Corporate Governance Practices at Caltex Australia Limited

Running Head: Principles of Corporate Governance
Corporate Governance Practices
Caltex Australia Limited

Principles of Corporate Governance 1
Executive summary:
This report presents the case of Caltex Australia Limited and its corporate governance
practices. Corporate governance practices are those practices that help the company to protect
the interests of its stakeholders by maintaining transparent relationships with them. To
understand the effectiveness of Caltex’s corporate governance framework, its board
composition and the roles of different directors have been studied and it was found that
company is complying with all the relevant laws and provisions of Australian Corporations
Act, 2001 and also it is voluntarily disclosing all the relevant and reliable information related
to its business practices so as to protect its shareholders. To check the company’s efficiency
in the areas of ethical, social and environmental behaviour the use of various theories such as
legitimacy theory, stakeholder theory and stakeholder’s theory have been made.

Principles of Corporate Governance 2
Table of Contents
Executive summary:................................................................................................................................1
Introduction:.............................................................................................................................................3
Part A: About Caltex............................................................................................................................3
Company’s Background..................................................................................................................3
Caltex’s Industry..............................................................................................................................4
PART B: Corporate governance at Caltex Australia...........................................................................5
Board composition...........................................................................................................................5
Chairman’s and CEO’s report:........................................................................................................6
Director’s Remuneration..................................................................................................................7
Part C: Board orientation at Caltex Limited:.......................................................................................7
Part D: Interpretation of communication made by Caltex.................................................................10
Conclusion:............................................................................................................................................12
References:.............................................................................................................................................13

Principles of Corporate Governance 3
Introduction:
The present report is prepared to critically evaluate the corporate governance practices at
Caltex Australia Limited which is a leading organisation in the energy industry of Australia.
To identify and analyse Caltex’s corporate governance practices, the annual report for the
year 2017 is examined. Along with that the corporate governance statement of Caltex has
been thoroughly examined. As a part of this report, the importance of adoption of principles
of corporate governance for the business is determined. A good corporate governance
framework can make the existence of business easy because it allows it to comply with
various theories such as stakeholder’s theory, shareholder’s theory and the legitimacy theory.
Part A: About Caltex
Company’s Background
Caltex Australia Limited is an Australian stock exchange listed company which had started
its operations in 1990. The company is headquartered in Sydney, Australia. Caltex is one
among the leading corporations dealing in petroleum products in Australia. It supplies fuel
used in the transportation vehicles and along with this it also deals in the retailing business of
convenience stores. It generates maximum portion of its revenues through the refinement and
manufacturing of fuel products. The basic activities that Caltex undertakes as a part of its
business include purchasing, refinement, distribution and marketing of the petroleum
products majorly in the three countries: Australia, Singapore and News Zealand. Caltex
Limited is operating through two of its major segments: Supply & Marketing segment and the
Lytton segment (Bloomberg, 2018). The segment of supply and marketing undertakes the
activities related to selling fuels and lubricants, speciality products as well as the provision of
goods at the convenience stores through the wide network using different distribution
channels such as pipelines, terminals, transportation fleets and depots. The Lytton segment,