Corporate Governance Statement

Recommendation 1.1: Corporations should establish the functions reserved to the Board and those delegated to the Executive Team.

Role of the Australia Post Board

The Board is responsible for the governance of Australia Post. The role of the Board is to decide the objectives, strategies and policies to be followed by Australia Post and ensure that Australia Post performs its functions in a manner that is proper, efficient and, as far as practicable, consistent with sound commercial practice. The Board derives its authority from the APC Act.

In discharging those broadly defined roles, the Board’s primary tasks include, amongst others:

• reviewing and approving Australia Post’s corporate plan
• selecting, appointing (subject to Government consultation in accordance with the Australian Government’s Cabinet Handbook issued by the Department of the Prime Minister and Cabinet) and monitoring of the performance of the Group Chief Executive Officer and Managing Director and, if appropriate, terminating the appointment of the Group Chief Executive Officer and Managing Director
• approving and monitoring key corporate policies, including policies in relation to work health and safety, key financial matters and risk management
• monitoring financial outcomes and the integrity of reporting and, in particular, approving annual budgets and longer-term strategic and business plans
• approving decisions affecting Australia Post’s capital, including approval of major new business initiatives and declaring dividends
• meeting its accountability obligations to Government by submitting corporate plans, evaluating and recommending dividends, reporting on business and operational performance, overseeing preparation of annual reports, notifying Shareholder Ministers of significant business proposals, overseeing compliance with applicable Government policies and ensuring proper accounting and risk management and oversight.

Timetables for Board and Committee meetings are generally scheduled annually in advance, with additional and/or rescheduled meetings also conducted where required.

The Board had three Committees in financial year 2019/20:

• Nomination and Remuneration Committee
• Audit and Risk Committee
• People and Sustainability Committee.

In the early part of financial year 2020/21, the Board established a Safety Committee.

Delegation

Under Section 94 of the APC Act, the Board may delegate virtually all or any of its powers to a Director or employee of the corporation.

Sections 18 and 19 of the APC Act specify a number of postal, postal-related and other powers of Australia Post. These powers are exercisable by the Group Chief Executive Officer and Managing Director and may be delegated by that person to other employees of Australia Post under section 93 of the APC Act.

The Board has delegated to the Group Chief Executive Officer and Managing Director responsibility for implementing Australia Post’s strategic priorities and for managing Australia Post’s day-to-day operations. Specific limits on the authority delegated to the Group Chief Executive Officer and Managing Director are set out in Delegated Authorities approved by the Board.

The Executive Team comprises the Group Chief Executive Officer and Managing Director and other senior managers (Executives) who are accountable to the Group Chief Executive Officer and Managing Director. Specific limits on the authority delegated to the Executive Team are set out in the Delegated Authorities approved by the Group Chief Executive Officer and Managing Director.

Recommendation 1.2: Corporations should carry out appropriate checks of board candidates and provide information to shareholders that is material to their candidacy.

The Group Chief Executive Officer and Managing Director is appointed by the Board, subject to Government consultation in accordance with the Australian Government’s Cabinet Handbook issued by the Department of the Prime Minister and Cabinet.

Non-Executive Directors are appointed by the Governor-General on the nomination of Shareholder Ministers for a period of up to five years. Reappointment is permissible. In practice, terms of appointment are generally three years.

To nominate a person for appointment as a Director, Shareholder Ministers must have regard to the need to ensure that the Directors collectively possess an appropriate balance of skills and experiences aligned to the Corporation’s strategic priorities.

Recommendation 1.3: Corporations should have a written agreement with each director and Executive setting out the terms of their appointment.

New Directors consent to act as a Director and receive a formal letter of appointment from Shareholder Ministers which sets out duties and responsibilities, rights and remuneration entitlements.

The Group Chief Executive Officer and Managing Director and each Executive are employed under individual contracts of employment which sets out the terms on which they are employed including details of their duties and responsibilities, rights and remuneration entitlements. Each contract of employment sets out the circumstances in which the contract may be terminated by either Australia Post or the Executive, including details of notice periods and amounts payable to the Executive as a consequence of termination by Australia Post.

