Page 133 - Annual Report 2020

Risk and Audit Committee members during the year Strategic Report

Name Independent Status Attendance
Lindsay Maxsted (Chair until 1 May 2020) Yes Member for whole period 11/11
Terry Bowen (Chair from 1 May 2020) (1) Yes Member for whole period 11/11
Ian Cockerill (2) Yes Member for whole period 10/11
Anita Frew Yes Member for whole period 11/11
2
(1) Mr Bowen is the Committee’s financial expert nominated by the Board.
(2) Mr Cockerill was unable to attend the RAC meeting scheduled for 15 August 2019 due to the need to fly to London at that time in order to attend another board
meeting in London the following day. As this was his transitional year, there were some inevitable clashes with pre-existing meetings, and this was one that could
not be resolved. Since then, all meetings have been rescheduled where necessary to avoid clashes. Mr Cockerill provided detailed comments to the Chair of the
Committee ahead of the meeting.
Committee activities in FY2020 Governance at BHP
Integrity of Financial Statements and funding matters Other governance matters
• Accounting matters for consideration, materiality limits, half-year • Samarco dam failure provision
and full-year results • Tailings storage facility failure material risk
• Commentary and explanatory notes to the Financial Statements • Escondida, Cerro Colorado, BMA guarantees
• Closure and rehabilitation provision • Revolving credit facility
• Sarbanes-Oxley Act compliance • Sexual harassment material risk
• Financial governance procedures • Update of the Committee Terms of Reference Remuneration Report
• Reserves and resources • Update of the Internal Audit and Advisory Terms of Reference
• FY2020 portfolio valuation review • Update of the Provision of Audit and Other Services Policy
• Weighted average cost of capital review by the External Auditor
• Funding updates Fair, balanced and understandable
• Business RAC meetings
• Inter-company loans and group guarantees update The RAC confirmed its view to the Board that BHP’s Annual Report
2020 taken as a whole is fair, balanced and understandable.
• Deed of Cross Guarantee
For the Board’s statement on the Annual Report, refer to the
External auditor and integrity of the audit process Directors’ Report in section 4. Directors’ Report
In making this assessment, the RAC considers the substantial
• External audit report governance framework that is in place for the Annual Report.
• External audit letters of engagement, external audit fees and This includes management representation letters, certifications,
non-audit services
• Management and external auditor closed sessions RAC oversight of the Financial Statements and other financial
governance procedures focused on the financial section
• Audit plan, review of performance and quality of service of the Annual Report, together with verification procedures
• Ernst & Young (EY) independence and non-audit services for the narrative reporting section of the Annual Report.
• EY audit transition
Integrity of Financial Statements
Effectiveness of systems of internal control and risk management The RAC assists the Board in assuring the integrity of the
Financial Statements. The RAC evaluates and makes
• Material risk reports recommendations to the Board about the appropriateness Financial Statements
• Approach to emerging risks of accounting policies and practices, areas of judgement,
• Group risk profile compliance with accounting standards, stock exchange
• Viability statement and legal requirements and the results of the external audit.
• Robust risk assessment It reviews the half-yearly and annual Financial Statements
• Practical application of the new Risk Framework and makes recommendations on specific actions or decisions
• Updates to and review of the Risk Appetite Statement and (including formal adoption of the Financial Statements and
confirmation that the Group is operating with due regard reports) the Board should consider in order to maintain the
to that appetite integrity of the Financial Statements.
• Monitoring performance against risk appetite through key risk CEO and CFO assurance
indicators
• Approval of the internal audit plan, plan principles and regular For the FY2020 full year and half year, the CEO and CFO have Additional information
reports on progress against the internal audit plan certified that BHP’s financial records have been properly
• Cultural assessments in internal audits maintained and the FY2020 Financial Statements present
• Matters of note arising from internal audits a true and fair view, in all material respects, of our financial
• Internal audit reports condition and operating results and are in accordance with
accounting standards and applicable regulatory requirements.
• Internal assessments of performance of Internal Audit and Advisory
• Fraud report The CEO and CFO have also certified to the Board that the
• Committee and Group Assurance Officer and Chief Risk Officer Financial Statements for the full year and half year are founded
closed sessions on a sound system of risk management and internal control
• Ethics and compliance reports, grievance and investigation processes and the system is operating efficiently and effectively.
• Insurance update and Directors’ and Officers’ insurance update
• Tax updates Shareholder information
• Material disputes updates
• Data protection and privacy risk update
• Updates on control framework and risks regarding COVID-19

BHP Annual Report 2020 131