Woodside Petroleum : 17.02.2016 2015 Corporate Governance Statement

504c3e92-8c9a-4f79-a038-4bee43b8cd22.pdf

CORPORATE GOVERNANCE STATEMENT

2015

OUR 2015 ANNUAL REPORT

Our world-class Karratha Gas Plant increased average annual production capacity from 16.3 to

16.7 million tonnes of

OUR 2015 SUSTAINABLE DEVELOPMENT REPORT

SUSTAINABLE DEVELOPMENT REPORT 2015

This report is a summary of Woodside's sustainability approach, actions and performance for the 12-month period

ANNUAL REPORT 2015

Strength through resilience

LNG following system

improvements and

ending 31 December

2015.

debottlenecking. ADDITIONAL INFORMATION

In this report, we have indicated where

additional information is available online

Further information at woodside.com.au

This report will be available in March 2016.

and in other sections of this report like this .

ii WOODSIDE PETROLEUM LTD

1. Corporate governance at Woodside

   Woodside is committed to a high level of corporate governance and fostering a culture that values ethical behaviour, integrity and respect. We believe that

   adopting and operating in accordance with high standards of corporate governance

   is essential for sustainable long-term

   Woodside's corporate governance model is illustrated below. The Woodside Management System (WMS) sets out how Woodside provides management governance and assurance. It defines how Woodside will deliver its business

   objectives and the boundaries within which Woodside employees and contractors are expected to work. The WMS establishes

   A checklist cross-referencing the ASXCGC Recommendations to the relevant sections of this Statement and the 2015 Remuneration Report is provided on pages

   14 to 15.

   Information on Woodside's governance framework is also provided in the Governance and Compliance section of Woodside's website.

   performance and value creation.

   a common approach to how we operate,

   
   

   This Statement reports on Woodside's key governance principles and practices. These principles and practices are reviewed regularly and revised as appropriate to reflect changes in law and developments in corporate governance.

   Woodside's Compass is core to our governance framework. It sets out our mission, vision and strategic direction and core values of integrity, respect, working sustainably, working together, discipline and excellence. It's the overarching guide for everyone who works for Woodside.

   wherever the location.

   The company, as a listed entity, must comply with the Corporations Act 2001 (Cth), the ASX Listing Rules, and other Australian and international laws. The ASX Listing Rules require the company to report on the extent to which it has followed the Corporate Governance Recommendations contained in the ASX Corporate Governance Council's third edition of its Corporate Governance Principles and Recommendations

   (ASXCGC Recommendations). Throughout the year, Woodside complied with all the ASXCGC Recommendations.

   The website contains copies of Board and committee charters and copies of many of the policies and documents mentioned in this Statement. The website is updated regularly to ensure it reflects Woodside's most current corporate governance information.

   
   

   
   

   Shareholders

   
   

   Delegation

   Board

   
   

   
   

   Audit & Risk Committee

   
   

   Accountability

   Human Resources

   & Compensation Committee

   
   

   Chief Executive Officer

   
   

   Nominations Committee

   
   

   Sustainability Committee

   
   

   
   

   Independent Assurance

   
   

   Management Governance and Assurance

   
   

   
   

   External Auditors

   
   

   Strategy

   Authorities Framework

   Risk Management

   Operating Structure

   Mission Vision Values Policies

   
   

   Internal Audit

   Management Standards

   
   

   
   

   Major Project Assurance Checks

   
   

   Management Review and Improvement

   Management Committees

   Operating Standards

   
   

   Woodside Management System

   
   

   CORPORATE GOVERNANCE STATEMENT 2015 1

2. Board of directors

3. Board role and responsibilities

   The Constitution provides that the business and affairs of the company are to be managed by or under the direction of the Board. The Board has approved

   a formal Board Charter which details the Board's role, powers, duties and functions. Other than as specifically reserved to the Board in the Board

   Charter, responsibility for the management of Woodside's business activities is delegated to the Chief Executive Officer (CEO) who is accountable to the Board.

