Ethics & Governance of Woodside

This document provides an overview of the ethics and governance practices at Woodside Petroleum Limited, a global gas and oil company. It discusses the company's board of directors, corporate governance structure, and remuneration policies. The document also highlights the importance of board orientation and the theories behind environmental accounting disclosures.

Running head: Ethics & Governance of Woodside
Ethics &Governance at Woodside Company
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Executive Summary
Woodside Petroleum Limited is a company which deals with gas and oil products. The
organization is duly engaged in marketing, and production, evaluation, and hydrocarbons. It is a
company which is divided into three distinct segments: Australia Oil constituting Wheatstone
LNG and the Floating Liquefied natural gas, North West Shelf project, and Liquefied Natural
gas. Some of its sections entail shipping and trading activities, and the activities conducted in
Canada, the United States, Myanmar and other parts in the world. It has a category dealing with
evaluation, exploration, development, sale, and production of the liquefied natural gas,
condensate, LPG and lastly crude oil from the Northwest Shelf enterprise. While on the other
hand, the Pluto Liquefied Natural Gas project also deals with some exploration, development,
sale, and production of the liquefied natural gas in expressly permitted localities.
Introduction
Woodside Petroleum limited was a company which was incorporated during 1954. The
Company was initially known as Woodside Oil Company. It owes its name from the town in
Woodside. Indeed it established as a company which focused its agendas on Victoria Gippsland.
Expanding its market base, Woodside teamed up with Burmah oil and shell to form the North
West Consortium (Palu, 2017). The Company underwent a serious metamorphosis ending up
being the current Woodside Petroleum Limited. The Company also indulges in the transaction of
numerous businesses under its broader objective. Foremost, Woodside Petroleum limited
operates under three categories, each in charge of different fields, namely: the production field,
the development field, and trading /shipping activities. The Company also comprises of some

Ethics & Governance of Woodside 3
small agencies which help the dominant Company in dispensing its duties. The following
projects fall under Woodside Petroleum Limited: Pluto Liquefied natural gas, Northwest Shell
Project, Wheatstone Liquefied Natural Gas, and Browse floating liquefied natural Gas
(Bernecker, 2016). This business dynasty is situated at fifty kilometers Northwest of Australia.
The divisions within the Company's structure are geared towards assisting or aiding the
Company to achieve their target mission, vision, and goals. Currently, Woodside Petroleum
Limited Company is ranked at number forty-eight as one of the best Australian energy company
out of more two thousand companies which exist in Australia.
Woodside Petroleum Limited is a gas and oil global company, enjoying a broader base in the
entire universe appreciated for providing world-class abilities. It is also an organization which
enjoys a reputable profile and capabilities for estimation of thirty-five years of growth in the
horizon entailing unlocking value, cash generation, repeating success. Admittedly Woodside
Petroleum Limits is a company which is at the cusp in Western Australia for a first opportunity
they do deliver some quantity extra Liquefied Natural Gas at the right moment people in the
world require it. The Northwest Shell Project operating under the roof Woodside Petroleum
Limited is one of the best facilities around the world. It also acts as an ivory tower as it remains
to be at the stature of the world premiere. In their first quarter report, they released in April 2019
the production system was affected by outages and cyclones, an increment in sales revenue,
completion of the Pluto Liquefied Natural Gas, agreements signed by the heads, and additional
debt was secured. Woodside Petroleum Company is one of the father images among some of the
companies which conduct the same business just like them. This Company, which deals with oil
and gas products is one of the companies in Australia which has employed several people to
work with them hence improving the social class and capability of people. Indeed, for an

