About Alumina

• Who we are
• Demerger Information
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• Alumina Strategy
• AWAC Agreements
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• Governance
  • Constitution
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  • Committee Charters
  • Values & Code of Conduct
  • Director Independence
  • Risk Management
  • Shareholder Communication Strategy
  • Board Performance Evaluation
  • NYSE Corporate Governance Standards
  • Board Succession Planning

Director Independence

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.

Conclusion

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 previously held options in Alcoa Inc however his holding expired in January 2012. It is considered the Alcoa Inc options did not constitute a material personal interest. 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 seven years ago, and his role as non-executive director does not involve him in reviewing actions which he had taken previously as an executive of Alcoa Inc.

• Mr Hay is a former partner of the legal firm Freehills, a provider of services to the company prior to April 2004. The Board reviewed the company’s past association with Freehills and concluded that the past association, which was below our materiality threshold of $250,000 or 2% of Freehills consolidated revenue, does not materially prejudice Mr Hay’s independence. 
  

• Ms Stein is a director of DUET, a majority owner of the Dampier to Bunbury Natural Gas Pipeline (DBNGP) in which Alcoa of Australia Limited has 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 Alumina's dealings with the DBNGP. The directors concluded that Ms Stein's directorship of DUET does not prejudice her independence.
  

• Mr Wasow does not have any previous association with Alumina Limited or any other relationships that are relevant to his independence.

For further information on materiality thresholds and director independence, please refer to our website for a copy of the Director Independence Policy.

Policy on director independence