WORLEYPARSONS LIMITED (WOR) APPENDIX 4G AND CORPORATE GOVERNANCE STATEMENT

Transcription

1 Level 12, 141 Walker Street North Sydney NSW 2060 Australia Telephone: Facsimile: worleyparsons.com WorleyParsons Limited ABN August 2015 Manager, Market Announcements Office ASX Limited Level 4, Exchange Centre 20 Bridge Street SYDNEY NSW 2000 Dear Sir/Madam WORLEYPARSONS LIMITED (WOR) APPENDIX 4G AND CORPORATE GOVERNANCE STATEMENT Please find attached the Appendix 4G and Corporate Governance Statement in accordance with Listing Rules and Yours faithfully WorleyParsons Peter Janu Company Secretary & General Counsel Corporate

2 Rules and Appendix 4G Key to Disclosures Corporate Governance Council Principles and Recommendations Name of entity: WorleyParsons Limited ABN / ARBN: Financial year ended: June 2015 Our corporate governance statement 2 for the above period above can be found at: 3 These pages of our annual report: This URL on our website: porategovernance.aspx The Corporate Governance Statement is accurate and up to date as at 26 August 2015 and has been approved by the board. The annexure includes a key to where our corporate governance disclosures can be located. Date: 26 August 2015 Name of Director or Secretary authorising lodgement: Peter Janu Company Secretary 1 Under Listing Rule 4.7.3, an entity must lodge with ASX a completed Appendix 4G at the same time as it lodges its annual report with ASX. Listing Rule requires an entity that is included in the official list as an ASX Listing to include in its annual report either a corporate governance statement that meets the requirements of that rule or the URL of the page on its website where such a statement is located. The corporate governance statement must disclose the extent to which the entity has followed the recommendations set by the ASX Corporate Governance Council during the reporting period. If the entity has not followed a recommendation for any part of the reporting period, its corporate governance statement must separately identify that recommendation and the period during which it was not followed and state its reasons for not following the recommendation and what (if any) alternative governance practices it adopted in lieu of the recommendation during that period. Under Listing Rule 4.7.4, if an entity chooses to include its corporate governance statement on its website rather than in its annual report, it must lodge a copy of the corporate governance statement with ASX at the same time as it lodges its annual report with ASX. The corporate governance statement must be current as at the effective date specified in that statement for the purposes of rule Corporate governance statement is defined in Listing Rule to mean the statement referred to in Listing Rule which discloses the extent to which an entity has followed the recommendations set by the ASX Corporate Governance Council during a particular reporting period. 3 Mark whichever option is correct and then complete the page number(s) of the annual report, or the URL of the web page, where the entity s corporate governance statement can be found. You can, if you wish, delete the option which is not applicable. Throughout this form, where you are given two or more options to select, you can, if you wish, delete any option which is not applicable and just retain the option that is applicable. If you select an option that includes OR at the end of the selection and you delete the other options, you can also, if you wish, delete the OR at the end of the selection. Page 1

3 ANNEXURE KEY TO CORPORATE GOVERNANCE DISCLOSURES Corporate Governance Council recommendation We have followed the recommendation in full for the whole of the period above. We have disclosed We have NOT followed the recommendation in full for the whole of the period above. We have disclosed 4 PRINCIPLE 1 LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT 1.1 A listed entity should disclose: (a) the respective roles and responsibilities of its board and management; and those matters expressly reserved to the board and those delegated to management. the fact that we follow this recommendation: and information about the respective roles and responsibilities of our board and management (including those matters expressly reserved to the board and those delegated to management): we are an externally managed entity and this recommendation 1.2 A listed entity should: (a) undertake appropriate checks before appointing a person, or putting forward to security holders a candidate for election, as a director; and provide security holders with all material information in its possession relevant to a decision on whether or not to elect or re-elect a director. the fact that we follow this recommendation: we are an externally managed entity and this recommendation 1.3 A listed entity should have a written agreement with each director and senior executive setting out the terms of their appointment. the fact that we follow this recommendation: we are an externally managed entity and this recommendation 1.4 The company secretary of a listed entity should be accountable directly to the board, through the chair, on all matters to do with the proper functioning of the board. the fact that we follow this recommendation: we are an externally managed entity and this recommendation 4 If you have followed all of the Council s recommendations in full for the whole of the period above, you can, if you wish, delete this column from the form and re-format it. Page 2

