Committees of the Board
The Board has established an Audit and Risk Committee, a Remuneration Committee and a Nomination Committee as standing committees to assist with the discharge of its responsibilities.
All directors have a standing invitation to attend committee meetings where there is no conflict of interest. These committees review matters on behalf of the Board and (subject to the terms of the relevant committee’s charter):
- refer matters to the Board for decision, with a recommendation from the committee (where the committee acts in an advisory capacity); or
- determine matters (where the committee acts with delegated authority), which it then reports to the Board.
Details of the current membership and composition of each committee are set out in the 2020 Corporate Governance Statement.
The role of the Company Secretary
Aleks Spaseska was appointed as the Company Secretary of Wesfarmers on 1 July 2019 and resigned from this role on 3 March 2020 to take up another senior leadership appointment within the Group as Chief Financial Officer of Kmart Group. Ms Spaseska was succeeded by Vicki Robinson from 4 March 2020. Ms Robinson was formerly Wesfarmers General Manager, Legal (Corporate) where she led the team responsible for providing legal advice on the Group’s merger and acquisition activity and general corporate, commercial and operational matters. Ms Robinson is a member of the Wesfarmers Leadership Team and her qualifications and experience are set out in the directors’ report on page 89 of the company’s 2020 annual report. The Company Secretary is appointed by the Board and is accountable to the Board, through the Chairman, on all matters to do with the proper functioning of the Board. The Company Secretary works closely with the Chairman to manage the flow of information between the Board, its committees and senior executives across the Group. Further details on the role of the Company Secretary are set out in Wesfarmers’ Board Charter which is available on the company’s website.
Appointment of new non-executive directors
As part of the Nomination Committee’s oversight of Board succession planning, it is also responsible for identifying suitable candidates to fill Board vacancies as and when they arise, or to identify candidates to complement the existing Board, and to make recommendations to the Board on their appointment. Where appropriate, external consultants are engaged to assist in searching for candidates.
Where a candidate is recommended by the Nomination Committee, the Board will assess that candidate against a range of criteria including background, experience, professional qualifications, personal qualities, the potential for the candidate’s skills to augment the existing Board, taking into consideration the skills matrix set out on page 5 of this corporate governance statement and the candidate’s availability to commit to the Board’s activities. Wesfarmers also undertakes appropriate checks before a candidate is recommended to the Board. If these criteria are met and the Board appoints the candidate as a director, the director (in their personal capacity) will enter into a written contract with the company, setting out the terms of his or her appointment consistent with the ASX Principles, and that director must seek to have their appointment approved by shareholders at the next annual general meeting.
Candidates for appointment, election or re-election as a director are requested to provide details of their other commitments (and an indication of time involved in relation to those commitments), and to confirm their other commitments will not affect their ability to perform and discharge their responsibilities as a director of Wesfarmers.
The Board aims, through the notices of meeting for annual general meetings, to provide shareholders with all material information known to the Board and relevant to a decision on whether or not to elect or re-elect a director.
The Board Charter requires a director to hold, directly or indirectly, a minimum of 1,000 ordinary shares in Wesfarmers within two months of their appointment and at all times during the director’s period of office, and to increase that shareholding to an amount equivalent in approximate value to the gross annual base fee paid to each non-executive director within five years of appointment.
Induction of new non-executive directors and ongoing director development
As part of a comprehensive induction program covering Wesfarmers’ financial, strategic, operational and risk management position, a new director meets with the Chairman, the Audit and Risk Committee Chairman, the Group Managing Director, divisional managing directors and other key executives, to gain an insight into the values and culture of Wesfarmers, the Group’s structure, business operations, history, key risks and regulatory and legal framework. The program also includes site visits to a number of Wesfarmers’ key operations. The induction program is tailored to the director’s existing skills, knowledge and experience.
All directors are expected to maintain the skills required to discharge their obligations to the company. The Board, through the Nomination Committee, periodically reviews the professional development needs of the directors.
On an ongoing basis, directors are provided with papers, presentations and briefings on matters which may affect the business or operations of Wesfarmers to assist the directors in fulfilling their role and discharging their duties. Directors are also encouraged to undertake continuing education and training relevant to the discharge of their obligations as directors of the company, typically arranged by the Nomination Committee. Subject to consultation with the Company Secretary, the reasonable cost of continuing education and training is met by Wesfarmers.
To assist the directors in maintaining an appropriate level of knowledge of the operations of the company, directors undertake site visits each year to some of Wesfarmers’ businesses.
Evaluation of the Board, committees and directors
The Nomination Committee is responsible for ensuring that there is a robust and effective process for evaluating the performance of the Board, its committees and individual non-executive directors. In relation to the re-appointment of a non-executive director, the Nomination Committee reviews the performance of the relevant non-executive director during their term of office and makes recommendations to the Board.
The form of the Board, committee and individual non-executive director performance reviews is considered and determined each year. The outcomes of each Board and committee performance review are discussed by the Board and each respective committee. The outcomes of the performance review for each non-executive director are discussed between the non-executive director and the Chairman (and in the case of the performance review of the Chairman, between the Chairman and a nominated senior director).
From time to time, the evaluation process may be facilitated by an external consultant. An externally facilitated performance review process was undertaken in respect of the 2018 financial year.
The 2020 Board performance review process was undertaken with the assistance of an external service provider, with a detailed questionnaire completed by all directors and also by members of senior management. The results and recommended areas for further consideration and discussion were reviewed and discussed by the Board.
A similar process in respect of each committee will be carried out later in the year.
A performance review process was also undertaken during 2020 in respect of each non-executive director, with each director completing a review of the performance of each.