Ethics & Governance of Woodside 4
economy of a country to strengthen its members and government should engage in a range of
business which will boost its GDP.
Review of Corporate governance at Woodside Petroleum Limited.
Woodside Petroleum Limited has an able board of directors who assists the Company in
achieving its mission, vision, and goal. The committee comprises of tenable directors who are
equal to the task underlying before them. The board of directors constitutes of both independent
and non-independent members. Among the people on the board, only the Chief Executive
Officer of the Company is an executive member while the rest of the directors are a non-
executive. For one to become a member of the board, he or she is required to have some
qualifications and experience. Both the board and its capable committee always work hand in
hand to ensure they continue to poses the right knowledge, balanced skills, diversity, and
experience that is necessary to steer the Company to achieve a high value of corporate
governance. The board also acts as the watchdog of Woodside Petroleum Limited company
management. The Chairman of the board of directors of the Company is always an independent
member or a non-executive member. The CEO is still a full-time job, thus making the CEO to be
an employee of the Company. As per the required composition of the board, the majority of its
members need to be independent members and not executive members. Last, the balance of the
board members should also give a broader perspective on the following areas of interest:
experience, diversity, expertise, and qualification. Directors who are members of the board are
always a symbol of knowledge, skill, expertise, and experience desirable or needed to steer the
Company to greater heights. In the board composition, it is the mandate of the national executive
members to bring both operational and international ideas that may enable the Company to
prosper.

Ethics & Governance of Woodside 5
While the CEO will only bring the real situation on the ground regarding the organization, the
Chairman of the board acknowledges that the Company is doing splendidly well based on its
milestones. He gives a flashback of his life and the Company's growth rate since he joined it way
back in 1972. Though now the Company has achieved a lot of things in Australia. The Company
had realized a significant increase in profit by around eighteen percent, also a full year dividend
percentage increment, and also he talks about the departure of shell from shareholders register. In
the Chairman's report, he also highlights the expansion of the Northwest Shelf project, further
establishment of Pluto, and the commencement of Myanmar and Senegal exploration.
On the other hand, the CEO of Woodside is one of the most ambitious members of the board
who wants the Company to maintain its base to maintain excellence. The CEO also points out in
his report that the Wheatstone project needs to be delivered and optimized, and lastly he says the
drilling of the Myanmar drilling is in progress. Under the Woodside remuneration policy, the
remuneration of both the directors and the administrative structure is divided into namely: the
variable annual reward and the fixed yearly reward.
The fixed annual reward is categorized upon the nature and the scope of the executive's
responsibility, and the level of his or her own experience, knowledge, and skill. The same fixed
annual reward is always benchmarked for the competition against international and existing
domestic peers to ensure that executive capability has been maintained (Bhanot, 2018). Besides
that variable annual reward is one of the most common awards given to both directors and
executive members at Woodside Petroleum Limited Company. Around twelve and a half percent
of the variable annual awards are always paid in terms of cash while estimates of twenty-seven
and a half are still allocated in an account which is restricted pending deferral after three years.

Ethics & Governance of Woodside 6
Thirty percent is also assigned to the restricted shares, making it possible to be deferred after five
years.
Board orientation
Undeniably, board orientation is one of the processes where new board directors are ushered into
the board of directors. This orientation will enable the newly ushered directors to know their
roles and responsibilities towards the management of the organization or the Company they are
governing. During the time of board orientation, the Chairman in charge of the committee
recruitment is the ultimate person. Notably, board orientation does not just entail the transfer of
responsibilities and roles, but also it makes the directors understand the in-depth activities of the
Company (Arzubiaga, (2019). The minutes always needs to commence with a lot of vigor an
enthusiasm by telling the newly recruited board members their duties and responsibilities. As one
of the non-profit members of the board, also giving them information about how the non-profit
activities of the board are going to be achieved by the Company.
The Woodside 2019 annual general meeting comprised of several things that the entire board
management was oriented. The notice of the annual public meeting comprised the following
issues which were considered to be very contentious: the election of the directors, financial
reports and statements of Woodside Petroleum Limited Company, amendment of Woodside
constitution, non-executive directors' remuneration and lastly the approval of the similar invasion
provisions (Linnenluecke, 2015). The annual board orientation was conducted, to enlighten the
board members about the financial reports and statements for both the board members to and

