Woodside Corporation Governance

Woodside is amont the biggest gas and oil corporations that are situated in Australia. This corporation works with inspection production, supply and development of energy. Woodside’s statement of purpose is to provide major returns to their shareholders via their vision of turning into a worldwide leading service provider of gas and oil. The corporation must to go along with the pricipals of the corporate governance and recommendations supplied by the ASX Corporate Governance Council. This reserach paper provides the overview a high level of compliance with these recommendation, regulations, and applicable laws. Monitoring on Woodside Corporate Governance and the recommendations ought companies to support a corporate governance statement in their annual report disclosing the level of compliance with these recommendation and applicable laws and regulations.

Observation on Woodside Corporate Governance

The corporate governance recommendations require companies to provide a corporate governance statement in their annual report disclosing the level of compliance with the corporate governance recommendations. The company should also disclose areas they have not complied with and reasons for noncompliance. Woodside Company has included this statement in their annual report, the company has complied with the requirement of recommendation.

Principle 1 of the recommendations require companies to disclose the roles and responsibly of management and the board. They should also set clear criteria for evaluating the performance of the executive. Woodside has clearly elaborated the board of directors’ roles and responsibilities in its detailed corporate governance statement 2016. Board performance evaluation criteria is also included. The nomination committee is responsible for establishing the criteria for evaluating board performance. Evaluation for Woodside board is conducted annually.

On the structure of the board, companies are required to have a board of effective composition that will enable it discharge its duties. The board should mainly comprise independent directors, the chairman should be independent, and the roles of the chair and the chief executive should not be executed by the same person. Woodside’s board comprise ten directors, all independent and the chief executive. It comprises an independent chairman, the chief executive and managing director, and nine other independent directors.

Companies are required to develop a communications policy that will guide communication to external stakeholders like shareholders. It was noted that Woodside Continues Disclosure and Market Communication Policy was developed in 2015. This is available in the company’s website.

Principle 7 of the Corporate Governance and recommendation require companies to establish a sound system of oversight of internal control and risk. The management is required to design and implement an internal control and risk management criteria to ensure major business risks are adequately managed. Woodside has developed a risk management policy which is disclosed in the company’s website. This is in line with the recommendations of the corporate governance guidelines.

Principle 8 require companies to establish a remuneration committee that should comprise the committee chair and at least three members. The committee function will include to ensure that remuneration composition is reasonable and sufficient and that its relationship with performance can be established. Woodside has a Human Resources and Compensation Committee in place that discharges duties of remuneration committee. The functions of the committee are as stipulated in the Human Resources and Compensation Committee charter.

Principal 3 require companies to establish and disclose a code of conduct and a summary of the code as to practices that may be necessary to give confidence in regard to integrity of the company. It should also disclose the company legal obligation, responsibility of individuals in investigating and reporting unethical practices. Woodside Company established a code of conduct in December 2016, the code set out operational rules and policy that govern the company operations, relationship between employees and external stakeholders, and the company obligations.

Principle 3 also requires the company to establish a policy on gender diversity, companies should set measurable objectives on how to achieve gender diversity and annually assess the progress in achieving these objectives. Companies are required to disclose the measurable objectives in the annual report, this include the number of women in different levels in the company. In financial year 2016, women held the following positions in the company: 30 percent in the board, 15.9 percent senior management, 19.6 percent executive position. 2017 measurable objectives were also included in the annual report.

Conclusion

Corporate Governance principles and recommendations provide eight principles that companies need to comply with, largely concerning disclosure requirements. Woodside Company has largely comply with these recommendations and guidelines as discussed in these paper. The eight principles which have been discussed herein include: management and oversight, the structure of the board, promoting ethical and responsible decision making, safeguarding integrity in financial reporting, respecting the rights of shareholders, timely and balanced disclosure, recognizing and managing risk, and fair remuneration.

References

Corporate Governance Principles and Recommendations with 2010 Amendments. Retrieved May 7, 2017, from http://www.asx.com.au/documents/asx-compliance/cg_principles_recommendations_with_2010_amendments.pdf

Code of Conduct. Retrieved May 7, 2017, from http://www.woodside.com.au/supplying_to_woodside/Documents/Code%20of%20Conduct%20(December%202016).pdf

CONSTITUTION OF WOODSIDE PETROLEUM LTD. Retrieved May 7, 2017, from http://www.woodside.com.au/Working-Sustainably/governance-and-compliance/Documents/WPL%20Constitution%20April%202014.pdf

Corporate Governance and Corporate Performance. Corporate Governance and Complexity Theory. http://doi.org/10.4337/9781849808002.00009

Corporate Governance and the Audit Committee. The Audit Committee: Performing Corporate Governance, 1–8. http://doi.org/10.1007/0-306-47655-x_1

CORPORATE GOVERNANCE STATEMENT 2016. Retrieved May 7, 2017, from http://www.woodside.com.au/Investors-Media/announcements/Documents/01.03.2017%20Corporate%20Governance%20Statement%202016.pdf

Dignam, A., & Lowry, J. (2016). 15. Corporate governance 1: corporate governance and corporate theory. Law Trove. http://doi.org/10.1093/he/9780198753285.003.1616

Governance and Compliance Board and Committees. Retrieved May 7, 2017, from http://www.woodside.com.au/Working-Sustainably/governance-and-compliance/Pages/Board-Committees.aspx#.WQ9Ux9wlHIU

Kim, K. A. (2010). Corporate Governance. London: Pearson.

Lessambo, F. I. (2014). The international corporate governance system: audit roles and board oversight. Basingstoke: Palgrave Macmillan.