33 Corporate  Governance AGL’s approach to Corporate  Governance Principle 1: Lay solid foundations for  management and oversight Role of the AGL Board (‘the Board’) Recommendation 1.1  – Companies should  establish the functions reserved to the  Board and those delegated to the  Executive Team The Board is responsible for the governance  of AGL. The role of the Board is to provide  overall strategic guidance and effective  oversight of management. The Board  derives its authority to act from AGL’s  Constitution. This Statement explains how AGL addresses  the ASX Corporate Governance Council’s,  ‘Corporate Governance Principles and  Recommendations – 2nd Edition’ (referred  to as either ASX Principles or  Recommendations) issued in 2007, and  amended in 2010. The major powers the Board has reserved  to itself are: The Board’s responsibilities are set out in  a formal Charter which the Board reviews  every two years. The Charter was most  recently reviewed and amended in  June 2010. > reviewing and approving AGL’s strategic  plans and performance objectives; > selecting, appointing and monitoring the  performance of the Chief Executive  Officer (CEO) and, if appropriate,  terminating the appointment of the CEO; > monitoring the performance of, and  approving the remuneration policies and  procedures applying to, the Executive  Team; > monitoring the timeliness and  effectiveness of reporting to  shareholders; > approving and monitoring policies  governing AGL’s relationship with other  stakeholders and the broader  community, including policies in relation  to environmental management and  occupational health and safety; > monitoring compliance with legislative  and regulatory requirements (including  continuous disclosure) and ethical  standards, including reviewing and  ratifying codes of conduct and  compliance systems; > monitoring financial outcomes and the  integrity of reporting, and in particular,  approving annual budgets and longer– term strategic and business plans; > approving decisions affecting AGL’s  capital, including determining AGL’s  dividend policy and declaring dividends; > reviewing and recommending to  shareholders the appointment or, if  appropriate, the termination of the  appointment of the external auditor; and > A program of meetings with other AGL  employees responsible for areas such as  Health, Safety and Environment (HSE),  upstream gas operations, and wholesale  energy trading. > A program of meetings with members of  AGL’s Executive Team; and > An information pack which includes a  copy of AGL’s Constitution; Board and  Committee Charters; most recent  Annual Report; most recent Appendix  4D or 4E and market results  presentation; most recent monthly  Group Performance Report; AGL  strategic plan; organisational chart;  Deed of Access, Insurance and  Indemnity and details of AGL’s Directors  and Officers insurance policy; and a  copy of the register of AGL’s most  signifi cant risks; New Directors undertake an induction  program which comprises: > AGL’s financial, strategic, and operational  risk management position. > the roles and responsibilities of the  Executive Team; and > the role of Board Committees; > the rights, duties and responsibilities of  Directors; New Directors receive a formal letter of  appointment and an induction pack. The  appointment letter and induction pack  contain sufficient information to allow the  new Director to gain an understanding of: New Directors Timetables for Board and Committee  meetings are agreed annually in advance. The main accomplishments of each of the  Board Committees during 2011 are  included in the commentary on Principle 2. > People and Performance Committee  (see Principle 8). > Audit and Risk Management Committee  (see Principle 4); and > Safety, Sustainability and Corporate  Responsibility Committee (see Principle 3); > Nominations Committee (see Principle 2) The Board has established four  Committees. They are: > monitoring the effectiveness of AGL’s  audit, risk management and compliance  systems that are in place to protect AGL’s  assets and to minimise the possibility of  AGL operating beyond acceptable  risk parameters.