BlueScope Steel Limited (BSL) Earnings Call Transcript & Summary

Well, welcome, everyone, to BlueScope's Annual General Meeting or AGM for 2021. Whilst we would love to be meeting with you face-to-face, unfortunately, due to COVID-19, we are again conducting the AGM entirely online. Hopefully, we can get together face-to-face next year. My name is Michael Reay, BlueScope's Head of Corporate Affairs for Australia, and it is my pleasure to be your host today. Firstly, a little bit about my background and where I come from. I was born in Goulburn in New South Wales, a little town probably best known for The Big Merino. My family moved to the Illawara when I was 6 months old. So I almost consider myself a local now. It's a beautiful piece of Australia, and it is Dharawal country. And the traditional custodians of the land are the Wodi Wodi people. Now the name Illawarra stems from the aboriginal name Illa or Eloura, which means a beautiful place by the sea. And then the suffix Warra represents mountain. Combined, Illawara means a beautiful place where the mountains meet the sea. As I said, Dharawal country is a wonderful place to live. And I'd like to pay my respects to the traditional owners of this land, the Elders past, present and emerging. Now before I hand you over to our Chairman, Mr. John Bevan, I want to cover some important procedural and technical housekeeping matters. Given we are holding our AGM online, we ask for your patience. If you have any technical issues, please refer to the virtual meeting online guide, which can be accessed from your screen. It contains all the information you need to know about how to vote and how to ask questions at today's meeting. If you have any trouble using the online platform during the meeting, please check the guide or call the help number shown on your screen for assistance. Now I'd like to cover off how to vote and how to ask a question. Firstly, to register to vote and get a voting card, click on the get a voting card box at the top or the bottom of your screen and enter your proxy number or shareholder number and postcode, and if you are outside of Australia, your country of residence. The Notice of Meeting contains information on where you can locate these numbers if you do not already have them. Once you have registered, to vote, click on the for, against or abstain voting buttons for the relevant items. Once you have completed your card, click on the submit vote button at the bottom of your screen. You may edit your voting card as many times as you like while voting is open. Secondly, how to ask a question? Well, there are [Operator Instructions] At the appropriate time, I will then read any online questions on your behalf to the Chairman or ask if there are any telephone questions. We will answer questions in accordance with the item of business to which they relate. If you are asking a question today as a representative of a particular organization or group, please include or say that at the start of your question. [Operator Instructions] To avoid duplication, if we receive a number of questions that are essentially the same, we'll do our best to aggregate these and broadly cover the issue raised by the questions. Of course, we do ask that all questions are asked in a respectful manner, in which all defamatory remarks will not be read out or responded to. In the unlikely event that we had experienced technology issues during the meeting, we may need -- if you are able, we will communicate this to you either verbally or by putting a notice up on your screen. If there is a significant technological issue, we may need to adjourn the meeting to have it to another time or date. If this occurs, please keep an eye on your e-mail inbox and our AGM website for updates and further details. We'll also lodge details on the ASX platform. Now with those procedural housekeeping matters out of the way, I'd like to welcome to the lectern BlueScope's Chairman, Mr. John Bevan. Welcome, John.

