Composition of the Audit Committee
The composition of the Audit Committee complies with the recommendations of the ASX Corporate Governance Council, including that it be composed of a majority of independent directors and be chaired by an independent director. However, some governance bodies would prefer that the Audit Committee be composed of independent directors only. It is the Board’s view that the current composition of the Audit Committee is appropriate, particularly bearing in mind Board size and membership.
Importantly, various measures are in place to ensure that the Audit Committee operates in the best interests of shareholders and financial markets. These measures include the attendance of the Chairman of the Board, who is an independent director, the external auditor and the internal audit manager at Audit Committee meetings. Further, the Chairman of the Audit Committee meets with the external auditor and the internal audit manager separately prior to each Audit Committee meeting. The Chairman of the Audit Committee also reports to the Board after each Audit Committee meeting on the matters considered by the Audit Committee and minutes of Audit Committee meetings are included in the next set of Board papers. Finally, any director who is not a member of the Audit Committee is able to attend any Audit Committee meeting and receives a copy of the agenda prior to each Audit Committee meeting.
Caltex believes that having a director who is an executive of Chevron as a member of the Audit Committee is advantageous in that this person is able to bring extensive knowledge of the petroleum industry to the Committee’s deliberations. In the case of the current membership of the Audit Committee, that person also has significant financial expertise.