4 Corporate Governance Council recommendation 1.5 A listed entity should: (a) have a diversity policy which includes requirements for the board or a relevant committee of the board to set measurable objectives for achieving gender diversity and to assess annually both the objectives and the entity s progress in achieving them; (c) disclose that policy or a summary of it; and disclose as at the end of each reporting period the measurable objectives for achieving gender diversity set by the board or a relevant committee of the board in accordance with the entity s diversity policy and its progress towards achieving them and either: (1) the respective proportions of men and women on the board, in senior executive positions and across the whole organisation (including how the entity has defined senior executive for these purposes); or (2) if the entity is a relevant employer under the Workplace Gender Equality Act, the entity s most recent Gender Equality Indicators, as defined in and published under that Act. 1.6 A listed entity should: (a) have and disclose a process for periodically evaluating the performance of the board, its committees and individual directors; and disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process. We have followed the recommendation in full for the whole of the period above. We have disclosed the fact that we have a diversity policy that complies with paragraph (a): and a copy of our diversity policy or a summary of it: at eresponsibility/pages/default.aspx and the measurable objectives for achieving gender diversity set by the board or a relevant committee of the board in accordance with our diversity policy and our progress towards achieving them: and the information referred to in paragraphs (c)(1) or (2): the evaluation process referred to in paragraph (a): and the information referred to in paragraph : We have NOT followed the recommendation in full for the whole of the period above. We have disclosed 4 we are an externally managed entity and this recommendation we are an externally managed entity and this recommendation Page 3

5 Corporate Governance Council recommendation 1.7 A listed entity should: (a) have and disclose a process for periodically evaluating the performance of its senior executives; and disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process. We have followed the recommendation in full for the whole of the period above. We have disclosed the evaluation process referred to in paragraph (a): and the information referred to in paragraph : We have NOT followed the recommendation in full for the whole of the period above. We have disclosed 4 we are an externally managed entity and this recommendation Page 4

6 Corporate Governance Council recommendation PRINCIPLE 2 - STRUCTURE THE BOARD TO ADD VALUE 2.1 The board of a listed entity should: (a) have a nomination committee which: (1) has at least three members, a majority of whom are independent directors; and (2) is chaired by an independent director, and disclose: (3) the charter of the committee; (4) the members of the committee; and (5) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or if it does not have a nomination committee, disclose that fact and the processes it employs to address board succession issues and to ensure that the board has the appropriate balance of skills, knowledge, experience, independence and diversity to enable it to discharge its duties and responsibilities effectively. We have followed the recommendation in full for the whole of the period above. We have disclosed the fact that we have a nomination committee that complies with paragraphs (1) and (2): and a copy of the charter of the committee: at CorporateGovernance.aspx and the information referred to in paragraphs (4) and (5): in our Corporate Governance Statement (paragraph (4)) AND at (paragraph (5)) Note: The number of times the committee met throughout the period and the individual attendances of members may be found on page 46 of our 2015 Annual Report. That report may be accessed at: /Pages/default.aspx We have NOT followed the recommendation in full for the whole of the period above. We have disclosed 4 we are an externally managed entity and this recommendation Note: The Chairman of our Nominations Committee is not an independent director. However, we have followed the remainder of the recommendation in full for the whole of the period above. 2.2 A listed entity should have and disclose a board skills matrix setting out the mix of skills and diversity that the board currently has or is looking to achieve in its membership. our board skills matrix: we are an externally managed entity and this recommendation Page 5

7 Corporate Governance Council recommendation 2.3 A listed entity should disclose: (a) the names of the directors considered by the board to be independent directors; (c) if a director has an interest, position, association or relationship of the type described in Box 2.3 but the board is of the opinion that it does not compromise the independence of the director, the nature of the interest, position, association or relationship in question and an explanation of why the board is of that opinion; and the length of service of each director. 2.4 A majority of the board of a listed entity should be independent directors. 2.5 The chair of the board of a listed entity should be an independent director and, in particular, should not be the same person as the CEO of the entity. 2.6 A listed entity should have a program for inducting new directors and provide appropriate professional development opportunities for directors to develop and maintain the skills and knowledge needed to perform their role as directors effectively. We have followed the recommendation in full for the whole of the period above. We have disclosed the names of the directors considered by the board to be independent directors: and, where applicable, the information referred to in paragraph : and the length of service of each director: on pages 49 and 50 of our 2015 Annual Report. That report may be accessed at: /Pages/default.aspx the fact that we follow this recommendation: the fact that we follow this recommendation: the fact that we follow this recommendation: We have NOT followed the recommendation in full for the whole of the period above. We have disclosed 4 Statement we are an externally managed entity and this recommendation we are an externally managed entity and this recommendation Note: The Chairman of our Board is not an independent director. However, we have followed the remainder of the recommendation in full for the whole of the period above. we are an externally managed entity and this recommendation Page 6

