of detailed information technology and operating procedure manuals. CORPORATE SECURITY A specialised Corporate Security Group has responsibility for ensuring the integrity of the mail and the safety of Post's personnel and other assets. The Group maintains close liaison with the risk management and internal audit areas of the corporation. CODE OF ETHICS Australia Post seeks to conduct its business with integrity, honesty and fairness and in compliance with all relevant laws, regulations, codes and corporate standards. A board-approved code of ethics sets out clearly the ethical standards that are expected of both directors and employees in their dealings with customers, the corporation and each other. PRIVACY Since 1988 Australia Post has been subject to the Information Privacy Principles contained in the Privacy Act 1988 (Cwlth) in respect of its "non-commercial activities". With the introduction of the National Privacy Principles in December 2001, additional privacy law obligations now apply to the corporation's "commercial activities". To meet these new requirements, the corporation appointed a full-time Chief Privacy Officer to oversee the development and implementation of a multi-faceted National Privacy Compliance Program. The program has included the release of staff briefings, and on-line and paper-based Privacy Training Programs for some 17,000 staff members and licensees. The implementation process has been subject to continuous feedback and review from both internal stakeholders and customers.  Click here for Director's attendance at meetings
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