The Board is accountable to shareholders for the performance of our business. It oversees and directs our business strategy, providing independent oversight for how it is executed and delivered by our management team.
Roles and responsibilities of the Board
Our Board’s principal responsibility is to provide strategic guidance to our business. It’s also responsible for effectively monitoring the management team and safeguarding the rights and interests of shareholders and other stakeholders.
A number of Board Committees, which are made up of smaller groups of Directors and Independent Committee Members, deal with complex issues or specialised areas. They make recommendations to the full Board, which is collectively responsible for the resulting decisions.
The Board delegates day-to-day business management to our Managing Director.
The Board Charter outlines the Board’s specific responsibilities, powers and functions. These include strategic direction, risk management, performance monitoring and establishing values and policies.
Each Director receives written correspondence that sets out the key terms of their appointment. In addition, we require new Directors to execute a Deed of Access and Indemnity that:
- Grants the Director certain rights of access to Company information,
- Provides the Director with certain indemnities and insurance arrangements,
- Imposes obligations on the Director to provide information concerning potential conflicts of interest and meet our continuous disclosure obligations.
See Board for the names, experience, and terms in office for our current Directors and Independent Committee Members.
Selection, appointment or election of the Board
In line with best practice governance, we are committed to ongoing Board renewal. This requires a regular turnover of Directors supported by a rigorous recruitment, selection and verification process.
Having a Board with diverse skills and experiences aligns with the principles of our Diversity and Inclusion Policy and ensures robust decision-making.
The Board People and Nominations Committee is responsible for reviewing candidates against any skills gaps on the Board. It uses a matrix that records the skills, experience and technical capabilities of current Directors against the target mix of capabilities. The matrix includes oil and gas expertise, government relations, finance and audit, risk management, mergers and acquisitions, global experience and remuneration.
The Committee uses the results of the matrix review to brief the selected specialist recruitment firms. As well as specific skills, we look for individuals who are leaders in their field and committed to excellence.
To help shareholders make an informed decision when voting for a Director who is standing for election or re-election, the Notice of Meeting for the Annual General Meeting contains the candidate’s biographical details and a supporting statement from the Board.
Once a person is proposed for appointment as a Director, they undergo thorough reference checks and an extensive interview process with the Chair and other Board members before being formally engaged.
New Directors participate in an induction programme that helps them understand the Company's strategic objectives, values and culture and how our operations are managed. It also covers the Oil Search Code of Conduct, other applicable corporate policies and relevant administrative and procedural arrangements.
We offer an annual education programme to all our Directors and they visit our operating facilities at least once a year.
Director independence and other appointments
The Board acknowledges that Directors should have no relationships that could materially interfere with their objectivity when making decisions, assessing management information and advice, setting policy or carrying out their overall responsibilities.
Among the key criteria are being independent from management and the absence of any business relationship that could materially interfere with the Director’s:
- Independent judgment,
- Ability to provide a strong, valuable contribution to the Board’s deliberations, or
- Ability to act in Oil Search’s best interests.
The Board acknowledges that Directors may be invited to sit on the Board of other companies. We believe such appointments can benefit our Company by broadening their experience and knowledge. To ensure each Director has enough time and commitment to fulfill their obligations to us, the Board’s People and Nominations Committee may limit the number of other directorships.
Each Director is responsible for notifying the Chair and Group Secretary about any external positions, appointments or arrangements that could create a potential conflict of interest from an independence perspective.
See Board for details of all our current Director’s’ external appointments.
Board performance evaluation
Each year, a performance evaluation determines the effectiveness of the Board, Board Committees, individual Directors and the Chair. The evaluation involves:
- A questionnaire completed by each Director,
- A one-on-one meeting between the Chair and each Director to discuss their responses, and/or
- A report for the full Board outlining the evaluators’ findings, recommendations and suggestions.
The Board assesses the Managing Director’s performance annually and provides feedback through the Chair.
The Managing Director reviews the performance of each member of the senior management team every year against a variety of individual and corporate Key Performance Indicators and agreed deliverables. For information on senior management and other employee performance management approaches, see Performance and Remuneration.
Remuneration for Non-Executive Directors
Only Non-Executive Directors receive fees. These reflect their respective duties and responsibilities and the time required to make a meaningful and effective contribution to Company affairs.
At the 2012 Annual General Meeting, our shareholders voted to cap the total funds available for remunerating Non-Executive Directors at A$2,500,000 a year. Any changes to the cap must be approved by a general resolution put to our shareholders.
The fees and fee cap are reviewed periodically by the Board. When doing so, the Board may draw on the recommendations and advice of external independent remuneration consultants, who benchmark the fees against market rates for Non-Executive Directors.
The review takes into account:
- The level of fees paid to Non-Executive Directors of other Australian listed corporations of a similar size and complexity to Oil Search,
- The scale of our current and planned activities,
- The responsibilities of each Non-Executive Director, and
- The level of work we require of our Board members.
In addition to Board and Board Committee fees, Non-Executive Directors are entitled to be reimbursed for reasonable travel, accommodation and other expenses incurred in attending Board, Board Committee or shareholder meetings.
There is no share plan for our Non-Executive Directors.
For further information on Board governance and remuneration, see our latest Annual Report.
For information on senior management and other employee remuneration and incentives, see Performance and Remuneration.