8 Corporate Governance Council recommendation PRINCIPLE 3 ACT ETHICALLY AND RESPONSIBLY 3.1 A listed entity should: (a) have a code of conduct for its directors, senior executives and employees; and disclose that code or a summary of it. We have followed the recommendation in full for the whole of the period above. We have disclosed our code of conduct or a summary of it: at egovernance.aspx We have NOT followed the recommendation in full for the whole of the period above. We have disclosed 4 Statement Page 7

9 Corporate Governance Council recommendation PRINCIPLE 4 SAFEGUARD INTEGRITY IN CORPORATE REPORTING We have followed the recommendation in full for the whole of the period above. We have disclosed We have NOT followed the recommendation in full for the whole of the period above. We have disclosed The board of a listed entity should: (a) have an audit committee which: (1) has at least three members, all of whom are nonexecutive directors and a majority of whom are independent directors; and (2) is chaired by an independent director, who is not the chair of the board, and disclose: (3) the charter of the committee; the fact that we have an audit committee that complies with paragraphs (1) and (2): and a copy of the charter of the committee: at CorporateGovernance.aspx Statement (4) the relevant qualifications and experience of the members of the committee; and (5) in relation to each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or if it does not have an audit committee, disclose that fact and the processes it employs that independently verify and safeguard the integrity of its corporate reporting, including the processes for the appointment and removal of the external auditor and the rotation of the audit engagement partner. and the information referred to in paragraphs (4) and (5): Note: Relevant qualifications and experience of committee members may be found on pages 49 and 50 of our 2015 Annual Report. The number of times the committee met throughout the period and the individual attendances of members may be found on page 46 of our 2015 Annual Report. That report may be accessed at: /Pages/default.aspx 4.2 The board of a listed entity should, before it approves the entity s financial statements for a financial period, receive from its CEO and CFO a declaration that, in their opinion, the financial records of the entity have been properly maintained and that the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of the entity and that the opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively. the fact that we follow this recommendation: Statement Page 8

10 Corporate Governance Council recommendation 4.3 A listed entity that has an AGM should ensure that its external auditor attends its AGM and is available to answer questions from security holders relevant to the audit. PRINCIPLE 5 MAKE TIMELY AND BALANCED DISCLOSURE 5.1 A listed entity should: (a) have a written policy for complying with its continuous disclosure obligations under the Listing Rules; and disclose that policy or a summary of it. PRINCIPLE 6 RESPECT THE RIGHTS OF SECURITY HOLDERS We have followed the recommendation in full for the whole of the period above. We have disclosed the fact that we follow this recommendation: our continuous disclosure compliance policy or a summary of it: at CorporateGovernance.aspx We have NOT followed the recommendation in full for the whole of the period above. We have disclosed 4 we are an externally managed entity that does not hold an annual general meeting and this recommendation is therefore not applicable Statement 6.1 A listed entity should provide information about itself and its governance to investors via its website. information about us and our governance on our website: at px Statement and CorporateGovernance.aspx 6.2 A listed entity should design and implement an investor relations program to facilitate effective two-way communication with investors. the fact that we follow this recommendation: Statement 6.3 A listed entity should disclose the policies and processes it has in place to facilitate and encourage participation at meetings of security holders. our policies and processes for facilitating and encouraging participation at meetings of security holders: we are an externally managed entity that does not hold periodic meetings of security holders and this recommendation Page 9

11 Corporate Governance Council recommendation 6.4 A listed entity should give security holders the option to receive communications from, and send communications to, the entity and its security registry electronically. PRINCIPLE 7 RECOGNISE AND MANAGE RISK We have followed the recommendation in full for the whole of the period above. We have disclosed the fact that we follow this recommendation: We have NOT followed the recommendation in full for the whole of the period above. We have disclosed 4 Statement 7.1 The board of a listed entity should: (a) have a committee or committees to oversee risk, each of which: (1) has at least three members, a majority of whom are independent directors; and (2) is chaired by an independent director, and disclose: (3) the charter of the committee; (4) the members of the committee; and (5) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or if it does not have a risk committee or committees that satisfy (a) above, disclose that fact and the processes it employs for overseeing the entity s risk management framework. the fact that we have a committee or committees to oversee risk that comply with paragraphs (1) and (2): and a copy of the charter of the committee: at CorporateGovernance.aspx and the information referred to in paragraphs (4) and (5): in our Corporate Governance Statement (paragraph (4)) AND at (paragraph (5)) Note: The number of times the committee met throughout the period and the individual attendances of members may be found on page 46 of our 2015 Annual Report. That report may be accessed at: /Pages/default.aspx Statement 7.2 The board or a committee of the board should: (a) review the entity s risk management framework at least annually to satisfy itself that it continues to be sound; and disclose, in relation to each reporting period, whether such a review has taken place. the fact that board or a committee of the board reviews the entity s risk management framework at least annually to satisfy itself that it continues to be sound: and that such a review has taken place in the reporting period covered by this Appendix 4G: Statement Page 10

