transurban / sustainability report 2009

At a glance

Economy

Supplier network

Capabilities

Values

Our assets

Awards and
achievements

Governance

Political contributions

Governance

Transurban is committed to maintaining a high standard of corporate
governance.

We believe that in FY09 our corporate governance framework and main governance practices complied with the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations.

The Board is accountable to security holders for the performance of the Transurban Group. The day to day management of the business is the responsibility of the CEO and the Executive Committee, subject to specific delegations of authority approved by the Board.

In FY09, the Board had four standing committees to support its work and to allow detailed consideration of complex issues: the Audit and Risk Committee (formed in 2009 when the Audit Committee and Risk Committee were combined), the Sustainability Committee, the Nomination Committee and the Remuneration Committee.

Each Committee operates under a charter which sets out its authority, membership and responsibilities.

More information on Transurban's corporate governance practices, including related charters and policies, is available in the corporate governance section of our website.

Ethical decision making

All employees are covered by the Transurban Code of Conduct, which outlines their responsibilities in adhering to the principles that underpin our corporate culture. Complying with the Code is a condition of employment. Employees are expected to understand and accept personal responsibility to preserve and enhance Transurban's reputation for honesty and integrity.

Compliance with applicable laws, regulations and policies that govern our business is expected from all employees. In support of this, the company has adopted a zero tolerance policy towards breaches of the law and the Code of Conduct.

Any suggestion or allegation of impropriety or breach of the Code is acknowledged and dealt with in accordance with our Performance Management Procedure. Possible outcomes include official warnings, and, in some cases, termination of employment.

We also have the following employee grievance procedures and processes:

whistleblower policy
workplace grievance procedure
HR Department for resolving complaints
employment policies readily available
independent employee and family assistance, and
employee career development process.

In FY09, six breaches of the Code of Conduct were formally reported and investigated in accordance with policies. These breaches related to fraud, theft of Transurban property, inappropriate workplace behaviour and breach of IT policy.

Whistleblower Policy

A new Whistleblower Policy was introduced in FY09 as part of our commitment to good corporate governance.

It provides a confidential avenue for reporting misconduct within the company and describes the protections offered to anyone making a report under the policy. It applies to Transurban's employees, contractors, consultants, or suppliers of goods or services and their employees. A separate policy applies to our employees in the US.

The Whistleblower Policy is intended for use where existing reporting avenues for raising issues of concern (such as talking to the relevant manager) appear to have failed or may be inappropriate.

Risk management

Managing risks is an essential part of our business. Key risks are regularly reviewed by the Board, Executive Committee, and the Audit and Risk Committee.

Transurban also has a business-wide risk framework in place to ensure a consistent and rigorous approach to identifying, analysing and evaluating risks. This framework has various policies, procedures and guidelines including the Risk Management Policy.

The framework is overseen by the Audit and Risk Committee and actively managed by the Executive Committee. It is consistent with the Australian/New Zealand Standard for Risk Management AS/NZS 4360:2004 and is subject to regular review by internal audit. Our Audit and Risk Committee Charter is available on our website.

In FY09 there was a renewed focus on embedding risk management into the business through the development of a strategic plan.

The plan focused on upgrading our internal risk management information system and appointing risk management facilitators in all business units. More than 170 employees were trained on Transurban's risk management methodology.

Risk management facilitators were required to review and activate more than 50 risk registers from across the business.

In FY10, we will conduct a review of our risk management standards and procedures, and continue to enhance risk reporting.

Investment review

In FY09, Transurban strengthened its investment review process.

This process now includes a uniform method for approving, reviewing and monitoring expenditure on project development, investment and capital on existing assets.

The Investment Review Committee consists of the Chief Financial Officer, Company Secretary, Chief Operating Officer, and either the Group General Manager Strategy and Corporate Development or President North America (depending on the proposal under consideration).

The Committee's approval must be obtained at the concept stage, at the end of the feasibility stage and immediately prior to capital commitment before investments can occur.

Transurban Infrastructure Governance Framework

We are continuing to roll out a framework to ensure a standardised approach to infrastructure management across the business.

The Transurban Infrastructure Governance Framework provides comprehensive guidelines on the various aspects of managing our road assets and related services.

These include 13 chapters on best practice in issues such as emergency management, environment and sustainability, safety, operations and maintenance, procurement and contracts, business continuity, and risk management.

The framework is being developed and introduced to our different assets in stages. In FY09, four elements were delivered on CityLink, Hills M2 and Eastern Distributor. In FY10, we expect to complete the roll out on these roads supported by a comprehensive infrastructure management training package.

Sustainability governance

Transurban has a Sustainability Committee to assist the Board in fulfilling its governance responsibilities for strategic oversight of our sustainability
objectives.

In FY09, we reviewed the Committee's role and structure to ensure it continues to reflect and respond to the progress the business has made in sustainability during the past six years.

As a result, the Committee was restructured and its new charter sets out its authority, membership and responsibilities.

The new Committee comprises four non-executive Directors: David Ryan (Chair), Lindsay Maxsted, Bob Edgar and Rodney Slater.

A new sustainability framework

Sustainability is one of the key drivers of Transurban's business management framework. We now have a business-wide Sustainability Framework in place to reflect this. The framework, approved by the Transurban Board in December 2008, gives our management and employees a clear articulation of:

the definition of sustainability for Transurban
the business case for sustainability at Transurban
our sustainability aspirations, and
our fundamental business-wide sustainability commitments.

The framework helps inform our annual sustainability priorities, and it is the foundation for specific sustainability action plans developed by teams across our business. Each of these teams is responsible for developing and delivering its own plan, which helps to embed a culture of sustainability within Transurban.

The in-house sustainability team provides strategic advice to the business, delivers sustainability programs and reports on progress.