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Governance, processes and policies

AEMO is committed to operating ethically, efficiently and effectively, and in line with best practice in corporate governance. This page outlines the processes and policies that help us do this.

How we operate

AEMO is registered as a public company limited by guarantee. We are a not-for-profit organisation; our operating costs are recovered through fees paid by market participants.

We operate within a broader energy market governance structure, alongside the Energy Security Board (ESB), the Australian Energy Market Commission (AEMC) and the Australian Energy Regulator (AER). This approach was endorsed by the 2015 Review of the Governance Arrangements for Australian Energy Markets as being fundamentally sound and among best practice internationally.

AEMO’s functions are prescribed in its Constitution and in legislative instruments such as the National Electricity Law and National Gas Law; and rules made under them, the National Electricity Rules and National Gas Rules, as well as Western Australian provisions such as the Wholesale Electricity Market Rules.

Our Board

AEMO operates under the governance of our Board of Directors, which oversees AEMO’s business affairs to ensure that the company meets its corporate objectives and responsibilities while at all times complying with relevant laws and regulatory regimes. The Board also monitors the performance and cost-effectiveness of AEMO’s operations and systems. The Board is accountable to AEMO’s members.

The majority of the Board’s directors must be independent of management and free of any relationships that could interfere with their ability to exercise their independent judgement.

Board policies and charters

To support robust corporate governance, the Board operates in line with the following policies and charters.

Director appointment process

The appointment of a new director occurs when a current director has completed two terms on the Board or steps down for other reasons. It follows a documented process that ensures that stakeholders are consulted, the Board’s independence is maintained, and the right candidate is selected.

Appointment process

  1. Identify requirements

    The Board identifies the desired skills of the new director and whether the new director meets the independence criteria.

  2. Search process

    Members are advised of the search for a new director and are given the opportunity to nominate candidates. At the same time, the vacancy is advertised, and a search firm engaged by AEMO starts the search process.

  3. Selection panel

    Following the creation of a long list of candidates by the search firm, the selection panel determines a short list. Short-listed candidates are interviewed by the selection panel, which makes recommendations.

  4. Special General Meeting

    The Board considers the recommendations. At a Special General Meeting, members consider the recommendations and approve a submission to the Council of Australian Governments (COAG) Energy Council. Alternatively, members may refer the matter back to the selection panel for further consideration.

  5. COAG Energy Council

    The Energy Council considers the recommendations and approves the appointment of the new director. Alternatively, they may refer the matter back to the selection panel.

Organisational policies

We are committed to sound and ethical corporate practices and decision-making; the following policies help to safeguard the integrity of AEMO as an organisation.

Memoranda of Understanding (MOUs)

To support effective industry governance, and a clear understanding of roles and responsibilities, AEMO has signed MOUs with key bodies within Australia’s energy industry.

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