12 Corporate Governance Council recommendation 7.3 A listed entity should disclose: (a) if it has an internal audit function, how the function is structured and what role it performs; or if it does not have an internal audit function, that fact and the processes it employs for evaluating and continually improving the effectiveness of its risk management and internal control processes. 7.4 A listed entity should disclose whether it has any material exposure to economic, environmental and social sustainability risks and, if it does, how it manages or intends to manage those risks. We have followed the recommendation in full for the whole of the period above. We have disclosed how our internal audit function is structured and what role it performs: whether we have any material exposure to economic, environmental and social sustainability risks and, if we do, how we manage or intend to manage those risks: in our Corporate Governance Statement AND Note: The Corporate Governance Statement refers readers to the Risk section of our Operating and Financial Review. That section may be found on pages 43 and 44 of our 2015 Annual Report. That report may be accessed at: efault.aspx We have NOT followed the recommendation in full for the whole of the period above. We have disclosed 4 Statement Statement Page 11

13 Corporate Governance Council recommendation PRINCIPLE 8 REMUNERATE FAIRLY AND RESPONSIBLY We have followed the recommendation in full for the whole of the period above. We have disclosed We have NOT followed the recommendation in full for the whole of the period above. We have disclosed The board of a listed entity should: (a) have a remuneration committee which: (1) has at least three members, a majority of whom are independent directors; and (2) is chaired by an independent director, and disclose: (3) the charter of the committee; (4) the members of the committee; and (5) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or if it does not have a remuneration committee, disclose that fact and the processes it employs for setting the level and composition of remuneration for directors and senior executives and ensuring that such remuneration is appropriate and not excessive. the fact that we have a remuneration committee that complies with paragraphs (1) and (2): and a copy of the charter of the committee: at CorporateGovernance.aspx and the information referred to in paragraphs (4) and (5): in our Corporate Governance Statement (paragraph (4)) AND Note: The number of times the committee met throughout the period and the individual attendances of members may be found on page 46 of our 2015 Annual Report. That report may be accessed at: /Pages/default.aspx we are an externally managed entity and this recommendation is therefore not applicable 8.2 A listed entity should separately disclose its policies and practices regarding the remuneration of non-executive directors and the remuneration of executive directors and other senior executives. separately our remuneration policies and practices regarding the remuneration of non-executive directors and the remuneration of executive directors and other senior executives: we are an externally managed entity and this recommendation Note: Those policies and practices are disclosed in the Remuneration Report set out on pages 51 to 66 of our 2015 Annual Report. That report may be accessed at: /Pages/default.aspx Page 12

14 Corporate Governance Council recommendation We have followed the recommendation in full for the whole of the period above. We have disclosed We have NOT followed the recommendation in full for the whole of the period above. We have disclosed A listed entity which has an equity-based remuneration scheme should: (a) have a policy on whether participants are permitted to enter into transactions (whether through the use of derivatives or otherwise) which limit the economic risk of participating in the scheme; and disclose that policy or a summary of it. our policy on this issue or a summary of it: Note: Our Securities Dealing Policy discloses our policy regarding entry into transactions which limit the economic risk of participating in our equity-based remuneration scheme and may be accessed at: w e do not have an equity-based remuneration scheme and this recommendation OR we are an externally managed entity and this recommendation CorporateGovernance.aspx ADDITIONAL DISCLOSURES APPLICABLE TO EXTERNALLY MANAGED LISTED ENTITIES - Alternative to Recommendation 1.1 for externally managed listed entities: The responsible entity of an externally managed listed entity should disclose: the information referred to in paragraphs (a) and : Statement (a) the arrangements between the responsible entity and the listed entity for managing the affairs of the listed entity; the role and responsibility of the board of the responsible entity for overseeing those arrangements. - Alternative to Recommendations 8.1, 8.2 and 8.3 for externally managed listed entities: An externally managed listed entity should clearly disclose the terms governing the remuneration of the manager. the terms governing our remuneration as manager of the entity: Statement Page 13

