Ethics and Governance: Senex Energy Limited

This article discusses the ethics and governance practices of Senex Energy Limited, an Australian oil and gas exploration company. It covers the board composition, remuneration report, and the application of agency theory and resource-based theory in the company's governance.

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Ethics and Governance: Senex Energy Limited

ETHICS AND GOVERNANCE 1
Table of Contents
Introduction................................................................................................................................1
Corporate governance in Senex Energy Limited.......................................................................3
The Board Composition of Senex..........................................................................................4
Report from CHAIRPERSON and THE CEO:......................................................................6
Remuneration report...............................................................................................................6
Board orientation........................................................................................................................7
Agency theory........................................................................................................................7
Board composition of Senex..............................................................................................8
Board focus and key communication.................................................................................9
Resource-based theory...........................................................................................................9
Board composition.............................................................................................................9
Board Focus.....................................................................................................................10
Key communication.........................................................................................................10
Interpretation of company communication using legitimacy theory.......................................10
Conclusion................................................................................................................................11
Bibliography.............................................................................................................................13

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Introduction
Senex Energy Limited is an autonomous Australian oil and gas exploration and
manufacturing organization. The company has a 30-year history and worldwide portfolio of
onshore assets, and its headquarters is in Queensland and South Australia. The organization
mission and vision tighter defines that the company always stands for the value. Their gaols
define them about how to work and where they have to work (Senex Energy Limited, 2019).
(Senex, 2019).
Purpose
WE ARE SENEX ENERGY
The purpose of the company is to provide oil and gas to advance lives and helps the
liveliness wants of the Australia Company worldwide.
Mission
WE ARE UNITED

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Company safeguard peoples and environment, construct an excellence relationship
with the customers, and deliver the facilities according to the promises done by the company.
Value
WE VALUE
Company has integrity in a thing which they do, and have a motto of winning
together.
This organization was once known as Victoria Petroleum NL. As the company is
listed in the Australian Securities Exchange in 1984, the goodwill of the organization has a
good sympathetic of the Australian oil and gas business. The organization is listed with the
code SXY (Senex Energy Limited, 2019).
Recent history
The recent activity of the company shows that it has established a planned
relationship through EIG Global Energy Partners. Now Senex an EIG is occupied composed
to enhance the development of the Western Surat Gas Project.
The company has raised a capital of $91 million via Share Purchase Plan &
institutional share location and awarded $5.82 million in finance over the South Australian
Government’s Plan for Accelerating Exploration (PACE) Gas Grant Program to progress the
Vanessa gas project in the Cooper Basin for local gas consumers (Senex, 2019).
Overview of the oil and petroleum industry
This industry helps in making available the important material and services to the
economy at large. With the population expansion, this sector expands in symbiosis. But due
to a limited number of fossil fuels, this sector is changing its shape too.

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The Australian oil and petroleum sector help in providing these facilities to the
market, along with natural gas, nuclear and renewable energies (Grace, 2013).
Following years of unalloyed growth, to sustain production many players between the
sector are faced with discovering new ways of implementing to changing market needs,
ecological pressures, changing regulation and technological advances.
The code of conduct of the organization helps the managers and management to work
according to ethical standards. Senex acknowledges that reputation is the main element of
success (Senex Energy Limited , 2014).
Cost of conduct of a company set out the behavior for the relationship and Senex’s
dealing inside and outside. It also gives the procedure to assist the Senex people to meet such
ethical standards. It applies to employees, directors even to the contractors of the Senex
group.
The purpose of the report is to give the knowledge about the corporate governance i.e.
the composition of the board, remuneration report. This will also be going to focus on the
board orientation by using the agency theory and resource-based theory based on their
independent and non-independent directors, as well as, interpretation of the communication
by using the legitimacy theory.
Corporate governance in Senex Energy Limited
As this company is listed on the exchange of Australia i.e. Australian Securities
Exchange, Senex is limited and restricted to work according to the ASX Listing Rules and
laws, and basic requirement of its environment. The Australian Board trusts that Senex has
obeyed with all of the ASX Corporate Governance Council Guidelines (Senex Energy
Limited, 2018).

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The Senex Board Composition is comprised of the chairperson and the managers of
the organization as per their experience skills and qualification.
It has seven Directors included the chairperson of the concern. The majority of the
BOD is Independent directors including CEO and Chairperson of the organization.
The Chairperson of the organization is the Independent director of the company
(Senex, 2018).
The Board Composition of Senex
S.no. Board of Directors Designations/Position Role in boards committee
1. Trevor Bourne Chairman,
Independent Non-
executive Director
As board chair, Trevor is not
count up as an associate of any
board group but he has to appear
and contributes in all meetings of
board groups.

