Ethical approach at Telstra

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Telstra3(1)By Damien Coleman – Company Secretary of Telstra Corporation Limited

 

 

 

 

 

We are honoured to have received the 2015 Ethical Boardroom Best Corporate Governance Award for the Telecoms market. Telstra is Australia’s leading telecommunications company, offering a full range of communications services and competing in all telecom markets.

In Australia we provide more than 16.7 million retail mobile services, 7.3 million fixed voice services and 3.1 million retail fixed broadband services. We also have an international presence spanning 20 countries, including a growing presence in Asia.

We work to create a profitable business that cares for customers and provides quality products and services to the market. We are also looking to the future, pursuing new ideas to serve our customers’ needs in the dynamic and changing markets of the future. Telstra’s purpose is to create a brilliant connected future for everyone and our strategy has three key priorities: improving customer advocacy, driving value from the core of our business and building new growth businesses.

Governance at Telstra

We are committed to excellence in corporate governance, transparency and accountability. This is essential for the long-term performance and sustainability of our company and to protect and enhance the interests of our shareholders and other stakeholders.

Our governance framework plays an integral role in supporting our business and helping us deliver on our strategy. It provides the structure through which our strategy and business objectives are set, our performance is monitored and the risks we face are managed. It includes a clear framework for decision-making and accountability across our business and provides guidance on the standards of behaviour we expect of each other.

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We regularly review our governance arrangements to reflect developments in market practice, expectations and regulation as appropriate. We comply with the third edition of the Australian Securities Exchange Corporate Governance Council’s Corporate Governance Principles and Recommendations, which is reflected in our 2015 Corporate Governance Statement that can be found at Telstra Governance.

We value a direct, two-way dialogue with our shareholders and investors about our company. We believe in providing relevant information as quickly and efficiently as possible (recognising the importance of meeting our continuous disclosure and other legal obligations to the market), as well as listening to and understanding their perspectives and responding to their feedback.

We have a number of initiatives in place to promote effective shareholder communication and engagement, such as:

■              Holding retail shareholder information briefings across Australia

■              Encouraging questions in advance of our AGM to understand shareholder issues and address key areas of feedback

■              Holding regular investor briefings to provide investors with insights into our business

■              Webcasting important company events, such as our financial results briefings, our AGM and other investor events

The board

The board actively seeks to ensure it has an appropriate mix of diversity, skills, experience and expertise to enable it to discharge its responsibilities effectively and to be well-equipped to help our company navigate the range of opportunities and challenges we face.

The board has identified the set of skills, experience and expertise it currently has and is looking to achieve in its membership, reflecting areas particularly relevant to the three pillars of our strategy, as well as other areas of general relevance to the composition of our board. The board reviews this on a regular basis and it helps the board identify areas of focus and to maintain an appropriate and diverse mix in its membership.

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For FY15, the board’s measurable objective on board diversity was that there would be at least three women on the board, representing a female gender representation among non-executive directors of at least 30 per cent. As at 30 June 2015, there were three female directors on the board (including the chairman of the board and chairman of the audit & risk committee) achieving this objective.  For FY16, the board has maintained its diversity objective, with an additional aspiration to achieve 40 per cent female representation among non-executive directors by 2020.

The board has an established board cycle, which provides a high level overview of items to be considered over a 12-month period. Its key purpose is to link the board programme with strategic and operational priorities and to ensure the board devotes appropriate time to consideration of the various dimensions of our business across the cycle.

The board has three standing committees – the audit & risk committee, the remuneration committee and the nomination committee. Together they play a significant role by focusing in more detail on specific areas of our operations and governance framework, which assists in strengthening the board’s oversight of Telstra.

Managing our risks

Understanding and managing our risks is part of how we work. It helps us meet our business objectives and our legal and regulatory obligations. It also helps us make better decisions and act ethically in the best interests of Telstra and our shareholders.