15 Corporate Governance Statement

16 WorleyParsons Corporate Governance Statement 2015 CORPORATE GOVERNANCE STATEMENT INTRODUCTION The Board of Directors of WorleyParsons Limited (Board) strives to ensure that WorleyParsons Limited (Company) and the entities it controls (Group) meet high standards of safety, performance and governance. The Group recognizes that it has responsibilities to its shareholders, customers, employees and suppliers as well as to the communities in which it operates. The Board has ultimate authority over, and oversight of, the Group and regards corporate governance as a critical element in achieving the Group s objectives. Accordingly, the Board has adopted appropriate charters, codes and policies and established a number of committees (Committees or Board Committees) to discharge its duties. The Corporate Governance page in the Investor Relations section of the Group s website ( InvestorRelations/Pages/CorporateGovernance.aspx) contains most of the charters, codes and policies which are referred to in this statement (or a summary of them). These documents are periodically reviewed and enhanced to take account of changes in the law and governance practices. The Group s governance systems meet the requirements of the Corporations Act 2001 (Act) and the Listing Rules of the Australian Securities Exchange (ASX Listing Rules and ASX respectively). As required by the ASX Listing Rules, this statement discloses the extent to which the Company has followed the 3rd Edition of the ASX Corporate Governance Council s Corporate Governance Principles and Recommendations (ASX Recommendations) during the reporting period comprising the year ended 30 June 2015 (Reporting Period). Except where otherwise explained, the Company followed all of the ASX Recommendations during the Reporting Period. The following table indicates where specific ASX Recommendations are dealt with in this statement: PRINCIPLES AND RECOMMENDATIONS SECTION Principle 1: Lay solid foundations for management and oversight 1.1 A listed entity should disclose: a) the respective roles and responsibilities of its board and management; and b) those matters expressly reserved to the board and those delegated to management. 1.2 A listed entity should: a) undertake appropriate checks before appointing a person, or putting forward to security holders a candidate for election, as a director; and b) provide security holders with all material information in its possession relevant to a decision on whether or not to elect or re-elect a director. 1.3 A listed entity should have a written agreement with each director and senior executive setting out the terms of their appointment. 1.4 The company secretary of a listed entity should be accountable directly to the board, through the chair, on all matters to do with the proper functioning of the board. 1.5 A listed entity should: a) have a diversity policy which includes requirements for the board or a relevant committee of the board to set measurable objectives for achieving gender diversity and to assess annually both the objectives and the entity s progress in achieving them; b) disclose that policy or a summary of it; and c) disclose as at the end of each reporting period the measurable objectives for achieving gender diversity set by the board or a relevant committee of the board in accordance with the entity s diversity policy and its progress towards achieving them, and either: 1. the respective proportions of men and women on the board, in senior executive positions and across the whole organization (including how the entity has defined senior executive for these purposes); or 2. if the entity is a relevant employer under the Workplace Gender Equality Act, the entity s most recent Gender Equality Indicators, as defined in and published under that Act. 1.6 A listed entity should: a) have and disclose a process for periodically evaluating the performance of the board, its committees and individual directors; and b) disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process. 2.1 and and and

