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.
In 2017 the Board has concluded that the majority of 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 Pizzey retired as Chairman and Non-Executive Director of the Company on 31 March 2018.
- 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) and a user of DBNGP. Alcoa of Australia Limited held a 20 per cent interest until divesting it in April 2016. 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 had no previous association with the Company or any other relationships that were relevant to his independence. Following his appointment as CEO and Managing Director on 1 June 2017, Mr Ferraro was not considered independent due to his executive responsibilities.
- 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 as CEO and Managing Director until his retirement on 31 May 2017.
- Ms O’Toole had no previous association with the Company or any other relationships that were relevant to her independence.
- Mr Bevan was CEO of Alumina Limited between 2008 and 2013. The Board concluded that his employment with Alumina does not materially impede his objectivity, exercise of independent judgement, or ability to act in the best interests of the Company.
For further information on materiality thresholds and director independence, please refer to our website for a copy of the Director Independence Policy.