Thank you, Michael. Ladies and gentlemen, good morning. My name is John Bevan, and as your Chairman, it is my pleasure to welcome you to BlueScope Steel's Annual General Meeting for 2021, which is the company's second meeting conducted entirely online. We would have preferred to meet in person, but given the uncertainty regarding COVID-19 at the time of publishing the Notice of Meeting and the related potential health risks, like many listed companies, we believe this is the best solution given the current circumstances. Now as the necessary quorum is present, I declare the Annual General Meeting of Shareholders open. I am coming to you from Sydney, part of the spectacular Eora Nation. I acknowledge the Gadigal people as the traditional custodians of the land and pay respect to Elders past, present and emerging. Before we start the formal business of the meeting, let me introduce you to my fellow directors and management. Joining me in Sydney, beginning on my immediate right, is Ewen Crouch, the Chair of the Risk and Sustainability Committee; then Kathleen Conlon. On my immediate left is Jennifer Lambert, who's the Chair of the Audit Committee. And joining us from Melbourne are Mark Vassella, our Managing Director and Chief Executive Officer. On his immediate right is Rebecca Dee-Bradbury, Chair of the Remuneration and Organization Committee; then Tania Archibald, our Chief Financial Officer. Then on Mark's immediate left is Debra Counsell, who's our Chief Legal Officer and Company Secretary. I'd also like to assure you that those of us attending in the studios in Sydney and Melbourne are in compliance with the relevant state-based COVID regulations. Also joining us remotely is Mark Hutchinson, the Chair of the Health, Safety and Environment Committee. Finally, Mr. Glenn Carmody and Mr. Richard Bembridge from our auditors, Ernst & Young, are also joining us remotely. You will have had the opportunity to read the Notice of Meeting and accompanying explanatory notes that was released in October. I propose to take them as read. Thank you. There are a number of items of business on today's agenda, all of which are shown on the screen now. Voting on items 2 to 7 will be carried out by way of a poll. Mr. Daniel Reid of Link Market Services is the returning officer for today's poll. I will now formally open the poll on items 2 to 7. You may vote through the online portal at any time during the meeting starting from now. Voting will close 5 minutes after the end of the meeting. The results of the poll will be available later today on the ASX and on our website. We have received some questions in the lead up to the AGM. We will address these during the formal items of business for which they relate. [Operator Instructions] As Michael indicate, there may be a slight delay in transmission of up to approximately 20 seconds. So I encourage you to start submitting your questions now, and we will address these a little later today. [Operator Instructions] Now I will address the meeting, followed by our Managing Director and Chief Executive Officer, Mark Vassella; and then Rebecca Dee-Bradbury, the Chair of the Remuneration and Organization Committee. In these addresses, we will give a summary account of BlueScope's performance for the past year. I will then move on to the formal business of the meeting. Now for my address. Fellow shareholders, the directors and I hope that you continue to keep safe and well despite the disruptions in our normal way of life during the pandemic. Despite the massive disruption, the financial year 2021 was an exceptional year for BlueScope. With strong cash flow and a robust balance sheet, your company has thrived and is very well positioned to continue to grow and deliver value. This strong performance has continued into the current financial year, as shown by our market update on the 21st of October. And confirmed this morning that first half financial year 2022 underlying earnings before interest and tax or EBIT are expected to be in the range of $2.1 billion to $2.3 billion, subject to spread, foreign exchange and market conditions. BlueScope's financial strength allows the company to invest and grow our steel businesses, position the business for a low carbon future and deliver long-term sustainable earnings and shareholder returns. Turning now to safety. During the pandemic, while many BlueScope workers have been working from home, thousands more have remained at their operating sites and implementing new ways of working to meet the appropriate COVID-safe guidelines, and keep producing our products during the time of unprecedented customer demand. It is not surprising that this combination of factors in the workplace has presented many challenges for our people, and unfortunately, has contributed to a deterioration in our injury rates. Recognizing that we need to do more to improve, we have continued to evolve our overall approach to managing safety and to strengthen our HSE controls. This focuses on learning from the vast knowledge and experience of our people and giving them greater opportunity to help solve problems in their workplace, to find safer ways to work. All members of our Board and senior management teams have participated in workshops to engage in this innovative approach to workplace safety. Now in terms of climate. Taking action on climate change is critical to our success and the core element of our strategy. We see a strong long-term future for steel in a decarbonizing world, not only in the day-to-day applications