33 Corporate  Governance AGL’s approach to Corporate  Governance Principle 1: Lay solid foundations for  management and oversight New Directors 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). 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 appropriate, the termination of the  appointment of the external auditor; and 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. 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  February 2012. The major powers the Board has reserved  to itself are: The Board has established four  Committees. They are: Timetables for Board and Committee  meetings are agreed annually in advance. 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 undertake an induction  program which comprises: > 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  significant risks; > A program of meetings with members of  AGL’s Executive Team; and > A program of meetings with other AGL  employees responsible for areas such as  HSE, upstream gas operations, and  wholesale energy trading. > 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; > 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); > 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; > Approving the remuneration of the  CEO and 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  > 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.