The Electricity Networks Corporation trading as Western Power is a Western Australian government trading enterprise established under the Electricity Corporations Act 2005 (Act).
As a government trading enterprise, Western Power is not listed on the Australian Securities Exchange (ASX) but will apply the intent of the ASX principles of corporate governance to the extent that they are applicable and not inconsistent with the requirements of the Act and other applicable laws.
The board of directors is Western Power’s governing body and responsible to the Minister for Energy for Western Power’s performance. The respective duties and responsibilities of Western Power’s board are substantially set out in the Act.
Appointment of directors
Appointment of directors is governed by the Electricity Corporations Act 2005 (Act). Directors are appointed by the Governor of Western Australia (Governor) on nomination of the Minister for Energy. The Minister consults the Board before making director nominations.
In preparing to consult with the Minister, the Board undertakes appropriate checks in relation to matters such as relevant qualifications and experience, and potential conflicting interests.
The Board has appointed two standing committees to assist it to meet its functions and duties:
The SHEPC terms of reference specify that the committee must be comprised of a minimum of three members, the majority of whom must be non-executive directors. The terms of reference also specify that the SHEPC will be chaired by an independent director, who is not also the Board Chair. The members of the SHEPC are Denise Goldsworthy, Colin Beckett, Kathryn Barrie, and Vicki Krause.
The Chief Executive Officer who is also a director (Managing Director), Executive Manager Business & Customer Service, Head of Human Resources and General Counsel attend committee meetings by invitation. Details of the number of committee meetings held during the financial year, and members’ attendances at these meetings, are available in Western Power’s Annual Report.
The FRAC terms of reference specify that the FRAC must be comprised of a minimum of three members, the majority of whom must be non-executive directors. The terms of reference also specify that the FRAC will be chaired by an independent director, who is not also the Board Chair.
The members of the FRAC are Greg Martin (Deputy Board Chair), Peter Iancov and Eva Skira.
The Managing Director, Chief Financial Officer, General Counsel, Internal Audit Manager and representatives of the Office of the Auditor General, attend committee meetings by invitation.
The number of committee meetings held during the financial year and members’ attendance at those meetings are available in Western Power’s Annual Report.
The Act provides that the Board must comprise not less than four and not more than eight directors. There are currently seven non-executive directors and one executive director on Western Power’s Board. Western Power’s Chief Executive Officer has been appointed to the Board and given the role title of Managing Director.
The Board considers that all the directors collectively bring the requisite range of skills, knowledge and experience necessary to govern Western Power.
The Safety, Health, Environment & People Committee assists the Board Chair to review the size and composition of the Board and the mix of existing and desired competencies across its members. The overarching objective is that the Board has an appropriate blend of skills, experience, expertise and diversity that is aligned with Western Power's prevailing strategic direction.
The Board charter requires the majority of the Board will be independent directors.
The Board charter outlines the director independence standards to be considered in assessing independence, which are based on the premise that the majority of directors must be independent of management and free of any business or other relationship that could materially interfere, or could reasonably be perceived to interfere, with the exercise of the Board’s unfettered and independent judgment.
The Charter provides that the Board Chair and the Deputy Chair must be independent, non-executive directors (unless appointed by the Governor as a representative of the Western Australian State Government) and the role of the Chair and Chief Executive Officer cannot be filled by the same person.
The test of whether a business or other customer or supplier relationship is material is based on the nature of the relevant relationship and on the circumstances of the individual director. Materiality is considered from the perspective of Western Power, the persons or organisations with which the director has an association and from the perspective of the director. The Board considers that a customer or supplier is material where the amount receivable or payable, respectively, by Western Power in any 12 month period exceeds $1.5 million. This threshold is not conclusive and the Board will examine both the qualitative and quantitative nature of a director’s relationship with any particular customer or supplier when assessing director independence.
The Board regularly considers the independence of each director currently in office and has determined that the majority are free of business or other relationships that could materially interfere, or could reasonably be perceived to interfere, with the exercise of the director’s unfettered and independent judgment. For information about each director, see the director profiles.
Conflicts of interest
Directors must, on an ongoing basis, keep the Board advised of any personal or other interest that could potentially conflict with Western Power’s interests. Board members must comply with Western Power’s conflicts of interest standard and are provided with guidelines outlining the duties and obligations of directors and executive officers on their appointment.
The agenda of each Board and committee meeting includes a standing item for declarations of material personal or other interests to be made.
A director with an actual or potential conflict of interest in relation to a matter being dealt with at a Board or committee meeting must not vote on or be present at the meeting while the matter is considered, unless the Board by resolution decides that the interest should not disqualify the director.
Terms of appointment and induction training
Under the Electricity Corporations Act 2005 (Act), a director is appointed for a period of up to three years and is eligible for reappointment. Periods of appointment must be structured to ensure that the terms of approximately one third of directors expire each calendar year. The Governor may remove a director from office at any time.
