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robust governance

Governance

Robust governance

We maintain robust corporate governance policies in all our businesses.

Corporate governance is the system of rules, practices and processes by which a company is directed and controlled. We are very proud of our approach to corporate governance and believe it is vital to ongoing value creation for our shareholders and other stakeholders.

The corporate governance framework has been established by the Wesfarmers Board and is underpinned by the corporate governance statement which is available on the corporate governance section of the company’s website. This section also contains access to all relevant corporate governance information, including director profiles, Board and committee charters and Group policies.

Role of Board and management

The role of the Board is to approve the strategic direction of the Group, guide and monitor the management of Wesfarmers and its businesses in achieving its strategic plans and oversee good governance practice. The Board aims to protect and enhance the interests of its shareholders, while taking into account the interests of other stakeholders, including employees, customers, suppliers and the wider community.

In performing its role, the Board is committed to a high standard of corporate governance practice and

fostering a culture of compliance which values ethical behaviour, personal and corporate integrity, accountability and respect for others.

The Wesfarmers Managing Director has responsibility for the day-to-day management of Wesfarmers and its businesses and is supported in this function by the Wesfarmers Leadership Team.

The Board maintains ultimate responsibility for strategy and control of Wesfarmers and its businesses.

Structure and composition of the Board

Wesfarmers is committed to ensuring that the composition of the Board continues to include directors who bring an appropriate mix of skills, experience, expertise and diversity to board decision-making.

The Board currently comprises 11 directors, including nine non-executive directors. Details of the directors, including their skills, experience and year of appointment, are set out in the 2015 annual report.

Committees of the Board

The Board has established an Audit and Risk Committee, a Nomination Committee, a Remuneration Committee and a Gresham Mandate Review Committee, as standing committees to assist with the discharge of its responsibilities.

Details of the current membership and composition of each committee are set out in the 2015 Corporate Governance Statement.

Appointment of new 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 make recommendations to the Board on their appointment.

Evaluation of the Board and its committees

The Nomination Committee is responsible for scheduling formal performance reviews of the Board, its committees and of each non-executive director.

Director independence

Directors are expected to bring views and judgment to Board deliberations that are independent of management and free of any business or other relationship or circumstance that could materially interfere with the exercise of objective, unfettered or independent judgment, having regard to the best interests of the company as a whole. The Board has reviewed the position and relationships of all directors in office as at the date of the Annual Report and considers that eight of the nine non-executive directors are independent.

To find out more about director independence, please see the 2015 Corporate Governance Statement.

Remuneration and evaluation of senior executives

The Wesfarmers Limited Board is committed to an executive remuneration framework that is focused on driving a performance culture and linking executive pay to the achievement of the Group's strategy and business objectives and, ultimately, generating satisfactory returns for shareholders.

Full details of the remuneration paid to non-executive and executive directors, and senior executives, are set out in the remuneration report in the 2015 annual report.

Governance policies

The ASX Corporate Governance Council sets out corporate governance principles and recommendations (ASX  Principles) to achieve good governance outcomes and meet the reasonable expectations of most investors in most situations.

The Board believes that the governance policies and practices adopted by Wesfarmers this year follow the recommendations contained in the third edition of the ASX Principles.

For further information on Wesfarmers’ compliance with the ASX Principles and Wesfarmers corporate governance approaches, see the 2015 Corporate Governance Statement which is available on the Corporate Governance section of the company’s website.

Investor engagement

Wesfarmers recognises the importance of providing its shareholders and the broader investment community with facilities to access up-to-date high quality information, participate in shareholder decisions of the company and provide avenues for two-way communication between the company, the Board and shareholders.

Wesfarmers has developed a program on investor engagement for engaging with shareholders, debt investors, the media and the broader investment community. In addition, the company’s shareholders have the ability to elect to receive communications and other shareholder information electronically.

Integrity in reporting

The Audit and Risk Committee monitors internal control policies and procedures designed to safeguard Group assets and to maintain the integrity of financial reporting.

The Audit and Risk Committee also oversees the appointment of external auditors and assurers to ensure the accuracy of our external reporting.

The effectiveness, performance and independence of the external auditor is reviewed annually by the Audit and Risk Committee.

If it becomes necessary to replace the external auditor for performance or independence reasons, the Audit and Risk Committee will formalise a procedure and policy for the selection and appointment of a new auditor.

GRI Reference: G4-56

Risk management

The Risk Management Framework of Wesfarmers is approved by the Board. This framework details the overarching risk management controls that are embedded in the Group’s risk management processes, procedures and reporting systems and the division of the key risk management functions between the Board, Wesfarmers Managing Director and Finance Director, Audit and Risk Committee, divisional management and Group Assurance and Risk.

Click here to see the full 2015 Corporate Governance Statement on the company’s website which covers these matters in more detail.

Anti-bribery policy

Wesfarmers is committed to complying with the laws and regulations of the countries in which its businesses operate and acting in an ethical manner.

Bribery and related improper conduct are serious criminal offences for both the company and any individuals involved. They are also inconsistent with Wesfarmers’ values.

Our anti-bribery policy stipulates that political donations must not be made at business unit or divisional level. Any political donations must be authorised by the Wesfarmers Board and disclosed as required by law, and recorded in the Wesfarmers Group accounts. Any donations above a level determined in federal legislation must be disclosed annually to the Australian Electoral Commission and will be published on its website.  Wesfarmers has not made any political contributions this year.

GRI Reference: G4-DMA (Compliance), G4-SO6, G4-DMA (Public policy)