PRINCIPLE 3: PROMOTE ETHICAL AND RESPONSIBLE DECISION-MAKING

Conduct and ethics
The Board has adopted a Code of Conduct to guide the directors and promote high ethical and professional standards and responsible decision-making.

In addition, the company has adopted a Code of Ethics and Conduct for all employees (including directors). The Code of Ethics and Conduct is aimed at maintaining the highest ethical standards, corporate behaviour and accountability across the group. Employees and directors are expected to respect the law; respect confidentiality; properly use group assets, information and facilities; value and maintain professionalism; avoid conflicts of interest; act in the best interests of shareholders; contribute to the company’s reputation as a good corporate citizen; and act with honesty, integrity, decency and responsibility at all times.

Wesfarmers encourages the reporting of unlawful and unethical behaviour, actively promotes and monitors compliance with the Code of Ethics and Conduct, and protects those who report breaches in good faith. The Code of Ethics and Conduct provides protection to whistleblowers, as required by the Corporations Act 2001. Under the code, whistleblowers are protected from any disadvantage, prejudice or victimisation for reports made in good faith of any breaches of the code or the Corporations Act 2001.

The Board has appointed protected disclosure officers (the Finance Director, Chief Legal Counsel and Company Secretary) to receive reports and manage investigations in relation to potential breaches of the Corporations Act 2001. Guidelines were developed to assist directors and senior executives to manage reports of whistleblower complaints.

In July 2006, the Board approved amendments to the code to strengthen the prohibitions on bribery and corrupt practices and to implement a notification and reporting process relating to facilitation payments.

The Board’s Code of Conduct and the Code of Ethics and Conduct are consistent with ASX Principles 3 and 10. Summaries of the codes are available from the corporate governance section of the company’s website.

Minimum shareholding requirement for directors
The company’s Constitution requires a director to hold, directly or indirectly, a minimum of 1,000 ordinary shares in the company within two months after appointment and at all times during the director’s period of office.

Share Trading Policy
The company’s Share Trading Policy reinforces the requirements of the Corporations Act 2001 in relation to insider trading. The policy states that all employees and directors of the company, and its related companies, are expressly prohibited from trading in the company’s securities, or securities in other entities in which Wesfarmers has an interest, if they are in possession of “inside information”.

A director who intends to buy or sell shares must:

• advise the Company Secretary in advance of their intention to trade;
• confirm that they do not hold unpublished inside information; and
• have been advised by the Company Secretary that there
  is no known reason to preclude the proposed trading.

Each director has entered into an agreement with the company under which the director must notify the company of any trade in the company’s securities, or an associated entity’s securities, within three business days.

The company’s Share Trading Policy prohibits executive directors and divisional managing directors from entering into transactions or arrangements which transfer the risk of any fluctuation in the value of shares obtained under Wesfarmers’ long term incentive plan whilst the shares are subject to a restriction.

The company’s Share Trading Policy is consistent with ASX Principle 3. A summary of the Share Trading Policy is available from the corporate governance section of the company’s website.