Page 346 - Annual Report 2020

7.5.1 Directors 7.5.5 Appointment and retirement of Directors

The Board may exercise all powers of BHP, other than those that are Appointment of Directors
reserved for BHP shareholders to exercise in a general meeting. The Constitution and Articles of Association provide that a person
may be appointed as a Director of BHP by the existing Directors of
7.5.2 Power to issue securities BHP or may be elected by the shareholders in a general meeting.
Any person appointed as a Director of BHP by the existing Directors
Under the Constitution and Articles of Association, the Board of will hold office only until the next general meeting that includes an
Directors has the power to issue any BHP shares or other securities election of Directors.
(including redeemable shares) with preferred, deferred or other
special rights, obligations or restrictions. The Board may issue A person may be nominated by shareholders as a Director of BHP if:
shares on any terms it considers appropriate, provided that: • a shareholder provides a valid written notice of the nomination
• the issue does not affect any special rights of shareholders • the person nominated by the shareholder satisfies candidature
• if required, the issue is approved by shareholders for the office and consents in writing to his or her nomination as
• if the issue is of a class other than ordinary shares, the rights a Director
attaching to the class are expressed at the date of issue in each case, at least 40 business days before the earlier of the
date of the general meeting of BHP Group Plc and the
7.5.3 Restrictions on voting by Directors corresponding general meeting of BHP Group Limited. The person
nominated as a Director may be elected to the Board by ordinary
A Director may not vote in respect of any contract or arrangement resolution passed in a general meeting.
or any other proposal in which they have a material personal Under the Articles of Association, if a person is validly nominated
interest except in certain prescribed circumstances, including for election as a Director at a general meeting of BHP Group
(subject to applicable laws) where the material personal interest: Limited, the Directors of BHP Group Plc must nominate that person
• arises because the Director is a shareholder of BHP and is held as a Director at the corresponding general meeting of BHP Group
in common with the other shareholders of BHP Plc. An equivalent requirement is included in the Constitution,
• arises in relation to the Director’s remuneration as a Director which requires any person validly nominated for election as a
of BHP Director of BHP Group Plc to be nominated as a Director of BHP
• relates to a contract BHP is proposing to enter into that is Group Limited.
subject to approval by the shareholders and will not impose Retirement of Directors
any obligation on BHP if it is not approved by the shareholders The Board has a policy consistent with the UK Corporate
• arises merely because the Director is a guarantor or has given Governance Code under which all Directors must, if they wish to
an indemnity or security for all or part of a loan, or proposed loan, remain on the Board, seek re-election by shareholders annually.
to BHP This policy took effect from the 2011 Annual General Meetings
• arises merely because the Director has a right of subrogation (AGMs) and replaced the previous system that required Directors
in relation to a guarantee or indemnity referred to above to submit themselves to shareholders for re-election at least every
• relates to a contract that insures, or would insure, the Director three years.
against liabilities the Director incurs as an officer of BHP, but only A Director may be removed by BHP in accordance with applicable
if the contract does not make BHP or a related body corporate law and must vacate his or her office as a Director in certain
the insurer circumstances set out in the Constitution and Articles of
• relates to any payment by BHP or a related body corporate in Association. There is no requirement for a Director to retire on
respect of an indemnity permitted by law, or any contract reaching a certain age.
relating to such an indemnity, or
• is in a contract, or proposed contract with, or for the benefit of, 7.5.6 Rights attaching to shares
or on behalf of, a related body corporate and arises merely
because the Director is a director of a related body corporate Dividend rights
If a Director has a material personal interest and is not entitled to Under English law, dividends on shares may only be paid out of
vote on a proposal, they will not be counted in the quorum for any profits available for distribution. Under Australian law, dividends
vote on a resolution concerning the material personal interest. on shares may be paid only if the company’s assets exceed its
In addition, under the UK Companies Act 2006, a Director has a liabilities immediately before the dividend is determined and the
duty to avoid conflicts of interest between their interests and the excess is sufficient for payment of the dividend, the payment of the
interests of the company. The duty is not breached if, among other dividend is fair and reasonable to the company’s shareholders
things, the conflict of interest is authorised by non-interested as a whole and the payment of the dividend does not materially
Directors. The Articles of Association of BHP Group Plc enable the prejudice the company’s ability to pay its creditors.
Board to authorise a matter that might otherwise involve a Director The Constitution and Articles of Association provide that payment
breaching their duty to avoid conflicts of interest. An interested of any dividend may be made in any manner, by any means and in
Director may not vote or be counted towards a quorum for a any currency determined by the Board.
resolution authorising a conflict of interest. Where the Board
authorises a conflict of interest, the Board may prohibit the relevant All unclaimed dividends may be invested or otherwise used by
Director from voting on any matter relating to the conflict. The the Board for the benefit of whichever of BHP Group Limited or
Board has adopted procedures to manage these voting restrictions. BHP Group Plc determined that dividend, until claimed or, in the
case of BHP Group Limited, otherwise disposed of according to
law. BHP Group Limited is governed by the Victorian unclaimed
7.5.4 Loans by Directors monies legislation, which requires BHP Group Limited to pay to the
State Revenue Office any unclaimed dividend payments of A$20
Any Director may lend money to BHP at interest with or without or more that have remained unclaimed for over 12 months.
security or may, for a commission or profit, guarantee the
repayment of any money borrowed by BHP and underwrite or In the case of BHP Group Plc, any dividend unclaimed after a
guarantee the subscription of shares or securities of BHP or of period of 12 years from the date the dividend was determined or
any corporation in which BHP may be interested without being became due for payment will be forfeited and returned to BHP
disqualified as a Director and without being liable to account to Group Plc.
BHP for any commission or profit.

344 BHP Annual Report 2020