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2. Ian Davies Managing Director
and Chief Executive
Officer
As Managing Director and CEO,
he is not termed as an associate of
any board group but he joins and
takes a part in all gatherings of
board groups, except where
disputed.
3. Ralph Craven Independent Non-
executive Director
Ralph is chairman of the
Remuneration and Nomination
Committee, and associate of the
Audit and Risk Committee.
4. Timothy Crommelin Non-executive
Director
Tim is a part of the Audit and Risk
Committee.
5. Debra Goodin Independent Non-
Executive Director
Debbie is Chairman of the Audit
and Risk Committee and associate
of the People and Remuneration
Committee and Nomination

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Committee.
6. John Warburton Independent Non-
executive Director
John was an associate of the
People and Remuneration
Committee and Nomination
Committee on 5 May 2017 and as
a director, he was authorized to
join, take part in meetings of the
other board groups excluding in
the case of conflicted.
7. Andrey Zhmurovsky Non-executive
Director
Andy is an associate of the Senex
Nomination Committee.
(Senex, 2018).
As per the principle, 2nd of the company i.e. STRUCTURE THE BOARD TO ADD
VALUE, the composition of the board is very appropriate.
Report from CHAIRPERSON and THE CEO:
Chairperson gives the message that their sound capital management has always been
a hallmark of the company and will continue to be as Senex moves into a phase of investing
for growth
Message from the CEO is that their management is proud to be playing our part in
Australia’s changing energy mix, and they expect to be judged on their actions as much as
their words (Senex, 2018).

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Remuneration report
The governance remuneration framework of the Senex’s for the executives comprises
of the three kinds of components:
 Total Fixed Remuneration;
 Short term Incentive; and,
 Long term Incentive.
The company has adopted a framework that is directly linked to the equity-based
incentive.
In the string of the performance year, company set the three stages or goals on which
different percentage of the STI is mentioned which is given to the management reaching that
goal i.e. 25%, 50%, and 100% (Gilman, 2013).
The LTI is ‘at risk’ payment condition for the attainment of pre-defined act metrics
over a 3 year historical. Starting of each year, the Board regulate the presentation difficulties
for the LTI to be accessible to the CEO and Executive KMPs.
Total fixed payment projected business performance percentage and average distinct
performance %. On the base of the Board’s willpower of the business presentation rating for
FY18, the Board granted FY18 STI bonuses averaging 78.2% of extreme STI to the CEO and
those managers, with 21.8% % of the FY18 STI. Rights detained by the CEO and those
managers losing on 14 August 2018, the date of the Board’s willpower (Gilman, 2013).
Board orientation
The Senex energy limited board orientation is the concept that helps the managers and
directors in stating their contribution towards commercial governance. The committee of

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corporate governance is accountable for board orientation. The role of the bora orientation is
to specify the rules and responsibility of BOD of Senex Energy Limited, it also helps in
providing support and promotes the agreement about their work (Senex, 2019).
To understand the better board orientation of the company, there is the explanation of
the two theories which is followed in the Board of the company. The first one is Agency
theory and second is Resource-based theory.
Agency theory
In agency theory, Agency theory helps to appreciate the relations among agents and
principals. The agent signifies the principal in a particular business transaction and is
estimated to signify the best benefits of the principal lacking respect for self-interest. This can
cause conflict between the principals and agent because of the different interest as well as
some agent does not act in the interest of the principals (Mitnick, 2015).
“SENEX ENERGY LIMITED” governance goal is to safeguard the shareholders and
their interest by non-executive directors of the company.
Hence, Agency theory is applicable in this organization. According to this theory, the
non-independent directors are not needed in the organization as the non-executive directors
and managers already motivated to do their actions, which are in favor of the organization.
This theory works in the profit of the shareholders. This theory helps in identifying,
responding and understanding its shareholder’s groups. The shareholder's group includes
individual, company, or institution that owns at least one share of a company. Senex
Company Board follows the principle of good corporate governance, where the directors
received the remuneration related to the performance. Senex Energy Limited” constructs the
skilled report which shows that the board of the company has the skills, experience and
knowledge individuals. This helps in providing the corporation in an effective direction,

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which opens the door for the searching resources for the corporation (Financial Management,
2018).
The Board focus is to provide a shareholder with the profits, dividend, and growth.
Remuneration provided to the Directors and the Executives, mentioned in the remuneration
report is in detail and this report is the part of the director’s report. The key communications
of this company specify the Remuneration Report, Company Income Statement, and Balance
Sheet. To understand how this theory is applicable in the organization, here is the details
explanation of Senex Energy Limited board composition, its focus and key communication.
Board composition of Senex
This theory is best for the board composition of Senex Energy Limited as there are
majority independent directors installed by the shareholders. They have a concern about the
shareholders and care.
The application of agency theory concept provides benefits to those people also who
are connected with the Senex Energy Limited (Senex, 2019).
Board focus and key communication
The board of the company focuses on the shareholder's growth, profits derived, and
their needs. It helps the shareholder. This help is done by communication through the income
statement, balance sheet, and other financial statements. This key communication helps in
maintaining the coordination among the different groups.
Resource-based theory
According to resource-based theory, the organization is a mixture of tangible and
intangible assets and capabilities. This simply means that the company should be a mixture of
independent and dependent directors. The Senex Energy Limited is also the mixture of the