Continuation of employment is subject to ongoing performance reviews by the Board and the Group Chief Executive Officer and Managing Director, as appropriate. Where the Board terminates the Group Chief Executive Officer and Managing Director, or endorses the termination of another Executives’ employment for reasons other than performance or misconduct, the individuals are entitled, in the case of the Group Chief Executive Officer and Managing Director, to:

• 6 months’ notice in writing in addition to a termination payment based on length of service and capped at 12 months fixed annual remuneration. Where notice is paid in lieu it is included in the capped 12 months fixed annual remuneration
  and, for other Executives, to:
• 12 weeks’ notice in writing in addition a termination payment based on length of service and capped at 12 months fixed annual remuneration. Where notice is paid in lieu it is included in the capped 12 months fixed annual remuneration.

Recommendation 1.4: The corporate secretary should be accountable directly to the Chair of the Board for matters relevant to the Board.

Australia Post’s Corporate Secretary fulfils other management responsibilities in addition to corporate secretarial duties. The formal reporting line of the Corporate Secretary is to the Group Chief Executive Officer and Managing Director. For any matter relevant to the corporate secretarial duties or conduct of the Board, the Corporate Secretary has an indirect reporting line, and is accountable, to the Chair of the Board.

Recommendation 1.5: Corporations should have a policy concerning diversity and disclose that policy, together with measurable objectives for achieving gender diversity and its progress towards achieving those objectives.

Australia Post discloses its diversity and inclusion strategies and objectives in its Annual Report, including in relation to Aboriginal and Torres Strait Islanders, gender diversity, disability and accessibility, culturally and linguistically diverse backgrounds, and Lesbian, Gay, Bisexual, Transgender and Intersex people.

Recommendation 1.6: Corporations should disclose the process for evaluating the performance of the Board, its committees and individual Directors.

Evaluation of Board and Individual Directors

The Board and its Committees each have a formal Charter that is reviewed annually. A copy of the Board and Committee Charters is available on Australia Post’s website.

The Board annually reviews its own performance, including its performance against the requirements of its Charter, and the performance of individual Directors. An independent review of the performance of the Board is conducted every two years, while an internal review is conducted in the intervening years.

The Board’s annual performance review relating to financial year 2019/20 was delayed as a consequence of the COVID-19 pandemic and will be conducted at a later date. The most recent review, which was conducted during the year prior, was undertaken internally through a confidential survey. The results of the survey were discussed at a subsequent Nomination and Remuneration Committee meeting.

Evaluation of Board Committees

Audit and Risk Committee

The Committee regularly informs the Board about Committee activities and makes recommendations to the Board on matters relevant to the Committee’s purpose. The Committee undertakes an annual self-assessment of its performance against the requirements of its Charter and provides that information to the Board. The Committee’s annual self-assessment relating to financial year 2019/20 was delayed as a consequence of the COVID-19 pandemic and will be conducted at a later date.

Non-Committee members such as executives and/or external parties who the Chair and members of the Committee think fit may be invited to attend all or part of a Committee meeting.

People and Sustainability Committee

The Committee regularly informs the Board about Committee activities and makes recommendations to the Board on matters relevant to the Committee’s purpose. The Committee undertakes an annual self-assessment of its performance against the requirements of its Charter and provides that information to the Board. The Committee’s annual self-assessment relating to financial year 2019/20 was delayed as a consequence of the COVID-19 pandemic and will be conducted at a later date.

Non-Committee members such as executives and/or external parties who the Chair and members of the Committee think fit may be invited to attend all or part of a Committee meeting.

Nomination and Remuneration Committee

The Committee regularly informs the Board about Committee activities and makes recommendations to the Board on matters relevant to the Committee’s purpose. The Committee undertakes an annual self-assessment of its performance against the requirements of its Charter and provides that information to the Board. The Committee’s annual self-assessment relating to financial year 2019/20 was delayed as a consequence of the COVID-19 pandemic and will be conducted at a later date.

Non-Committee members such as executives and/or external parties who the Chair and members of the Committee think fit may be invited to attend all or part of a Committee meeting.

Safety Committee

In the early part of financial year 2019/20, the Board established a Safety Committee.

The Committee will regularly inform the Board about Committee activities and make recommendations to the Board on matters relevant to the Committee’s purpose. The Committee will undertake an annual self-assessment of its performance against the requirements of its Charter and provide that information to the Board.

