Overview

Orica’s directors and management are committed to conducting the company’s business ethically and in accordance with high standards of corporate governance.

We believe that good corporate governance practices protect and enhance long term shareholder value.

Our governance policies and procedures comply in all substantial respects with the Australian Stock Exchange (ASX) Corporate Governance Council Principles of Good Corporate Governance and Best Practice Recommendations, released on 31 March 2003 and revised in August 2007. We will continue to review and, where necessary, to improve our governance practices to meet the expectations of our stakeholders and evolving standards.

Our Corporate Governance Statement in Orica’s Annual Report (page 14) describes in detail our approach to corporate governance.

The Board and Management

The primary role of the Orica Limited Board is the protection and enhancement of long term shareholder value. The Board is accountable to shareholders for the performance of the company. It directs and monitors the business and affairs of Orica on behalf of shareholders and is responsible for the company’s overall corporate governance. The Board, Chairman and Managing Director each have terms of reference that define their responsibilities.

The composition of the Board seeks to provide an appropriate range of experience, skills, knowledge and perspective to enable it to carry out its obligations and responsibilities. In reviewing the Board’s composition and in assessing nominations for appointment as non-executive directors, the Board uses external professional advice as well as its own resources to identify candidates for appointment as directors.

The balance of skills and experience of the Board is critically and regularly reviewed by the Corporate Governance and Nominations Committee to ensure that the appointment of directors is designed to produce an effective Board. 

Responsibility for managing, directing and promoting the profitable operation and development of the company, consistent with the primary objective of enhancing long term shareholder value, is delegated to the Managing Director who is accountable to the Board.

The matters reserved to the Board for approval and the authority delegated to management are clearly defined in the Orica policy on exercise and delegation of authorities.

The performance of the Board, its committees, individual directors and key executives is regularly evaluated. Details of the performance evaluation process can be found here.

Safety, Health and Environment

Orica considers the successful management of safety, health and environment matters as a vital issue for our employees, customers, communities and business success.  The full Board receives regular reports and presentations in relation to safety, health and environment issues and performance in the group.  In addition, a Safety, Health and Environment Committee has be established to assist the Board in the effective discharge of its environmental responsibilities.

A copy of the Safety, Health and Environment Committee terms of reference can be viewed by clicking here. 

Code of Conduct

Orica acknowledges the need for directors, executives and employees to observe the highest ethical standards of corporate behaviour. We have adopted a Code of Conduct to provide guidance on what is acceptable behaviour. Specifically, we require that all directors, managers and employees maintain the highest standards of integrity and honesty.

Orica has established an Speak Up Line to receive reports concerning instances of non-compliance with Orica’s Code of Conduct and standards and policies.

Shareholdings of Directors and Employees

The Board has approved guidelines for dealing in securities. Directors and employees must not, directly or indirectly, buy or sell the shares or other securities of any company, including Orica, when in possession of unpublished price sensitive information that could materially affect the value of those securities.

Risk Identification and Management

The Board has in place a risk management policy and integrated risk management programs aimed at ensuring the company conducts its operations in a manner that allows risks to be identified, assessed and appropriately managed. Businesses have the responsibility and accountability for implementing and managing the standards processes required by the programs.

A separate role of chief risk and sustainability officer has been created, reporting to the Executive Director of Finance, to oversee the company’s internal controls and risk management.

Integrity of Financial Reporting

The Board Audit and Risk Committee comprises three independent non-executive directors with relevant financial, commercial and risk management experience. The committee is charged with assessing the adequacy of the company’s financial, operating and environmental risk management controls, compliance with legal requirements and ethical guidelines affecting the company. The committee meets at least six times per year.

The committee assesses and reviews external and internal audits and any material issues arising from these audits. Information on the procedures Orica has in place for the selection and appointment of the external auditor and for the rotation of external audit engagement partners can be found here.

To safeguard the independence of its auditors, Orica has policies in place to regulate the type and amount of non-audit work performed by the company's internal and external auditors.

Continuous Disclosure and Keeping Shareholders Informed

Orica seeks to provide relevant and timely information to its shareholders and is committed to fulfilling its obligations to the broader market for continuous disclosure. We aim to ensure timely provision of equal access to material information about the company.

The Board has approved a continuous disclosure policy to ensure that the procedures for identifying and disclosing material and price sensitive information in accordance with the Corporations Act 2001 and ASX Listing Rules are clearly articulated.

Executive Remuneration

The Human Resources & Compensation Committee ("the Committee") is a committee of the Orica Limited Board created to advise and assist the Board in the effective discharge of its responsibilities for oversight of management process and performance in the provision of human resources necessary to effectively execute the Company's strategy over the long term. The Human Resources and Compensation Committee is comprised of three non-executive directors and the Committee's terms of reference can be viewed by clicking here.  

The Board believes that executive remuneration should be fair and reasonable, structured effectively to motivate and retain valued executives and designed to produce value for shareholders.

Remuneration arrangements and termination payments for the Managing Director, executive directors and executives reporting to the Managing Director, including short term incentive payments, performance targets and bonus payments, remain matters for all non-executive directors. Review of the performance of the Managing Director will be undertaken by all non-executive directors.

The Annual Report details the company's remuneration policies.

Constitution

A complete copy of the Constitution of Orica Limited can be accessed here.