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.