Under AGL’s Board Charter, the Board collectively, and each Director individually, has the right to seek independent professional advice at AGL’s expense to help them carry out their responsibilities. During the financial year, neither the Board collectively nor any individual Director availed themselves of this right. 

It is usual for the non–executive Directors to confer, without management being present, at the start of each scheduled Board meeting. 

## Recommendation 2.2 – The Chair should be an independent Director 

Under AGL’s Constitution, the Board elects a Chairman from amongst the non– executive Directors. It is a requirement of AGL’s Board Charter that the Chairman be independent. 

During the year, the Board elected Jerry Maycock as Chairman to replace Mark Johnson who retired as a Director at the 2010 Annual General Meeting. The Board is satisfied that Mr Maycock is, and has been throughout the year, an independent Director. 

## Recommendation 2.3 – The roles of Chair and Chief Executive Offi cer should not be exercised by the same individual 

The requirement in AGL’s Constitution that the Chairman be appointed from among the non–executive Directors means that the roles of Chairman and CEO are not exercised by the same individual. 

The Chairman presides over AGL’s Board meetings and shareholder meetings. Under AGL’s Board Charter, the Chairman is also responsible for: 

> leading the Board in reviewing and discussing Board matters; 

> managing the efficient organisation and conduct of the Board’s function; 

> briefing all Directors in relation to issues arising at Board meetings; 

> facilitating effective contribution by all Directors and monitoring Board performance; 

> overseeing that membership of the Board is skilled and appropriate for AGL’s needs; 

> promoting constructive relations between Board members and between the Board and management; 

> reviewing corporate governance matters with the Company Secretary and reporting on those matters to the Board; and 

> overseeing the implementation of policies and systems for Board performance review and renewal. 

## Recommendation 2.4 – The Board should establish a nomination committee 

During the year the Board established a Nominations Committee to operate with effect from 1 January 2011. The Committee comprises all AGL’s non– executive Directors. The Committee has adopted a formal Charter that is required to be reviewed at least every two years. A copy of the Charter is available on AGL’s website. 

The Committee is responsible for: 

> reviewing the skills, knowledge and experience a Director should have, having regard to AGL’s operational, financial and strategic objectives; 

> reviewing the structure, size and composition of the Board and Board Committees; 

> developing and implementing a process for evaluating Board, Committee and individual Director performance; 

> developing selection criteria for the appointment of new Directors and overseeing arrangements for the effective appointment and induction of new Directors; 

> developing succession plans for non– executive Directors to maintain an appropriate mix of skills, experience, expertise and diversity on the Board; and 

> reviewing and approving any continuing education for Directors. 

The Committee met once during the year. Details of Directors’ attendances are set out on page 44 of this Annual Report. 

## Recommendation 2.5 – Companies should disclose the process for evaluating the performance of the Board, its committees and individual Directors 

## Evaluation of Board 

The Board regularly reviews its own performance. The most recent review, which was completed during the year, involved each Director and several Executives completing a questionnaire covering: 

> the role of the Board; 

> the composition of the Board; 

> the operation of the Board; 

> group behaviours and protocols; and 

>Board performance. 

The review was facilitated by an independent adviser with relevant expertise. 

The results of the review were discussed at a subsequent Board meeting. The Chairman also met separately with each Director to discuss individual responses to the questionnaire. The review has led to some changes to increase the time allocated at Board meetings to the discussion of strategic issues. It also led to the formation of the Nominations Committee. 