We have a risk management framework in place that provides the foundations and organisational arrangements for how we manage risks across Telstra. The framework aligns with ISO 31000:2009, the International Standard for risk management and consists of a set of components for designing, implementing, monitoring, reviewing and continually improving risk management at Telstra. The framework is designed, implemented and reviewed via our ‘three lines of defence’ accountability model involving business and operational management, the chief risk office and the group internal audit function.

 

“Telstra Values, together with our Telstra Group Code of Conduct and policy framework, define the standards of behaviour we expect of each other”

 

One of the core components of our framework is the risk management process, which provides the business with a process for assessing our risks. Through this risk management process, we identify, monitor and report on risks to the achievement of our plans and objectives, including our material business risks and principal risk exposures.

Our material business risks, which are strategic in nature and can have a material impact on the achievement of our strategic growth objectives and future financial prospects, are monitored for changes in their exposure and are reported to the board during the course of the financial year, along with their related controls and treatment plans. Our principal risk exposures, which are operational in nature, are monitored and reported to our management risk committee and the audit & risk committee. 

The Telstra Management Risk Committee is an internal forum and is Telstra’s peak management governance committee for risk management across the Telstra Group. It is responsible for giving senior management more detailed and timely insight and understanding of Telstra’s key risks and controls. The Management risk Committee is a forum to assist the CEO, supported by the CEO Leadership Team, to ensure that Telstra management implements an effective risk management and internal control framework to identify, manage and monitor Telstra’s risks. It is also a form for the review and consideration of risk management responsibilities and for the review of management reports for the Board and Audit & Risk Committee. The Management Risk Committee comprises all members of the Telstra CEO Leadership Team, with representation from the Chief Risk Officer and the Director Group Internal Audit.

Also core to our framework are the activities we undertake to monitor and review its design and implementation. We conduct reviews and self-assessments of our framework across  the enterprise and report the results to our management risk committee and the audit & risk committee.

Acting ethically and responsibly

Our purpose is to create a brilliant connected future for everyone. Our Telstra Values, together with our Telstra Group Code of Conduct and policy framework, define the standards of behaviour we expect of each other as we deliver on our purpose and achieve our strategy.

Our five Telstra Values express what we stand for and are core to our business. As a values-led organisation, our values shape our people’s decisions and actions. They guide how we work together. We align everything we do with them.

Our code of conduct and policy framework underpin our Telstra Values. Together they set out, in more detail, the standards of behaviour we expect of our people. They define our commitment to good corporate governance, responsible business practice, our customers, our workforce, the communities in which we operate and the environment. They also provide the structure through which we maintain compliance with our legal obligations.

Our governance framework includes elements that address key areas, such as health and  safety, diversity, discrimination and bullying, sustainability, privacy, anti-bribery and anti-corruption, conflicts of interest, whistleblowing, securities trading market disclosure and social media. These are central to how we promote good governance, and ethical and responsible behaviour.

Looking ahead

Our vision is to make Telstra a world-class technology company that empowers people to connect. We remain committed to implementing our strategy, to improve advocacy among our customers, to drive value from the core of our business and to invest in and build new growth businesses. Our governance framework will continue to play a vital role in supporting our business and helping us deliver on this strategy.

 

About The Author:

Damien Coleman was appointed Company Secretary of Telstra Corporation Limited effective 1 January 2012. Mr Coleman joined Telstra in 1998 and has served in senior legal roles across the company, including in Sensis, Mergers and Acquisitions and Telstra Operations.

Most recently, he was General Counsel, Finance and Administration, Office of the Company Secretary and National Broadband Network (NBN). In that role he was responsible for Telstra’s continuous disclosure compliance and all legal aspects of the Annual Report preparation and Annual General Meeting, as well as annual financial results announcements. Mr Coleman also played a key role in the negotiation of the Definitive Agreements for Telstra’s participation in the rollout of the NBN.

Before joining Telstra, Mr Coleman was a senior lawyer at a leading Australian law firm. He holds a Bachelor of Economics and a Bachelor of Laws (Hons) from the Australian National University.