Non-Committee members such as executives and/or external parties who the Chair and members of the Committee think fit may be invited to attend all or part of a Committee meeting.

Recommendation 1.7: Corporations should disclose the process for evaluating the performance of the Executive Team.

Executive Team performance evaluations have been conducted for the year ended 30 June 2020.

Performance evaluations are based on an assessment of performance against key business objectives set annually. The measures include safety, financial, strategy, customer satisfaction, employee engagement and other individual metrics that support the key business objectives.  

The APC Act provides that the Board of Australia Post comprises up to nine Directors, including the Chair, the Deputy Chair, the Managing Director and not more than six other Directors.

The Directors of Australia Post at any time during the financial year are listed in Australia Post’s Annual Report, with a brief description of their appointment timing, knowledge and experience.

Director’s attendances at Board and Committee meetings are set out in Australia Post’s Annual Report.

Recommendation 2.1: The Board should establish an appropriately structured nomination committee.

The Board has established a Nomination and Remuneration Committee. The Committee currently comprises all Non-Executive Directors.

The Committee has a formal Charter that is required to be reviewed at least annually. A copy of the Charter is available on Australia Post’s website.

The Committee is primarily responsible for assisting the Board to fulfil its governance responsibilities in relation to Board performance and composition, succession planning and remuneration for the Group Chief Executive Officer and Managing Director, incentive plans, and remuneration policy and reporting, and within the scope of its responsibility endorse certain matters for Board approval.

Recommendation 2.2: The Board should establish and disclose a board skills matrix on the mix of skills and diversity for Board membership.

Non-Executive Directors are appointed by the Governor-General on the nomination of Shareholder Ministers. Australia Post seeks to maintain a Board of Directors with a broad range of skills, experience and knowledge relevant to overseeing the business of a global eCommerce organisation.

The Board’s annual performance review relating to financial year 2019/20 was delayed as a consequence of the COVID-19 pandemic and will be conducted at a later date. During the prior year, the Board Performance Review identified that, with regard to the capability of the Board, new appointees should have skills from the areas of large complex business experience, logistics, on-the-ground international experience, retail and operational experience.

Diversity of the board, including through gender, age, ethnicity and geography, is also a consideration for new appointees.

Recommendation 2.3: The Corporation should disclose whether its Directors are independent.

Australia Post considers a Director to be independent if the Director is free of any interest, position, association or relationship that might influence, or reasonably be perceived to influence, his or her capacity to bring an independent judgement to bear on issues before the Board and to act in the best interests of the entity and its Shareholder.

In determining whether a Director is independent, the Board considers whether the Director:

• is, or has been, employed in an Executive capacity by Australia Post or any of its subsidiaries and there has not been a period of at least three years between ceasing such employment and serving on the Board
• is, or has within the last three years been, a partner, Director or senior employee of a provider of material professional services to the entity or any of its child entities
• is, or has been within the last three years, in a material business relationship (for example, as a supplier or customer) with Australia Post or any of its subsidiaries, or an officer of, or otherwise associated with, someone with such a relationship
• has a material contractual relationship with Australia Post or its subsidiaries other than as a Director
• has close family ties with any person who falls within any of the categories described above
• has been a Director of Australia Post for such a period that his or her independence may have been compromised.

The Board has determined that each Non-Executive Director is, and was throughout the entirety of the financial year, independent.

During the financial year there were no instances where an individual Director declared a potential conflict of interest in relation to business considered by the Board. However, during a Board training session on matters of both a general and also Australia Post-specific nature, one Director declared a potential conflict of interest and accordingly withdrew from the training session while topics that gave rise to a potential conflict of interest were discussed.

No Director has received or become entitled to receive a benefit because of a contract between any entity in the Australia Post Group and the Director, or a firm which the Director is a substantial member of, or an entity in which the Director has a substantial financial interest.

Directors have access to Australia Post records and information reasonably necessary to fulfil their responsibilities. Directors also have access to the Corporate Secretary on any matter relevant to their role as Director. In addition, the Board has access to other key senior managers to seek additional information concerning Australia Post’s business.

Provided they have prior agreement from the Chair, Directors have the right to seek independent professional advice at Australia Post’s expense to help them carry out their responsibilities.

