The board assesses director independence on an annual basis, or, if it feels it is warranted, depending on disclosures made by individual directors.
Determination of director independence
Directors are deemed to be independent if they are independent of management and have no material business or other relationship with the Alumina Limited Group that could materially impede their objectivity or the exercise or independent judgement of the director or materially influence their ability to act in the best interests of the Group.
In reaching their judgements on director independence, the directors considered:
- any existing relationships with the company, including professional affiliations and contractual arrangements whether directly or indirectly with the director
- any past relationships with the company, either direct or indirect
- materiality thresholds
- the definitions of independence embodied in Australian and US Corporate governance standards
Alumina Limited’s guidance for materiality includes:
- the value of a contractual relationship is the greater of $250,000 or 2% of the other company's consolidated gross revenues
- in relation to a principal of or employee of a present or former material professional adviser or consultant of the company within the previous 3 years, the greater of $250,000 or 2% of the professional adviser's or consultant's gross revenues, or
- for an employee or any family member currently employed as an executive officer by another company that makes payments to or receives payments from the Alumina Limited Group for property or services in an amount that exceeds, in any single fiscal year, the greater of $250,000 or 2% of the other company's consolidated gross revenues.
The Board has concluded that all non-executive directors are independent. In reaching that conclusion the Board has considered the following:
- Mr Pizzey was, until December 2003, Group President of the Alcoa World Alumina & Chemicals joint venture. Mr Pizzey’s previous employment with Alcoa Inc and AWAC materially does not impede his objectivity, exercise of independent judgment or ability to act in the best interests of the Company. Mr Pizzey’s employment with Alcoa Inc ceased in December 2003, over 13 years ago.
- Mr Day had no previous association with the Company or any other relationships that were relevant to his independence.
- Ms Stein was from June 2004 to May 2017 a Non-Executive Director of Diversified Utilities Energy Trust (DUET), a majority owner of the Dampier to Bunbury Natural Gas Pipeline (DBNGP) in which Alcoa of Australia Limited had a 20 per cent interest and is a user. Alumina Limited has a 40 per cent interest in Alcoa of Australia. Ms Stein declared her interest and has not participated in any decision making matter that relates to Alcoa of Australia Limited's dealings with the DBNGP. The Board concluded at the time that Ms Stein's directorship of DUET did not prejudice her independence.
- Mr Ferraro does not have any previous association with Alumina Limited or any other relationships that are relevant to his independence.
- Mr Zeng is not considered independent due to his senior management role in a substantial shareholder in Alumina Limited.
- Mr Wasow was not considered independent due to his executive responsibilities.
For further information on materiality thresholds and director independence, please refer to our website for a copy of the Director Independence Policy.