17 WorleyParsons Corporate Governance Statement 2015 PRINCIPLES AND RECOMMENDATIONS SECTION 1.7 A listed entity should: a) have and disclose a process for periodically evaluating the performance of its senior executives; and b) disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process. Principle 2: Structure the board to add value 2.1 The board of a listed entity should: a) have a nomination committee which: 1. has at least three members, a majority of whom are independent directors; and 2. is chaired by an independent director, and disclose: 3. the charter of the committee; 4. the members of the committee; and 5. as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or b) if it does not have a nomination committee, disclose that fact and the processes it employs to address board succession issues and to ensure that the board has the appropriate balance of skills, knowledge, experience, independence and diversity to enable it to discharge its duties and responsibilities effectively. 2.2 A listed entity should have and disclose a board skills matrix setting out the mix of skills and diversity that the board currently has or is looking to achieve in its membership. 2.3 A listed entity should disclose: a) the names of the directors considered by the board to be independent directors; b) if a director has an interest, position, association or relationship of the type described in Box 2.3 which appears on page 16 of the ASX Recommendations and is titled Factors relevant to assessing the independence of a director, but the board is of the opinion that it does not compromise the independence of the director, the nature of the interest, position, association or relationship in question and an explanation of why the board is of that opinion; and c) the length of service of each director. 2.4 A majority of the board of a listed entity should be independent directors The chair of the board of a listed entity should be an independent director and, in particular, should not be the same person as the chief executive officer of the entity. 2.6 A listed entity should have a program for inducting new directors and provide appropriate professional development opportunities for directors to develop and maintain the skills and knowledge needed to perform their role as directors effectively. Principle 3: Act ethically and responsibly 3.1 A listed entity should: a) have a code of conduct for its directors, senior executives and employees; and b) disclose that code or a summary of it. Principle 4: Safeguard integrity in corporate reporting 4.1 The board of a listed entity should: a) have an audit committee which: 1. has at least three members, all of whom are non-executive directors and a majority of whom are independent directors; and 2. is chaired by an independent director, who is not the chair of the board, and disclose: 3. the charter of the committee; 4. the relevant qualifications and experience of the members of the committee; and 5. in relation to each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or b) if it does not have an audit committee, disclose that fact and the processes it employs that independently verify and safeguard the integrity of its corporate reporting, including the processes for the appointment and removal of the external auditor and the rotation of the audit engagement partner and

18 WorleyParsons Corporate Governance Statement 2015 PRINCIPLES AND RECOMMENDATIONS SECTION 4.2 The board of a listed entity should, before it approves the entity s financial statements for a financial period, receive from its chief executive officer and chief financial officer a declaration that, in their opinion, the financial records of the entity have been properly maintained and that the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of the entity and that the opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively A listed entity that has an annual general meeting should ensure that its external auditor attends its annual general meeting and is available to answer questions from security holders relevant to the audit. Principle 5: Make timely and balanced disclosure 5.1 A listed entity should: a) have a written policy for complying with its continuous disclosure obligations under the Listing Rules; and b) disclose that policy or a summary of it. Principle 6: Respect the rights of security holders 6.1 A listed entity should provide information about itself and its governance to investors via its website A listed entity should design and implement an investor relations program to facilitate effective two-way communication with investors. 6.3 A listed entity should disclose the policies and processes it has in place to facilitate and encourage participation at meetings of security holders. 6.4 A listed entity should give security holders the option to receive communications from, and send communications to, the entity and its security registry electronically. Principle 7: Recognize and manage risk 7.1 The board of a listed entity should: a) have a committee or committees to oversee risk, each of which: 1. has at least three members, a majority of whom are independent directors; and 2. is chaired by an independent director, and disclose: 3. the charter of the committee; 4. the members of the committee; and 5. as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or b) if it does not have a risk committee or committees that satisfy a) above, disclose that fact and the processes it employs for overseeing the entity s risk management framework. 7.2 The board or a committee of the board should: a) review the entity s risk management framework at least annually to satisfy itself that it continues to be sound; and b) disclose, in relation to each reporting period, whether such a review has taken place. 7.3 A listed entity should disclose: a) if it has an internal audit function, how the function is structured and what role it performs; and b) if it does not have an internal audit function, that fact and the processes it employs for evaluating and continually improving the effectiveness of its risk management and internal control processes. 7.4 A listed entity should disclose whether it has any material exposure to economic, environmental and social sustainability risks and, if it does, how it manages or intends to manage those risks