   The Board Charter and the delegation of Board authority to the CEO are reviewed regularly.

   The central role of the Board is to set the company's strategic direction, to select and appoint a CEO and to oversee the company's management and business activities.

   In addition to matters required by law to be approved by the Board, the following powers are reserved to the Board for decision:

   • the appointment and removal of the CEO, any other executive directors and the Company Secretary and

     determination of their remuneration and conditions of service;

   • approving senior management succession plans and significant changes to organisational structure;

   • authorising the issue of shares, options, equity instruments or other securities;

   • authorising borrowings, other than in the ordinary course of business, and the granting of security over the

     undertakings of the company or any of its assets;

   • authorising expenditures which exceed the CEO's delegated authority levels;

   • approving strategic plans and budgets;

   • approving the acquisition, establishment, disposal or cessation of any significant business of the company;

   • approving dividends;

   • approving annual and half-year reports and disclosures to the market that contain or relate to financial projections, statements as to future financial performance or changes to the policy or strategy of the company;

   • approving policies of company-wide or general application;

   • appointing the Chairman of the Board;

   • appointing directors who will come before shareholders for election at the next annual general meeting (AGM); and

   • establishing procedures which ensure that the Board is in a position to exercise its powers and to discharge its responsibilities as set out in the Board

     Charter.

     A copy of the Board Charter is available in the Governance and Compliance section of Woodside's website.

     
     

4. Board composition

The Board is comprised of eight non- executive directors and the CEO. Details of the directors, including their qualifications, experience, date of appointment and independent status, are set out in

Table 1. Detailed biographies are available in the 2015 Annual Report on pages

48 and 49.

The Board and its committees actively seek to ensure that the Board continues to have the right balance of skills, knowledge, experience and diversity necessary to direct the company in accordance with high standards of corporate governance.

In assessing the composition of the Board,

the directors have regard to the following principles:

• the Chairman should be non-executive and independent;

• the role of the Chairman and the CEO should not be filled by the same person;

• the CEO should be a full-time employee of the company;

• the majority of the Board should comprise directors who are both non-executive and independent;

• the Board should represent a broad range of qualifications, diversity, experience and expertise considered of benefit to the company; and

• the number of Shell-nominated directors, as a proportion of the Board, should normally be in the proportion that Shell's holding of fully paid ordinary shares in the company bears to all of the issued fully paid ordinary shares in the company.

The directors on the Board collectively have a combination of skills and experience in the competencies set out in Table 2.

These competencies are set out in the skills matrix that the Board uses to assess the skills and experience of each director and the combined capabilities of the Board.

Section 2.6 on Board succession planning provides further information on the mix

of skills and diversity the Board seeks to achieve in membership of the Board.

The Board considers that collectively the directors have the range of skills, knowledge and experience necessary to direct the company. The non-executive directors contribute operational and

international experience, an understanding of the industry in which Woodside operates, knowledge of financial markets and an understanding of the health, safety,




Table 1 - Details of directors

Name of director Term in office Qualifications Status (Independent

or Executive)

M Chaney (Chairman) Director since November 2005

Chairman since July 2007

BSc, MBA, Hon LLD (UWA), FAICD Independent

P Coleman (CEO and Managing Director)

Director since May 2011 BEng, MBA, FATSE Executive

M Cilento Director since December 2008 BA, BEc (Hons), MEc Independent F Cooper Director since February 2013 BCom, FCA Independent C Haynes Director since June 2011 FREng, CEng, FIMechE Independent A Jamieson Director since February 2005 FREng, CEng, FInstChemE Independent D McEvoy Director since September 2005 BSc (Physics), Grad Dip (Geophysics) Independent

S Ryan Director since December 2012 PhD (Petroleum and Geophysics), BSc

(Geophysics) (Hons 1), BSc (Geology)

Independent

G Tilbrook Director since December 2014 BSc, MBA Independent










2 WOODSIDE PETROLEUM LTD