On appointment, a director is provided with information recommended by the ASX governance principles (including information on their remuneration, duties, rights and responsibilities, the Board’s expectations regarding involvement with committee work and the requirement to disclose interests and other matters which may affect their independence). Similar information is provided to members of the senior executive team.
The General Counsel oversees establishment and implementation of an effective induction process for new directors. The director induction process includes a discussion with the Managing Director and other senior managers, and the provision of information on key corporate and Board policies and strategic plans.
Western Power’s directors’ are inducted on Western Power’s corporate governance framework which comprises various terms of reference and codes that have been prepared in accordance with statutory requirements, corporate governance standards and best practice guidelines that are relevant to Western Power.
All directors are encouraged to undertake personal professional development to maintain the skills required to discharge their duties.
The remuneration of non-executive directors is determined by the Minister.
Details of the remuneration policy, together with details of the remuneration paid to Western Power’s directors, are set out in the remuneration section of the directors’ report included in Western Power’s Annual Report.
There are no schemes for retirement benefits, other than superannuation, provided for any non-executive director.
The role of Company Secretary is part of the accountabilities of Western Power’s General Counsel. The General Counsel is an executive manager at Western Power. The General Counsel’s qualifications and experience are set out in Western Power’s Annual Report. The General Counsel is accountable directly to the Board, through the Board Chair, on all matters to do with the governance of the Board. The General Counsel is responsible for ensuring that Board procedures are complied with and that governance matters are addressed. All directors have access to the General Counsel’s advice and services.
The Board meets as often as required to address strategic issues of Western Power’s operations. A schedule of meetings is set each year with further special meetings of the Board arranged on an as needs basis.
Details of the number of Board meetings during the financial year and directors’ attendance at these meetings are available in Western Power’s Annual Report. Proceedings at Board meetings are governed by the Act and corporate governance framework.
Code of conduct and public interest disclosure policy
The Board has approved a code of conduct that applies to directors, officers and all employees of Western Power.
Collectively, the code of conduct and respective policies:
Diversity at Western Power
Western Power recognises that a diverse workforce, which is reflective of the wider community it serves and represents, is better able to understand and meet its strategic objectives and the needs of its customers.
By employing a workforce reflective of the wider community, Western Power is able to draw on varying perspectives in order to assist in the achievement of these goals. Western Power values diversity in its workforce and in support of this has established an equity and diversity standard.
The commitment to diversity in its workforce remains a strong focus for Western Power. The strategies aimed at achieving its diversity targets (including gender) are actively managed through an equity and diversity standard. This standard is endorsed in accordance with the Equal Opportunity Act 1984 (WA) and supports Western Power in the achievement of its corporate objectives through the attraction, retention, development and engagement of a wide variety of individuals with varying skills, experiences and perspectives.
The role of the Finance, Risk & Audit Committee (FRAC) is to assist the Board in discharging its responsibilities in relation to Western Power’s financial and treasury management and reporting, and risk management and compliance. Risk assurance and internal audit programs are integral components of Western Power’s governance process. A full time Internal Audit Manager, supported by internal and external resources, provides independent and objective risk assurance and audit services designed to add value and improve Western Power’s operations and legislative and regulatory compliance. FRAC oversees the performance of, and response to, internal audits (by the Internal Audit area) and the external audit (by the Auditor General) of the corporation.
The Electricity Corporations Act 2005 imposes requirements on Western Power to report to the Minister on a range of matters. The FRAC monitors Western Power’s systems and processes to achieve compliance with these reporting requirements.
Our compliance standard and framework which is designed to ensure that all Western Power employees are aware of relevant legislative obligations, including those relating to disclosure and reporting.
The compliance standard and framework:
As Western Power is a Western Australian State Government owned corporation, it does not issue or have any issued shares. The corporation is wholly owned by the Government.
The Electricity Corporations Act 2005 imposes the following reporting obligations on Western Power:
Western Power has a framework to manage its strategic, operational, regulatory and reporting risks. The corporate risk management standard and framework:
Executive Managers and Heads of Function are responsible for identifying risks and implementing strategies to mitigate them. The Finance, Risk and Audit Committee (FRAC) oversees the risk management standard and framework and reviews the effectiveness of key mitigation strategies.
The Board (via the FRAC) receives a quarterly risk report which notifies directors of any issues of concern. An annual assurance is provided to the Board from the Chief Executive Officer and the Chief Financial Officer that effective risk management processes in relation to material business risks are in place.
Financial risk issues are managed in line with the financial management policy that requires regular reporting to the FRAC on treasury related activities.
A discussion of Western Power’s material exposure to economic, environmental and social sustainability risk is contained in the directors’ report included in Western Power’s Annual Report.
The remuneration section contained within annual financial report sets out details of Western Power’s policies and practices for remunerating directors, senior management and employees.
The role of the Safety, Health, Environment & People Committee includes assisting the Board in discharging its responsibilities in relation to Western Power’s remuneration governance practices, including in establishing remuneration and human resources policies, and the performance review framework.