19 WorleyParsons Corporate Governance Statement 2015 PRINCIPLES AND RECOMMENDATIONS SECTION Principle 8: Renumerate fairly and responsibly 8.1 The board of a listed entity should: a) have a remuneration committee which: 1. has at least three members, a majority of whom are independent directors; and 2. is chaired by an independent director, and disclose: 3. the charter of the committee; 4. the members of the committee; and 5. as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or b) if it does not have a remuneration committee, disclose that fact and the processes it employs for setting the level and composition of remuneration for directors and senior executives and ensuring that such remuneration is appropriate and not excessive. 8.2 A listed entity should separately disclose its policies and practices regarding the remuneration of non-executive directors and the remuneration of executive directors and other senior executives. 8.3 A listed entity which has an equity based remuneration scheme should: a) have a policy on whether participants are permitted to enter into transactions (whether through the use of derivatives or otherwise) which limit the economic risk of participating in the scheme; and b) disclose that policy or a summary of it The Group recognizes that responsible, sustainable corporate performance is essential to the long term success of its business and desirable to all of its stakeholders. The Group s Corporate Responsibility statement can be found on page 31 of the Company s Annual Report for the year ended 30 June 2015 (Annual Report). A copy of the Annual Report is available from the Company Reports page in the Investor Relations section of the Group s website ( PART 1 COMPOSITION AND GOVERNANCE POLICIES OF THE BOARD Relevant policies and charters (see InvestorRelations/Pages/CorporateGovernance.aspx) - Board Charter 1.1 COMPOSITION PRINCIPLES The Board s composition is determined in accordance with the following principles, the Company s Constitution and relevant governance requirements: the Board should comprise at least three members and maintain a majority of independent directors; the positions of Chairman and Chief Executive Officer (CEO) must be held by separate persons; the Chairman must always be a non-executive director; the Board should comprise directors with an appropriate range and mix of skills, knowledge, experience, independence and diversity; the performance of the Board, its Committees and its members should be reviewed annually and objectively; and all directors (except the CEO) must submit themselves for re-election at regular intervals, and at least every three years. 1.2 MEMBERSHIP The membership of the Board complies with the composition principles outlined above. The directors of the Company during the Reporting Period were: NAME John Grill Ron McNeilly Larry Benke Erich Fraunschiel John M Green Christopher Haynes Catherine Livingstone Wang Xiao Bin Andrew Wood POSITION Chairman and Non-Executive Director Deputy Chairman, Lead Independent Director and Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Chief Executive Officer and Executive Director All directors served as directors for the entire Reporting Period. Details of each director s qualifications, special responsibilities, skills, expertise and experience (including the period of office held by each director) are contained in the profiles set out on pages 49 and 50 of the Annual Report. While not a matter occurring during the Reporting Period, for the sake of completeness, it is noted that the Board appointed Mr Jagjeet Bindra as a director of the Company with effect from 1 July Details of Mr Bindra s qualifications, special responsibilities, skills, expertise and experience are set out in the profile on page 49 of the Annual Report. 5

20 WorleyParsons Corporate Governance Statement APPOINTMENT, INDUCTION AND TRAINING The Board s Nominations Committee sets and reviews the criteria for new director appointments having regard to the overall composition of the Board. In considering the nominations and appointments of directors, the Board seeks to ensure that its membership is such that each director: is a person of integrity who will observe the Group s Code of Conduct; has sufficient abilities and time available to perform their role effectively; brings an independent and questioning mind to their role; enhances the breadth and depth of skills and knowledge of the Board as a whole; and enhances the experience, independence and diversity of the Board as a whole. While recognizing that each director will not necessarily have experience in each of the following areas, the Board seeks to ensure that its membership includes an appropriate mix of directors with experience in engineering, relevant industry sectors, general management and finance. SKILLS AND EXPERIENCE (OUT OF 9 DIRECTORS) Leadership and Governance Leadership 9 Corporate Governance 8 Strategy 9 Operations Health and Safety 5 Engineering 4 Project Delivery 5 Sector Experience Hydrocarbons 6 Minerals, Metals & Chemicals 5 Infrastructure 4 Geographic Experience Asia Pacific 7 Latin America 3 North America 7 Sub-Saharan Africa 2 Europe/Middle East/North Africa 8 Finance and Risk Accounting 5 Finance 8 Acquisitions 9 Risk Management 9 People Human Resources 7 Remuneration 7 Technology Technology 4 A summary of the directors skills and experience as relevant to the Group is set out below and graphs depicting the diversity of the directors are set out on the following page. Each non-executive director receives a letter which formalizes their appointment and outlines the key terms and conditions of their appointment. The executive director (CEO) has a written position description and a service contract. Director induction and professional development processes are incorporated into the Board program. Directors are encouraged, and are given the opportunity, to broaden their knowledge of the Group s business by visiting offices in different locations and to remain abreast of developments impacting the business. During the Reporting Period, most non-executive directors conducted a safety-awareness visit to at least one of the Group s project sites and in total, 13 such non-executive director visits took place during the Reporting Period. Non-executive directors visited project sites in Australia, Canada and China. In addition, the CEO visited a total of seven project sites in Australia, Canada, China, South Africa and the United States during the Reporting Period. 1.4 DIRECTOR INDEPENDENCE The Board recognizes that, while various principles and factors are relevant in determining independence, true independence is a matter of judgment having regard to the particular circumstances. Accordingly, when the Board exercises its judgment in determining independence, it has regard to relationships between a director and the Group or between a director and third parties that may compromise the director s independence. The Nominations Committee monitors and undertakes an annual assessment of each non-executive director s independence. This assessment applies the ASX Recommendations, the Act and current corporate governance practice and adopts the definition of independence set out in the ASX Recommendations. The Board has considered the positions and relationships of each of the eight persons who were non-executive directors for the Reporting Period and has formed the view that seven of those eight persons were independent. The Board is of the opinion that therefore a majority of the Board was independent of the Group s management and was free of any interest that have affected its free and unfettered judgment during the Reporting Period. Mr John Grill Mr Grill was appointed Chairman of the Board on 1 March Mr Grill was CEO of the entity that ultimately became WorleyParsons Limited from 1971 and held the position of CEO until 23 October Mr Grill is also a substantial shareholder of the Company. Accordingly, Mr Grill is not regarded as independent. While ASX Recommendation 2.5 provides that the Chairman should be independent, the Board carefully assessed Mr Grill s appointment as Chairman and considered that there were a number of unique circumstances that made Mr Grill s appointment appropriate. Almost every one of the Group s global industry peers is chaired by a former chief executive officer demonstrating the ongoing importance of strong industry and customer relationships in the industries in which the Group operates. The Board wished to retain the benefit of Mr Grill s close relationships with major global customers and his extensive industry experience. The Board also considered the fact that Mr Grill is a substantial shareholder, which aligns his interests with those of all other shareholders. 6

