In late 2016, following the retirement of long-standing board members Bart Philemon and Ziggy Switkowski AO FAICD, oil and gas explorer Oil Search saw an opportunity to instigate a number of changes to the make-up of its board. The dual Australian and Papua New Guinean (PNG) listed company strengthened its board diversity by appointing PNG national Mel Togolo CBE MAICD, a founding member of the Business Council of Papua New Guinea and its president for more than six years, and former Oil Search director Fiona Harris FAICD who returned to the board after stepping down in December 2015 with a personal health issue.
The Oil Search board also announced the creation of three new independent committee member (ICM) roles aimed at developing the directors of the future. The company is working with the Australian Institute of Company Directors’ (AICD) Advisory unit to deliver a series of workshops as part of its induction and training process for the ICMs.
The rationale behind the appointments was to draw on the experiences and capabilities of highly talented PNG citizens, while providing them with the opportunity to experience and participate in the governance processes of PNG’s largest and most successful listed company. Oil Search is the largest private sector employer and taxpayer in PNG.
Although not members of the board, the ICMs are expected to contribute fully to the effective functioning and execution of duties and responsibilities of the relevant board committees.
“I’m pleasantly surprised to be appointed as a committee member for Oil Search’s people and nominations committee,” says Mary Johns, company secretary at Bank South Pacific (BSP) and a former member of the 2015 Pacific Games Organising Committee and the Port Moresby Chamber of Commerce.
Johns is currently chair of Leadership PNG, a not-for-profit organisation that provides structured and focused learning programs with the aim of developing PNG’s future leaders.
“I think my PNG experience and the fact that the organisation I work with provides banking services across PNG and the Pacific, brings an understanding of the various jurisdictions and the challenges of the geography we operate in here in PNG.”
A lawyer by profession, Johns has practised in PNG for 21 years, 15 of which have been spent as company secretary at BSP. She says Oil Search has had an enormous impact on the country at a social and an economic level.
“The establishment of the Oil Search Foundation (in 2015) and the activities it undertakes in the territories and provinces to positively impact the communities is very important, especially as it provides access to things that are often taken for granted in more developed economies. It also provides opportunities for PNG citizens in terms of knowledge and training, which I think is important,” she says.
Fellow ICM, Richard Kuna, is an independent member of the audit and financial committee. Previously a partner in audit and advisory at KPMG, Kuna sits on the boards of the Bank of Papua New Guinea and the PNG Government’s Central Supply and Tenders Board.
Kuna studied at the University of Technology Sydney. “Oil Search started as a very small company in 1929 and now it’s probably the biggest public company in PNG. All of its core assets and its operations are in PNG, so it’s a significant entity and to be part of that is great,” he says.
“The benefits it provides to the economy, the government and the community in terms of providing social infrastructure such as schools, bridges and roads is fantastic. Most companies would rely on the government to provide those community benefits, but Oil Search extends beyond that.”
Kuna says the opportunity to learn about Australian jurisdiction and the significance of being on a listed board will be an eye opener. “In PNG, the government body which is charged with the oversight of the Companies Act here is not active and to my knowledge no director has ever been charged for non-compliance.
“But in terms of the duties and liabilities that it takes to be a director on the Oil Search board – we’ve got to get things right. That is huge. I think this aspect of training will clearly signify what it means to be a director in an Australian Securities Exchange listed environment, which is completely different to PNG. The director training is important for us.”
Serena Sasingian Sumanop is the third and youngest independent committee member. She works as a lawyer with the Department of Justice and Attorney General in PNG and has a Masters of Business from Queensland University of Technology. She is very active in the NFP sector where she sits on the boards of Femili PNG, a case management centre that assists survivors of family and sexual violence access the essential services they need, and The Voice Inc, a leading youth development and leadership organisation in PNG.
Sumanop believes her skills in the NFP and legal sector in PNG will help her contribute effectively to Oil Search’s health, safety and sustainability committee. “For me, the Oil Search Foundation is doing important work in providing sustainable solutions to key development challenges in the country. Its work with the Hela Provincial Hospital is an example of this as the foundation not only supports the hospital with capital works and medical supplies but also provides governance and management support to the board of the hospital.
Projects like this strengthen the government’s ability to effectively deliver essential services to rural communities and can become examples of best practice for other provinces.
“In PNG, our land is our identity and has sustained us for thousands of years, so Oil Search’s commitment to having a social licence to operate is something I admire about the company. As a younger person, I hope to bring the voices of the next generation of Papua New Guinea to the table and also enhance my leadership skills through exposure to world class corporate governance training,” she says.
Oil Search’s operating environment is unique and sets it apart from other large listed entities. The AICD’s Board Advisory team worked closely with Oil Search to build a consulting-led program specific to the needs of Oil Search’s ICMs and senior executives. “Governing in the Grey” focused on the dualities of governing across jurisdictions with their respective legal, social and cultural contexts. The first in a series of programs was delivered in mid-February 2017.
This is an edited extract of an article that appeared in the March 2017 edition of Company Director magazine. For more information on how the AICD's Advisory team can help your organisation, visit our Advisory website.