This is the Risk Management Committee Charter for Horizon Oil Limited (“Horizon
Oil”). The charter governs the procedures of the Risk Management Committee
(“Committee”) and outlines the procedures and guidelines for the review and supervision of
an effective and comprehensive risk management system for Horizon Oil.
2. Risk Policy Statement
Horizon Oil is committed to implementing and maintaining a comprehensive risk
management system. By effectively managing risk, Horizon Oil:
- reduces the likelihood of a health or safety incident affecting its personnel;
- minimises or controls its environmental impact;
- increases the likelihood of meeting its business objectives; and
- improves stakeholder value
3. Risk Management Committee
The Committee is a committee of the Horizon Oil’s Board of Directors (“Board”). Its primary
purpose is to support and advise the Board in fulfilling its responsibilities to shareholders to
identify, assess, monitor and manage risks and, as appropriate, escalate and communicate
identified material risks (and their corresponding mitigation strategies and controls).
The role of Committee, in the discharge of its primary purpose, is to:
- review material risks and corresponding risk mitigation strategies and controls identified
by the risk management system;
- review and supervise the implementation and administration by management of a
comprehensive risk management system;
- review and supervise Horizon Oil’s insurance program, having regard to the nature of
Horizon Oil’s business and the insurable risks associated with the business; and
- review and supervise the procedure for communication and escalation of risks by
management to relevant stakeholders including the Board.
3.1 Committee composition
The composition of the Committee will be consistent with the ASX Corporate Governance
Principles and Recommendations, where reasonably practicable, as follows:
- the Committee will consist of three members, of whom a majority are independent
- the Chairman of the Committee independent director.
3.2 Removal or resignation from the Committee
If a member of the Committee retires, is removed or resigns from the Board, that member
ceases to be a member of the Committee. The Board will appoint the successor.
3.3 Committee may invite
The Committee may invite any senior management member or any other individual to attend
a meeting of the Committee, as they consider appropriate.
The company secretary is the secretary of the Committee.
The Committee will meet as frequently as required but not less than twice a year. Any
Committee member or the company secretary may call a Committee meeting.
3.5.2 Calling meetings and notice
A notice of each meeting confirming the date, time, venue and agenda will be
forwarded to each member of the Committee in the week before the date of the
meeting. The notice for members will include relevant supporting papers for the
agenda items to be discussed.
The Committee is entitled to direct any special investigation that the Committee considers
appropriate and to consult any independent expert that the Committee considers appropriate
to carry out its duties. Horizon Oil bears the costs of any such investigation or consultations.
3.7 Report to board
The Committee chairman, or delegate, will report to the Board following each meeting.
Minutes of proceedings and resolutions of Committee meetings will be kept by the
secretary. Minutes will be distributed to all Committee members and the chairman of the
Board, after the Committee chairman has given preliminary approval. Minutes, agenda and
supporting papers will be made available to any director upon request to the secretary,
providing no conflict of interest exists.
3.9 Quorum and voting
A quorum will comprise any two Committee members. In the absence of the Committee
chairman or appointed delegate, the members will elect one of their number as chairman for
Each member will have one vote and the chairman of the Committee will not have a second
or casting vote.
The Chairman of the Committee will liaise with the Chairman of the Audit Committee to
ensure that areas of overlap between the two Committees are appropriately addressed and
that matters which are properly the responsibility of the Audit Committee are not separately
dealt with by the Risk Management Committee.
The Committee chairman will conduct review of this charter every two years to ensure that it
continues to reflect the current best industry practice processes. The Board will need to
approve any amendments that stem from the review.