21 WorleyParsons Corporate Governance Statement 2015 DIVERSITY OF DIRECTORS TERTIARY QUALIFICATIONS INDUSTRY EXPERIENCE Engineering Engineering/Science Commerce/Accounting Law Other Oil and Gas Finance Science and Technology Mining Manufacturing RESIDENCY GENDER Power Legal Services Australia Canada China Men Women United Kingdom Consistent with the ASX Recommendations, on Mr Grill s appointment as Chairman, the Board created the role of Lead Independent Director. Appointing a Lead Independent Director seeks to ensure that the views of independent directors are effectively raised and considered by the Board. The Lead Independent Director provides leadership and support to the other independent directors in relation to matters that uniquely concern them as independent directors. The Lead Independent Director also, together with the Chairman, ensures that conflicts of interest on the Board (whether actual or potential) are identified and managed appropriately. The Lead Independent Director calls and chairs at least four meetings of independent directors each calendar year (at which neither the Chairman nor members of senior management are present) for the purposes of discussing matters relevant to the Board s business and responsibilities. Six such meetings were held during the Reporting Period. Dr Christopher Haynes and Mr Erich Fraunschiel Dr Haynes, the Chairman of the Company s Health, Safety and Environment Committee, is a non-executive director of Woodside Petroleum Limited (Woodside), which is a customer of the Group. Mr Fraunschiel, the Chairman of the Company s Audit and Risk Committee, was also a non-executive director of Woodside, until 28 February The Board considers each of Dr Haynes and Mr Fraunschiel to be independent after applying the principles stated above, given the percentage of total revenue and total gross margin the Group earned from Woodside was less than 5% during the Reporting Period. In the Board s opinion, the judgment of each of Dr Haynes and Mr Fraunschiel is not impaired or conflicted even though Dr Haynes is, and Mr Fraunschiel was, a non-executive director of Woodside. The Board also notes that as a practical matter, both of those directors exercise independent judgment in the best interests of the Company without direction from Woodside and neither of them receives or received any remuneration other than director s fees from either the Company or Woodside. Mr Larry Benke Mr Benke was appointed a non-executive director on the day after resigning as an executive of the Group on 30 June However, the Board determined that from 1 July 2013, Mr Benke should be regarded as independent on the basis of: his relatively short period of employment with the Group prior to his appointment to the Board; the Board s assessment of the extent to which Mr Benke s previous employment with the Group has impacted on, or could be perceived to impact on, his independence; and the time that has elapsed since he ceased employment with the Group. Mr Ron McNeilly, Mr Erich Fraunschiel and Mr John M Green Mr McNeilly, Mr Fraunschiel and Mr Green have each been non-executive directors of the Company for more than 12 years. In addition, Mr Green was a member of the Company s Advisory Board for nine years before the Company listed. During the Reporting Period, the Board reviewed the independence of each of these directors and concluded that each director was independent. The Board has determined that each of these directors is free of any interest, position, association or relationship that might influence, or reasonably be perceived to influence, in a material respect, their capacity to bring independent judgment to bear on issues before the Board and to act in the best interests of the Company and its shareholders generally. In particular, the Board is of the view that, despite the number of years each has been a non-executive director and, in Mr Green s case, a member of the Company s Advisory Board, none of these directors has become so close 7