It is usual for the Non-Executive Directors to confer, without management being present, at the start of each scheduled Board meeting.

Recommendation 2.4: The majority of the Board should be comprised of independent Directors.

At 30 June 2020, the Board comprised eight Non-Executive Directors and one Executive Director. The Executive Director was Australia Post’s Group Chief Executive Officer and Managing Director, Christine Holgate. The Board has determined that each Non-Executive Director is, and was throughout the entirety of the financial year, independent.

Recommendation 2.5: The Chair should be an independent Director.

The Chair is appointed by the Governor-General on the nomination of Shareholder Ministers.

The Chair presides over Australia Post’s Board meetings. The Chair is responsible for:

• leading the Board in reviewing and discussing Board matters
• managing the efficient organisation and conduct of the Board’s function
• briefing all Directors in relation to issues arising at Board meetings
• facilitating effective contribution by all Directors and monitoring Board performance
• ensuring the membership of the Board is skilled and appropriate for Australia Post’s needs and reporting this to Shareholder Ministers
• promoting constructive relations between Board members and between the Board and management
• reviewing corporate governance matters with the Corporate Secretary and reporting on those matters to the Board
• overseeing the implementation of policies and systems for Board performance review and renewal.

The Board is satisfied that Australia Post’s Chair, Lucio Di Bartolomeo, and Australia Post’s former Chair, John Stanhope, were throughout the entirety of their time in the role during financial year 2019/20, independent.

Recommendation 2.6: Establish a program for inducting new directors and provide appropriate professional development opportunities for directors.

The Chair is appointed by the Governor-General on the nomination of Shareholder Ministers.

Directors receive a formal letter of appointment from Shareholder Ministers. An induction pack is provided to Directors by Australia Post and contains sufficient information to allow the new Director to gain an understanding of:

• the powers granted to Shareholder Ministers
• the rights, duties and responsibilities of Directors
• the role of Board Committees
• the roles and responsibilities of the Executive Team
• Australia Post’s financial, strategic, and operational risk management position.

New Directors undertake an induction program which includes:

• access to information about Australia Post’s governance frameworks; Government Business Enterprise Guidelines; APC Act; PGPA Act; the most recent Corporate Plan; the most recent Annual Report; our organisational chart; insurance and indemnity details pertaining to Australia Post’s Directors and Officers, Insurance policy and key corporate policies
• a program of meetings with Australia Post’s Chair, Group Chief Executive Officer and Managing Director, members of the Executive Team, and the Corporate Secretary
• visits to Australia Post’s main operational sites.
  

Recommendation 3.1: Corporations should establish a Code of Conduct.

Australia Post has a Code of Conduct, referred to as ‘Our Ethics’, that applies to Australia Post and its Directors, employees, licensees, contractors and other third parties performing services for or on behalf of the Australia Post Group (all of which are referred to as ‘our workforce participants’ in Our Ethics).

Our Ethics sets out a number of overarching principles of ethical standards which are set out under the following headings:

• health, safety and the work environment
• compliance with laws and regulations
• work practices and performance
• conflicts of interest
• corporate responsibility
• using corporate property
• corporate records
• privacy, confidentiality and public comment.

Our Ethics provides a mechanism to enable Australia Post’s workforce participants to report actual or suspected breaches, including an independently operated Whistleblower Hotline service to allow for anonymous reporting. The Whisteblower Hotline also services the requirements of the Public Interest Disclosure Act 2013.

Our Ethics (PDF 1.23MB) is available on Australia Post’s website.

Recommendation 4.1: The Board should establish an appropriately structured audit committee.

The Board has established an Audit and Risk Committee. Its primary function is to assist the Board through its oversight and review of financial reporting, performance reporting, system of risk oversight and management, system of internal control and auditor independence and performance.

Structure of the Audit and Risk Committee

Under its Charter, the Audit and Risk Committee must have a minimum of three members, all of whom must be Non-Executive Directors and who have appropriate qualifications, knowledge, skills or experience to assist the Committee to perform its functions. The Chair of the Board, the Chief Executive Officer and the Chief Financial Officer are not members of the Committee.

The Committee’s members bring qualifications and experience in finance, audit and risk capacities, experience in leading and participating in both Government and commercial organisations, and diverse skills and knowledge adapted from a range of industries and vocations.

