## Principle 3: Promote ethical and responsible decision making 

Ethical decision making is integral to the conduct of AGL’s business. The Safety, Sustainability and Corporate Responsibility Committee assists the Board in enabling AGL to operate its businesses ethically, responsibly and sustainably. 

The Committee currently comprises three non–executive and independent Directors, Sandra McPhee (Chair), Bruce Phillips and Les Hosking. The Committee has a formal Charter that was most recently reviewed in June 2010. A copy of that Charter is available on AGL’s website. 

The Committee oversees and reviews: 

> AGL’s actions to meet its obligation to maintain the health and safety of its people; 

> the social, environmental and ethical impact of AGL’s policies and practices; 

> initiatives to enhance AGL’s sustainable business practices and reputation as a responsible corporate citizen; 

> integration of safety, sustainability and corporate responsibility in the formulation of AGL’s corporate strategy, risk management framework, and people and culture priorities; and 

> AGL’s compliance with all relevant legal obligations on the matters within its responsibilities. 

The Committee holds as many meetings as practical at AGL business unit locations. It met four times during the year with the meetings held at AGL’s call centre in Adelaide; the construction site for the Oaklands Hill wind farm; Mount Beauty in Victoria near AGL’s hydro generation assets; and in the Hunter Valley near AGL’s coal seam gas exploration activities. 

## Recommendation 3.1 – Companies should establish a Code of Conduct 

AGL has a Code of Conduct that applies to AGL and its Directors, employees and contractors (all of which are referred to as “employees” in the Code). 

The Code of Conduct sets out a number of overarching principles of ethical behaviour and explains: 

> the obligations of AGL to put in place mechanisms to assist all employees to act in accordance with these principles; and 

> how AGL employees should act consistently with these principles. 

The ethical principles are set out under the following headings: 

Acting honestly and with integrity Observing the law Valuing and maintaining professionalism Respecting confidentiality Managing conflicts of interest Looking after our employees Looking after the community 

Training about the Code of Conduct is part of the induction process for new AGL employees. 

The Code of Conduct provides a mechanism to enable employees to report actual or suspected breaches, including an independently monitored Ethics Line telephone and email service to allow for anonymous reporting. An Ethics Panel oversees the application of the Code of Conduct in AGL, including investigating alleged breaches of the Code, monitoring compliance and recommending amendments to the Board. The Ethics Panel comprises the Company Secretary, Group Head of People and Culture, the Head of Legal, the Head of Group Audit, and Ms Susan Cunningham – an independent person who has expertise in managing employee grievances. The Ethics Panel met four times during the year. 

During the year, the Ethics Panel investigated two alleged breaches of the Code of Conduct. One investigation found there had been a breach of the Code of Conduct by an AGL employee. The employee was subsequently given a formal written warning about his behaviour. 

AGL’s Code of Conduct is available on AGL’s website. 

## Compliance Policy 

AGL is committed to the highest standards of integrity, fairness and ethical conduct, including full compliance with all relevant legal requirements. There is no circumstance under which it is acceptable for AGL or a person associated with AGL to knowingly or deliberately not comply with the law or to act unethically in the course of performing or advancing AGL’s business. 

Behaviour of this kind will lead to disciplinary measures that may include dismissal. 

AGL’s Compliance Policy sets out responsibilities for compliance with AGL’s various legislative and contractual obligations. This Policy was reviewed and amended during the year. The Policy is published on AGL’s website. 

## Recommendation 3.2 – Companies should establish a policy concerning diversity 

During the year, AGL adopted a new Diversity and Inclusion Policy which describes AGL’s approach to diversity and inclusion and how these attributes are to be embedded in AGL workplaces. The Policy includes specific provisions regarding gender diversity and the positive correlation between increased representation of women on company boards and in senior management positions and the achievement of better financial performance, higher employee retention rates, and enhanced corporate image and reputation. The Policy is published on AGL’s website. 

AGL has established a Diversity & Inclusion Council to support the achievement of a diverse workforce and an inclusive workplace culture. The Council is chaired by Michael Fraser, AGL’s CEO, and comprises eight other members drawn from senior leaders across AGL’s business. Five of the members are women. 

##  Recommendation 3.3 – Companies should disclose the measurable objectives for achieving gender diversity and progress toward achieving those objectives 

During the year, the Board established measurable objectives for achieving gender diversity. The objectives focus on establishing the foundations, policies and practices to underpin an inclusive workplace culture that supports gender diversity. These objectives align with the diversity focus areas established by the Diversity & Inclusion Council: building AGL’s inclusive workplace culture; flexible working arrangements; carer’s needs; and women in the workplace. 

The objectives, and progress made toward achieving them, are set out below. 

1  AGL will continue to build a culture of inclusion that will support all employees to contribute and achieve their potential. By June 2012, AGL will deliver face–to– face diversity and inclusion training to AGL leaders. 

## Progress to date 

A new, customised workshop for leaders has been developed and successfully piloted. It builds on traditional anti– discrimination and harassment compliance training to cover concepts of diversity, inclusion and bias; how these play out in the workplace; and how to manage issues when they arise. Leaders across AGL will attend the workshops during FY2012. 