Ethics & Governance of Woodside 7
everyone in the Company to have a glimpse. Creating awareness to the directors that the election
of board directors was underway, and anyone interested supposed to follow the due process
either to participate as a voter or vie for the position of being a member of the board of directors.
Some three directors were seeking approval to be re-elected as board members in Woodside
Petroleum Limited Company (Mazyan, 2016). The names of these individuals are Dr. Ryan, Mr.
Cooper, and Ms. Pickard, who was supposed to retire by rotation according to the company rules
and regulation. The company constitution points out that directors always retire at the third
convene an annual general meeting. Thirdly the board needs to be also oriented the issue of
remuneration.
The remuneration report which had been prepared needs to be considered and then voted as
stipulated in the Company's Corporation Act. The details of the Company's policy regarding the
remuneration both senior executives, non-directors, and the Chief Executive Officer is situated at
page seventy-six to page ninety-seven of the 2018 annual report (Gianfelici, 2018). And they are
readily available for anyone who wants to have access to them. It is also clear to orient the board
that the vote for adopting the report is advisory only, and it doesn't require either the director or
the Company. Though later on, after the voting process has ended. It will be upon the board
members to give it contemplation when they are relooking at the policies and practices governing
the Company. Shareholders also will be the last people to be allowed to air out some issues of
concern regarding the remuneration report (Paniagua, 2018). Another contentious issue which
board of directors needs to be oriented on is the quest of approving the increase of the upper limit
of the aggregate for the remuneration of non-directors in any financial year. The proposed
increment of fee pool will take a course from 3/05/2019. Under the regulation and rules, they are
stipulated in the Company's constitution and the Australia Securities Exchange listing

Ethics & Governance of Woodside 8
management 10.17. The pool fee is always increased by the approval of the shareholders (Finn,
2018).
The last time fee pool was approved was in 2014, and it was done with the same shareholders at
an annual general meeting. It is crystal clear, this round the Company doesn't want to distribute
all the fee pool they have collected or generated. There are several reasons why the directors bare
seeking the consent of shareholders to approve the fee pool. The first reason is due to the
increase in several non-directors from the eight to nine since the year 2014 being part of the
boards planning the succession strategy. The second reason is to make the Company to have the
capability of recruiting non-directors who are of high caliber and having enough resources to pay
them their remuneration. Finally to create a window that will enable them to recruit for non-
executive members or directors who will for the good of the Company, making sure that the
board has attracted the right balance of experience, knowledge, and skill.
Several theories have been put in place to explain the environmental accounting disclosures of
companies an organization. These theories are shareholder theory, legitimacy theory, and
political, economic theory (Miqdad, 2018). Therefore legitimacy theory is one of the approaches
which is system oriented just like the shareholders' theory. Under legitimacy theory, the
organization to make an assumption, they are influenced, or they do change the society they are
operating. For an organization or a company to be independent, they need to pay detail attention
to the legitimacy theory for them to survive. Under this theory, it is proposed to the managers all
those people in the management position, when they have been supplies a right product or
material they need to source for the same (Hummel, 2016) continuously. Any company and
organization are always believed to be under a more extensive social system.

Ethics & Governance of Woodside 9
That they operate in between, the people who comprise this social system are individuals,
regulators, organization, and the entire public (Massingham, 2018). Therefore, for any company
or organization to survive in its market trend, it has to depend upon the grant and acceptance of
the Company's environment that makes the organization or the Company to gain its legitimacy.
The continuous assertion of this theory makes the organization or the Company to be perceived
by the external parties as a legitimate company in the society. An organization, particularly
Woodside Petroleum Limited company can gain legitimacy by educating and giving relevant
information to the community about the activities the Company is engaging in, and some of the
Company's performance. The other thing that Woodside Organization can do is altering the
image or how the entire public views it and end up keeping it attributes or behavior without
making any change. The other issue is that an organization or a company will always change or
deflect public opinions or attention from the main agenda of concern to some other related things
(Hughes, 2016).
In supposition, it is crystal clear that any company or organization should practice high levels of
ethics and governance to steer it. Woodside Petroleum Limited is one of the largest companies in
Australia that transact business dealings of oil and gas. It has an able board that comprises of
both the executive and non-executive members who will help the organization to achieve its
goals or dreams. The body also has people or members who pose the right balance of experience,
skills, and knowledge. Lastly, organizations accounting environment is very critical in the
manner they run or do issues about the organizations' interest. Several theories explain the
accounting environment like legitimacy theory, shareholders theory, and political, economic
theory.

Ethics & Governance of Woodside 10
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