At 30 June 2020, the Committee comprised four members.

Non-Committee members such as executives and/or external parties who the Chair and members of the Committee think fit may be invited to attend all or part of a Committee meeting.

The Committee meets privately with the external auditor on general matters concerning external audit and other related matters, including the half-year and full-year financial reports. The Committee also meets privately with the Group Chief Financial Officer, Chief Risk Officer and General Manager Internal Audit.

The Corporate Secretary is the secretary to the Committee. Copies of the minutes of a meeting of the Committee are distributed for approval at the next Committee meeting.

The Chair of the Committee reports to the Board on the Committee’s conclusions and recommendations.

Charter of the Audit and Risk Committee

The Committee has a formal Charter that is required to be reviewed at least annually. A copy of the Charter is available on Australia Post’s website.

The Charter sets out the roles and responsibilities, composition, structure and membership requirements of the Committee.

The Committee’s primary responsibilities include oversight and review of:

• financial reporting
• performance reporting
• system of risk oversight and management
• system of internal control
• compliance management
• auditor independence and performance.

Monitoring performance of the external auditor

Under section 43 of the PGPA Act, the Auditor-General is responsible for auditing the financial reports of Australia Post and its subsidiaries. The Auditor-General is also responsible for auditing compliance with the performance standards prescribed for Australia Post under section 28C of the APC Act. Ernst and Young (EY) has been retained by the Australian National Audit Office to assist in both of these assignments.

The Board has in place a comprehensive set of audit independence principles in relation to the external auditors. Among other things, these principles exclude the engagement of the external auditors for the provision of certain non-statutory audit-related services, such as internal auditing, taxation planning, treasury policy and operations, and business and strategic planning. In addition, the senior audit partner on Australia Post’s account must be rotated at least every five years. However, under circumstances where the involvement of key personnel in the audit of Australia Post does not constitute a familiarity risk, the ANAO may extend the rotation of the senior audit partner to a maximum of seven years.

The Audit and Risk Committee, together with ANAO, monitor the ongoing non-statutory audit related services provided by EY.

Recommendation 4.2: CEO and CFO certification of financial statements.

Prior to the adoption of the financial reports, the Board receives and considers a written statement from the Group Chief Executive Officer and Managing Director and Group Chief Financial Officer to the effect that:

• the financial records of the Corporation and the consolidated group have been properly maintained
• the statements comply with accounting standards and any other requirements prescribed by the PGPA Act and the Public Governance, Performance and Accountability (Financial Reporting) Rule 2015, and present fairly the entity’s financial position, financial performance and cash flows
• integrity to the financial statements is founded on a sound system of risk management and internal control which is operating effectively
• there have been no material subsequent events occurring between the date of the financial statements and the date of the statement which require adjustment to/disclosure other than the events disclosed in the notes to the financial statements.

Recommendation 4.3: External auditor availability at AGM.

There is no requirement for Australia Post to hold an AGM.

Under section 43 of the PGPA Act, the Auditor-General is responsible for auditing the financial reports of Australia Post and its subsidiaries. The Auditor-General makes itself available at the request of the Shareholder.

Recommendation 5.1: Corporations should establish disclosure policies and ensure compliance with those policies.

Australia Post’s disclosure obligations are prescribed from the provisions of the APC Act and the PGPA Act.

Australia Post is accountable to its Shareholder Ministers for its performance. Disclosure of performance, expenditure and any significant issues is made to Shareholder Ministers in a timely and balanced manner. This is executed through the provisions of a corporate plan, quarterly progress reports, the annual report and regular updates. This is in addition to responding to requests from Shareholder Departments on a regular basis.

Australia Post has established a formal Shareholder Communication Program that records the arrangements in place that facilitate effective communication between Australia Post and its Shareholder Ministers and Shareholder Departments. The program is published on Australia Post’s website.

Recommendation 6.1: The Corporation should provide information about itself and its governance to its shareholder on its website.

Australia Post’s website provides detailed information about its business and operations. Details of Australia Post’s Board members and Executive Team members are included on the website.

Australia Post’s website makes helpful information available to the Shareholder and the public. It allows the Shareholder and public to view Australia Post publications, media releases, a copy of the most recent Annual Report and Annual Reports for previous financial years, and Australia Post’s Statement of Corporate Intent and Statements of Corporate Intent for prior years.

