Sustainable Development Governance
Our approach to governance and risk management processes sets out to ensure a precautionary approach is taken to achieving business outcomes. A broader discussion of our risk management approach is provided in section 5.6 of our Annual Report 2009 (PDF, 4MB).
Our approach to sustainable development governance comprises:
- a dedicated organisational structure and responsibilities
- a clear hierarchy of systems and documents
- a number of key management processes, central to integrating sustainability into our decision-making
- clear links between remuneration and HSEC performance.
It is characterised by the following key features:
The Group's peak sustainable development governance body is the Sustainability Committee, a subcommittee of the Board.
- The role and focus of the Sustainability Committee is discussed in section 5.5.4 of our Annual Report 2009. It meets as frequently as required, but not less than three times a year. In addition to the core membership, attendees to the Sustainability Committee meetings include the CEO, Group Executives with direct accountability for our Customer Sector Groups' (CSG) operations and the Vice President Health, Safety, Environment and Community.
The HSEC function provides advice and guidance directly to management, as well as through a series of networks across the business.
- A critical component of the HSEC governance function provided by Corporate is the HSEC audit program. This is specifically designed to assure management that all operations within the Group work within the requirements of our Charter, Sustainable Development Policy and HSEC Standards.
- The HSEC Leadership Team is the peak functional group and includes corporate representatives and HSEC functional heads from each CSG. The Team is chaired by the Vice President Health, Safety, Environment and Community and sets the direction for the HSEC function, identifies priority issues, measures HSEC performance and provides input to the HSEC Functional Business Plans.
Business line management has responsibility and accountability for HSEC performance.
While not a governance body, we use our Forum on Corporate Responsibility to seek input and insight from external experts.
- The Forum brings together representatives of our senior management team, the leaders of several key non-government organisations and community opinion leaders to discuss and debate social and environmental matters relevant to the Group.
- Forum members have an opportunity to provide advice and to challenge the views of our senior management on broad sustainable development issues of mutual interest. The Group is not bound by the advice of the Forum, and the Forum does not necessarily endorse the Group's decisions. The Forum provides a means for direct and open dialogue about issues of interest to the wider community.
- The Forum meets twice a year and is chaired by BHP Billiton's Chief Executive Officer.
For more information
The terms of reference for the Sustainability Committee can be found here. Our Code of Business Conduct can be found here.
The role, structure, composition and controls of the Board are detailed in section 5.3 of our Annual Report 2009 (PDF, 4MB). The Board represents the Group's shareholders and is accountable to them for creating and delivering value. To assist in ensuring alignment, BHP Billiton encourages shareholders to make their views known to the Board (see section 5.2 of our Annual Report 2009 for further details).
The roles and functions of other governance measures, notably our Risk and Audit Committee and Executive Management, are discussed in sections 5.5.1, 5.7 and 5.8 of our Annual Report 2009.
In addition to our governance mechanisms, BHP Billiton operates a remuneration policy that includes the application of demanding key performance indicators for both financial and non-financial measures of performance. This latter category includes performance measures aligned to health, safety, environment and community factors. The remuneration and incentive scheme for our Group executives are detailed in section 6.3 of our Annual Report 2009.
Incident Reporting Governance
Our HSEC Consequence Severity Table sets out the BHP Billiton HSEC consequence severity outcomes. This must be used by reporting entities to determine whether an incident should be reported as a significant incident.
In most cases, the potential severity of an incident will be higher than its actual severity. Hence the categorisation of an incident as significant or not will usually be driven by its potential severity.