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talents and skills of various person in the management. It is vital to have the resource in the
company, does not matter from the independent and non-independent director. One of the
main focus of this theory is on the resource and assets which is to make available to the
company for the function of the organization (Barney, 2011).
This theory helps the Senex Energy Limited focuses the uncertainty initiated by
external environmental factors and how the requirement on outside organizations can be
diminished. Four benefits that board directors of the company can bring in their management
with the help of this theory is advice, access to information, preferential access to resources
and legitimacy.
Board composition
Senex Company has sufficient resource as and when needed. Their performance does
not get restricted because of the resource, as the company applies the resource-based theory
to enhance its growth. It does not matter from the number of independent and non-dependent
directors, what matters id the continuous flow of the resource in the company.
Board Focus
The main focus of the boras should be on external resource flow management. Proper
governance in the company should is followed by the company at the time of application of
this theory. The directors of the Senex is on the providers of the resources to the company.
Key communication
The key communication of the company is to identify what best serve and secure the
assets and resource of the organization.
The above discussion helps in the growth of strategies and capital management in the
company. Hence, “Agency theory” and “Resource-Based theory” is applicable in Senex

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Energy Limited’s corporate governance. In addition, this theory can be used in the Board
Orientation effectively.
Interpretation of company communication using legitimacy theory
When the company wants to volunteer the social aspects and develop as well as
implement environmental disclosure, then the company should implement the Legitimacy
theory. Legitimacy theory also helps in protecting the assets of the company. This theory
helps to follow the rules and regulation as per governance and also focus that the company
operated with the restricted norms of the society in which it deals. It results in generating the
link or connection between the company and society (Bitektine, 2011).
The most common component for business success is communication. Effective
communication can help in generating the profits of the company and also enhance the sale,
goodwill and proper implementation of strategies. Bu using effective communication tool, it
helps the company in enhancing open and candid communication.
Senex Energy Limited has implemented the communication process in such a way
which will be going to reveal the meaning and relationships of the natural heritage is the
interpretation of communication in this organization. Every organization has its own
communication interpreters which help in communication inside the organization. This
integrates should have the best knowledge about communication tools.
For making the communication more effective the company can apply the legitimacy
theory in their environment. It just mixes the communication principles of the organization.
Every company aims to work under its code of conduct and standards. Every
company wants their each and every employees and society should be treated with fairness.
The trustworthy relationship with the management and the society can be managed by the

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legitimated theory and the company should be legitimated towards their goal and social
interest (Senex, 2019).
From the above, it can be summarized that the communication among the board and
society can be maintained by the proper legitimacy theory. This theory also advises the
company to form the strategies which can help the company in doing effective
communication with its stakeholders and shareholders.
Conclusion
From the above information, it can be concluded that Senex energy Limited is having
a proper organizational structure by which the company is labelling to focus the effective
corporate governance. Effective corporate the company has followed governance by the use
of the various theories has been in the above paragraph.
The most profitable and effective theory in Senex Energy Limited will be Agency theory and
resource-based theory. In this report, there is a brief explanation about the company’s
independent directors and the board orientation which has been explained with the two
theories. This also specifies the remuneration system of the company and how to use the
legitimacy theory in the organization for effective communication.

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Bibliography
Barney, J. B. (2011). The future of resource-based theory: revitalization or decline? Journal
of management, 1299-1315.
Bitektine, A. (2011). Toward a theory of social judgments of organizations: The case of
legitimacy, reputation, and status. . Academy of management review, 151-179.
Financial Management. (2018, June 15). Agency Theory in Corporate Governance. Retrieved
from efinancemanagement:
https://efinancemanagement.com/financial-management/agency-theory
Gilman, J. L. (2013). Characterizing Emissions of Volatile Organic Compounds (VOCs)
from Oil and Natural Gas Operations in Haynesville, Fayetteville, and Marcellus
Shale Regions via Aircraft Observations During SENEX 2013. In AGU Fall Meeting
Abstracts.
Grace, R. D. (2013). Oil: an overview of the petroleum industry. Elsevier.
Mitnick, B. M. (2015). Agency theory. Wiley encyclopedia of management, 1-6.
Senex. (2018). 2018 annual report. Retrieved from senexenergy:
https://www.senexenergy.com.au/wp-content/uploads/2018/08/2018.08.21-2018-
Annual-Report.pdf
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https://www.senexenergy.com.au/about/board/board-and-executive/
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https://www.senexenergy.com.au/about/board/

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Senex. (2019). History. Retrieved from senexenergy:
https://www.senexenergy.com.au/about/history/
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https://www.senexenergy.com.au/investors/
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https://www.senexenergy.com.au/about/vision-values/
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