Australia Post also publishes, in its Annual Report, the details of its achievements against a range of diversity programs focused on building our female talent pipeline, improving employment opportunities for Aboriginal and Torres Strait Islander Australians, celebrating our cultural diversity, and building awareness about people with disability.

Recommendation 6.2: The Corporation should design and implement a shareholder relations program to facilitate two-way communication with its shareholder.

Australia Post has established a formal Shareholder Communication Program that records the arrangements in place that facilitate effective communication between Australia Post and its Shareholder Ministers and Shareholder Departments. The program is published on Australia Post’s website.

Recommendation 6.3: The Corporation should disclose the policies and processes it has in place to facilitate and encourage participation at meetings of shareholders.

Australia Post has established a formal Shareholder Communication Program that records the arrangements in place that facilitate meetings with the Shareholder, including via annual strategic meetings, quarterly meetings with Shareholder Departments, and meetings upon request. The program is published on Australia Post’s website.

Recommendation 6.4: The Corporation should provide the option to send and receive communications from the Corporation in electronic form.

Australia Post communicates with its Shareholder via a number of different communications channels, which include digital and physical methods.

Recommendation 7.1: Corporations should establish an appropriately structured risk management committee for the oversight of material business risks.

The Board has established an Audit and Risk Committee. Its responsibilities include oversight of the effectiveness of Australia Post’s system of risk management and internal control.

The Committee receives regular presentations on Australia Post’s material business risks, and the controls in place to mitigate the consequences of those risks. Australia Post’s main risks are reviewed at each meeting of the Committee, and periodically by the Board. The Committee also receives regular presentations from management throughout the year on specific risk topics. The Committee has responsibility for approving the internal audit plan.

Details of the structure and Charter of the Audit and Risk Committee are set out in relation to Recommendation 4.1, above.

Recommendation 7.2: The Board or a Committee of the Board should review the company’s risk framework at least annually to satisfy itself that it continues to be sound.

Group Risk Management Framework

Australia Post has a Group Risk Management Framework (RMF) in place that describes the core strategies and processes that support our business in effectively managing risks, along with also providing clarity on the roles and responsibilities for those managing risk. The RMF supports application of the Group Risk Management Policy and has been developed utilising the principles detailed in the International Standards for Risk Management (ISO 31000) and Compliance Management Systems (ISO 19600).

Functional responsibility for the RMF and Group Risk Management Policy resides with the Chief Risk Officer (CRO) and, on a regular basis, the CRO formally reports to the Audit and Risk Committee on all matters affecting Australia Post’s main risk exposures, and application of the Group’s Risk Appetite Statement. On an annual basis, the CRO also provides an attestation to the Audit and Risk Committee regarding the adequacy of, and compliance with, the Group Risk Management Policy requirements and effective application of the RMF’s core components.

An external review of the Group Risk Management Policy is required to be performed every four years. The last external review was conducted in December 2017.

Recommendation 7.3: Corporations should disclose the structure and role of its internal audit function.

Australia Post’s internal audit function provides assurance to the Audit and Risk Committee on the effectiveness of Australia Post’s risk management framework and on the adequacy and effectiveness of key internal controls.

Internal Audit is an independent, objective assurance and consulting function designed to add value and improve the organisation’s operations including the internal control environment. It assists the organisation to accomplish its objectives by bringing a systematic, disciplined, third line of defence to the evaluation of internal processes and controls, and improve the effectiveness and efficiency of the risk, control and governance processes.

The Audit and Risk Committee participates in the appointment, dismissal or replacement of the General Manager Internal Audit. Selection, promotion, performance assessment and professional development of Internal Audit staff are the responsibilities of the General Manager Internal Audit.

The internal audit function is a co-sourced operating model comprising both trained audit employees and external consultants for specialist technical and operational areas. The Audit and Risk Committee oversees governance and processes to assure the on-going independence and objectivity of the internal audit function.

Recommendation 7.4: Corporations should disclose their economic, environmental and social sustainability risks and how those risks are managed.

Information about Australia Post’s key economic, environmental and social sustainability considerations are disclosed in Australia Post’s Annual Report.

Australia Post’s Corporate Responsibility Index, including GRI Content Index, can be found on Australia Post’s website.

