34 Corporate  Governance Delegation to the CEO and the  Executive Team Principle 2: Structure the Board to  add value The Board has delegated to the CEO and  the Executive Team responsibility for  implementing AGL’s strategic direction and  for managing AGL’s day-to-day operations.  Specific limits on the authority delegated  to the CEO and the Executive Team are set  out in the Delegated Authorities approved  by the Board. The authorities delegated to  the CEO and the Executive Team cover a  range of matters including sales contracts,  operating expenditure, capital expenditure,  employment contracts, billing adjustments  and debt write-offs, and communications  with media and shareholders. Executive Team The Executive Team comprises the CEO  and eight senior managers (Executives)  who report directly to the CEO. AGL’s Constitution provides for a minimum  of three directors and a maximum of ten.  As at 30 June 2012, the Board comprised  seven non-executive Directors and one  executive Director. The executive Director  is AGL’s CEO, Michael Fraser.  A Board comprising eight Directors provides  a sufficient diversity of skills and experience  appropriate to, and a sufficient capacity  to manage the workload demands of, a  company of AGL’s size and complexity,  whilst allowing effective and efficient  decision making as a Board. There was no change during the year to the  composition of the Board. Subsequent to  the end of the financial year, AGL announced  that Mr Graeme Hunt would join the Board  as a non-executive Director with effect  from 1 September 2012 and that Mr  Max Ould intended to retire as a Director at  the conclusion of the 2012 Annual General  Meeting. Each Executive is employed under a Service  Agreement which sets out the terms on  which the Executive is employed including  details of the Executive’s duties and  responsibilities, rights, and remuneration  entitlements. The Service Agreement also  sets out the circumstances in which the  employment of the Executive may be  terminated by either AGL or the Executive,  including details of the notice periods  required to be given by either party, and  the amounts payable to the Executive as a  consequence of the termination by AGL of  the Executive’s employment. With one exception, all AGL Executives are  employed on an indefinitely continuing  basis. AGL’s Chief Information Officer is  employed under a Service Agreement  which stipulates that his employment with  AGL will cease on 30 June 2013 unless  extended by agreement between him  and AGL. The Directors of AGL at any time during  the financial year are listed with a brief  description of their qualifications,  experience and special responsibilities on  pages 42 and 43 of this Annual Report. The Board met 16 times during the  financial year. Director’s attendances are  set out on page 44 of this Annual Report. AGL considers a Director to be independent  if the Director is independent of  management and free of any business or  other relationship that could materially  interfere, or be perceived as interfering,  with the exercise of an unfettered and  independent judgement in relation to  matters concerning AGL. Executive Team performance evaluations  have been conducted for the financial year  ending 30 June 2012. Details of the  evaluation process and the linkages  between the result of performance  evaluations and remuneration are disclosed  in the Remuneration Report commencing  on page 48 of this Annual Report. In assessing independence, the Board  reviews the relationship that the Director,  and the Director’s associates, have with  AGL. In determining whether a Director is  independent, the Board has considered  whether the Director: > is a substantial shareholder of AGL or  an officer of, or otherwise associated  directly with, a substantial shareholder  of AGL; > within the last three years, has been  employed in an executive capacity  by AGL or any of its related bodies  corporate; > within the last three years, has been  a principal of a material professional  adviser or a material consultant to AGL  or any of AGL’s related bodies corporate; > is a material supplier to, or customer  of, AGL or any of AGL’s related bodies  corporate, or an officer of or otherwise  associated directly or indirectly with a  material supplier or customer; > has a material contractual relationship  with AGL; or > has any interest, or any business or  other relationship which could, or could  reasonably be perceived to, materially  interfere with the Director’s ability to act  in AGL’s best interests. The Board regularly assesses the  independence of non-executive Directors in  accordance with the above criteria. The Board  has determined that each non-executive  Director is, and was throughout the entirety  of the financial year, independent. During the financial year, there were no  circumstances in which individual Directors  found it necessary to excuse themselves  from consideration by the Board of specific  matters because of the potential for  independence to be compromised. No Director has received or become  entitled to receive a benefit because of a  contract between any company in the AGL  Group and the Director, or a firm in which  the Director is a substantial member, or an  entity in which the Director has a  substantial financial interest, other than: > in the case of non-executive Directors,  remuneration as disclosed in the Annual  Report which includes participation in  the shareholder approved AGL Share  Purchase Plan; and > in the case of the CEO, a contract of  employment and entitlements under  AGL’s Long-Term Incentive Plan. Recommendation 1.2  – Companies should  disclose the process for evaluating the  performance of the Executive Team Recommendation 2.1  – The majority of  the Board should be independent Directors