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Governance

• Our Approach
  • Structure and Responsibilities
  • Hierarchy of systems and documents
  • Key Management Processes
• Our Performance
  • Risk Management
  • Management Systems Review
  • Business Conduct
  • Audit and Self-Assessment

Structure and Responsibilities

Our organisation for sustainable development is characterised by the following key features:

• The Sustainability Committee of the Board oversees HSEC matters across the Group.
• Business line management has primary responsibility and accountability for HSEC performance.
• The HSEC function provides advice and guidance directly, as well as through a series of networks across the business.
• Clear links exist between remuneration and HSEC performance.
• The HSEC function advocates best practices and commercially effective global solutions.

At every level of the organisation, our line managers are responsible for HSEC matters. Although they are supported by functional personnel who provide specialist advice and support in managing all aspects of HSEC, ultimate responsibility rests with the general and senior management teams. Executive remuneration is directly linked to the financial and non-financial performance of the Company. Non-financial performance indicators include health, safety, environment and community targets.

See below for further details on the following responsibilities:

• Sustainability Committee of the Board
• Risk Management and Audit Committee
• Global Ethics Panel
• Executive Management
• HSEC Forum
• Corporate HSEC
• HSEC Networks.

The diagram below illustrates our organisational structure for sustainable development.

Sustainable Development Organisational Structure

Sustainability Committee of the Board

The Company's peak sustainable development governance body is the Sustainability Committee, a subcommittee of the Board.

Following a review of its effectiveness the Sustainability Committee was restructured during the year, and the Committee’s terms of reference are being reviewed. The Committee’s members now comprise only non-executive directors - Dr D C Brink (Chairman), Mr P M Anderson, Dr E G de Planque and Dr J M Schubert. Prof. Jim Galvin acts as an advisor to the Committee. The BHP Billiton Board itself consists of 14 directors: four executive and ten independent. The Committee met four times during the year. For profiles of Sustainability Committee members see Sustainability Committee of the Board Profiles.

The role of the Sustainability Committee is to assist the Board in its oversight of:

• health, safety, environment and community risks
• the Group’s compliance with applicable legal and regulatory requirements associated with health, safety, environment and community matters
• the Group’s performance in relation to health, safety, environment and community matters
• the performance and leadership of the health, safety and environment function and the sustainable development function
• the Group’s Annual Sustainability Summary Report
• the preparation of a report by the Committee to be included in the Annual Report.

Executive members and external advisors no longer sit as members of the Committee but participate in Committee work at the discretion of the non-executive director members. While not a governance body, the Forum on Corporate Responsibility brings together representatives of our senior management team, the leaders of several key non-government organisations and community opinion leaders to discuss and debate social and environmental matters relevant to the Company.

Risk Management and Audit Committee

The purpose of the Risk Management and Audit Committee is to assist the Board to fulfil its corporate governance and oversight responsibilities in relation to financial reporting, internal control structure, risk management systems and the internal and external audit functions. In this role they oversee the Global Ethics Panel.

Global Ethics Panel

The purpose of Global Ethics Panel is to assist the Chief Executive Officer in meeting the requirement in the Board Governance Document relating to the ethics and culture of the Group. The Global Ethics Panel promotes the effective implementation of our Guide to Business Conduct.

The Panel includes business representatives and corporate representatives from relevant functional areas – Group Audit Services, Human Resources and Legal – and two external representatives. Karen Wood, Special Advisor to the Chief Executive Officer and Head of Company Secretariat, holds the position of Chairman. Our external representatives are Dr Simon Longstaff, Executive Director, St James Ethics Centre; and Graham Evans, current Chairman of the Victorian Competition and Efficiency Commission, former chairman of the Global Ethics Panel and former Head of External Affairs at BHP Billiton.

In addition to providing a high-level point of contact for employees, the Global Ethics Panel regularly reviews all business conduct cases that have been raised through the Business Conduct helpline and fraud hotline or email system. It also assesses emerging policy issues and recommends to the Office of the Chief Executive appropriate changes to the Guide to Business Conduct.

Read more:

• Global Ethics Panel Charter
• Global Ethics Panel Member Profiles.

Executive Management

The Chief Executive Officer (CEO) holds delegated authority from the Board to achieve the Corporate Objective, save for those matters the Board has retained for its own decision-making. In devolving that authority the CEO has developed an Approvals Framework that delegates authority to committees and individual members of management. Notwithstanding those further delegations the CEO remains accountable to the Board for the authority delegated to him.

The CEO has established the Office of the Chief Executive (OCE) to assist him in exercising his authority. The role of the OCE is to provide advice to the CEO and to make determinations on matters defined in its Charter. The members of the OCE are:

• Charles Goodyear, Chief Executive Officer and Executive Director
• Mike Salamon, Executive President and Executive Director
• John Fast, Chief Legal Counsel and Head of External Affairs
• Chris Lynch, Group President Carbon Steel Materials and Executive Director
• Marius Kloppers, Group President Non-Ferrous Materials and Executive Director
• Robert Kirkby, Executive President
• Marcus Randolph, Chief Organisation Development Officer
• Alex Vanselow, Chief Financial Officer
• Karen Wood, Special Advisor to the CEO and Head of Group Secretariat
• J. Michael Yeager, Group President Energy.

The CEO draws on the work of other committees including the Executive Committee, Financial Risk Management Committee (FRMC) and the Investment Risk Committee (IRC).

The Executive Committee has a communications and influencing role across the Group. The FRMC monitors the Group’s financial risk management policies and exposures and approves financial transactions within the scope of its authority.The IRC oversees the management approval processes for major investments, which are designed to ensure that investments are aligned to the Group’s agreed strategies and values, risks are identified and evaluated, investments are fully optimised to produce the maximum shareholder value within an acceptable risk framework,; and appropriate risk management strategies are pursued.

HSEC Forum

The HSEC Forum is the peak functional group and includes Corporate representatives and HSEC functional heads from each CSG. The Forum is chaired by the Vice President HSE and sets the direction for the HSEC function, identifies priority issues, measures HSEC performance and builds consensus for the way forward.

Corporate HSEC

Core HSEC governance functions are provided from the Corporate Centre, with the majority of staff embedded in the Customer Sector Groups. A critical component of the HSEC governance function provided by Corporate is the HSEC audit program, specifically designed to ensure our Charter, Sustainable Development Policy and HSEC Management Standards are effectively implemented across the Group.

HSEC Networks

Across the Company, various specialist networks have been formed to foster the sharing of knowledge. Each network consists of people from across the Company who apply what they know about topics of common interest. Four specialist HSEC Networks have been established to manage the development of HSEC practices and the response to issues of Company-wide significance. The networks include:

• Global Community Network
• Environment Network
• Occupational Hygiene Network
• Safety Network.