Further information about Australia Post’s corporate responsibility strategies, including the Australia Post Group Corporate Responsibility Plan 2020-2022, can be found on Australia Post’s website.

Recommendation 8.1: The Board should establish an appropriately structured remuneration committee.

The Board has established a Nomination and Remuneration Committee. Its responsibilities include reviewing and making recommendations to the Board regarding remuneration levels for the Group Chief Executive Officer and Managing Director in accordance with the parameters set by the Remuneration Tribunal and considering the Group Chief Executive Officer and Managing Director’s recommendations around recruitment, performance, remuneration and succession arrangements for Executives and senior management.

Details of the structure and Charter of the Nomination and Remuneration Committee are set out above in relation to Recommendation 2.1.

In addition, the Board has also established a People and Sustainability Committee.

The Committee has a formal Charter that is required to be reviewed at least annually. A copy of the Charter is available on Australia Post’s website.

The Committee considers and makes recommendations to the Board about:

• culture and engagement
• diversity
• workplace and industrial relations
• recruitment, retention, learning and development
• talent and succession planning
• corporate responsibility
• community
• post office network
• environment
• stakeholder management and reputation
• modern slavery.
  

Recommendation 8.2: The Corporation should distinguish between non-executive Directors’ remuneration and that of executive Directors and Executives.

Remuneration for Australia Post’s Non-Executive Directors is determined by the Remuneration Tribunal and is disclosed in a detailed Remuneration Report set out in Australia Post’s Annual Report.

The Board is responsible for setting the remuneration arrangements for the Group Chief Executive Officer and Managing Director in accordance with the parameters set by the Remuneration Tribunal.

Remuneration arrangements for other Executives are reviewed and determined by the Nomination and Remuneration Committee based on recommendations by the Group Chief Executive Officer and Managing Director.

Advice is sought annually from independent specialised remuneration consultants on the:

• structure of remuneration packages applying in the external market; and

• changes that have occurred in comparable Australian corporations over the previous 12 months.

On the basis of this advice, the Group Chief Executive Officer and Managing Director ensures that payments to Executives are in-line with market practice, and that they are competitively placed to attract and retain the necessary talent for the work required by these roles.

Incentive payments payable to the Group Chief Executive Officer and Managing Director and other Executives for meeting or exceeding specific key annual business objectives are linked to the annual business planning process at a corporate and individual level. Measures and targeted achievement levels are monitored and reviewed annually to reflect changes in the business priorities for the forthcoming year. The measures generally include safety, financial, strategy and execution, customer satisfaction, employee engagement and other individual metrics that support the key business objectives.

Before an incentive payment is payable, a threshold must be reached, according to predefined measures. In the case of the Group Chief Executive Officer and Managing Director and some Executives, part of their incentive payment is deferred and expensed over a deferral period.

Remuneration details for the Group Chief Executive Officer and Managing Director and other Executives are set out in the Remuneration Report, which appears in the Annual Report.

Recommendation 8.3: The Corporation should establish a policy on whether participants in equity based remuneration schemes are able to enter into transactions which limit the economic risk of participating in those schemes.

There are no employees in equity based remuneration schemes.

Directors’ attendance at meetings – 2019-20

Australia Post Board

Audit & Risk Committee

People and Sustainability Committee

Nomination & Remuneration Committee

Notes:

1. Lucio Di Bartolomeo was appointed Chair of the Australia Post Board commencing 22 November 2019. 
2. John Stanhope AM’s term as Chair of the Australia Post Board concluded on 21 November 2019.
3. Andrea Staines OAM was appointed as Deputy Chair of the Australia Post Board commencing 27 June 2020. 
4. Holly Kramer’s term as Deputy Chair of the Australia Post Board concluded on 26 June 2020. 

Committee meeting attendances in the table reflect meetings where the Director was a Committee member.

Directors may also attend Committee meetings to observe, where invited by the Committee.

No Board meetings were held at Australia Post operating sites – one Board meeting was scheduled to be held at an Australia Post operating site but, due to the COVID-19 pandemic, was instead held via videoconference.

Two of the Board meetings held were brief teleconferences apprising the Board on management responses to the COVID-19 pandemic.

One of the Board meetings held was a dedicated strategy session.