that we're so familiar with, but in the arena of renewable energy infrastructure and sustainable transport technology. Your Board is very focused on positioning BlueScope to meet this long-term demand in a low-carbon world. Building on the work we began some years ago and demonstrating our intent to meet Paris Agreement goals, I'm pleased to report that BlueScope has made significant progress over the last 12 months. We have established a specialist climate change team led by Chief Executive Climate Change, Gretta Stephens, which augments the climate and energy capability already in our business. We released our first climate action report in September, a very comprehensive document that sets out our targets, goals and plans, and I commend it to you for your reading. We set a target in 2018 to reduce our Scope 1 and 2 emissions intensity of our global steelmaking operations by 12% by 2030. In meeting this target, BlueScope's Australian business will achieve a Paris Agreement-aligned 48% reduction in greenhouse gas emissions since 2005. As you know, we recently established our goal of net zero greenhouse gas emissions by 2050, covering operational Scope 1 and Scope 2 greenhouse gas emissions across our global operations. We recognize achieving this goal is highly dependent on several enablers, including the commerciality of emerging and breakthrough technologies, the availability of affordable and reliable renewable energy and hydrogen, quality raw materials and the appropriate public policy settings. We see a possible pathway for future low-emission steelmaking in hydrogen-based direct reduction of iron, which will then be melted in a renewable energy-powered furnace and fed into the steelmaking process. To progress investigation on this, in the last month, we announced a very exciting collaboration with Rio Tinto wherein a joint team of specialists will work together to research and design low emission initiatives for the steel value chain across iron ore processing, iron and steelmaking and related technologies. Practically, these breakthrough technologies may not be ready at technical and commercial scale for some time, which is why given the need for a continued reliable source of iron-making beyond 2026, we are progressing the assessment of the reline of the currently mothballed No.6 Blast Furnace at Port Kembla, including technologies that support greenhouse gas emissions intensity reductions and other environmental measures. The reline and upgrade program for the blast furnace is just part of a broader focus of using our financial strength to invest for sustainable earnings growth. In fact, we have a program of up to $1.7 billion of investments planned over the next 5 years, leveraging trends such as the growing preference for detached residential construction, e-commerce fulfillment and logistics and national infrastructure programs. The United States is a key focus for this growth strategy. At our North Star mini-mill in Delta, Ohio, the 850,000 tonnes per annum expansion project is progressing very well. We saw the first heat of steel from the new electric arc furnace in August. New equipment is being installed, and the team expects the first coil to be produced in the second half of this financial year with commissioning to full capacity over the following 18 months. The success of this project has led us to now assess the feasibility of a further debottlenecking project with the potential to lift hot strip mill capacity by another 500,000 tonnes per annum. Recently, Mark Vassella was able to visit the United States and see the progress on this exciting project firsthand. He will give you a more detailed update on it and our business activities there. He will also speak about our recent move to strengthen North Star's scrap supply arrangements by agreeing to acquire the ferrous scrap steel recycling business of MetalX. Also in the United States, up to USD 200 million in additional capital is being allocated to the BlueScope Properties Group to build the business and deliver more regular earnings from an expanded pipeline of projects. With a successful track record, this business has leveraged key trends in the United States industrial properties, in particular, the growth in warehousing and logistics and is closely aligned to BlueScope Buildings North American business. We are also looking closely at establishing a paint line in the Eastern United States, building on our know-how in this field. Meanwhile, in Australia, the residential construction market continues to grow and with increased demand for our branded products such as TRUECORE and COLORBOND steel. We are now evaluating investment in further coating capacity to support this demand. Turning to shareholder returns. Following review, the Board now intends to target annual ordinary dividends of $0.50 per share per annum, subject to prevailing conditions, including the financial performance, working capital requirements, and the Board's determination at the time. In financial year 2021, shareholders received a final ordinary dividend of $0.25 per share, plus a $0.19 per share special dividend, which complemented the $0.06 per share interim ordinary dividend paid in March. In addition, in August, the Board approved a share buyback of up to $500 million to be conducted over the next 12 months, dependent on factors such as prevailing market conditions and share price. We have made a good start in executing the buyback, having purchased $165 million of stock to date. Just one moment. We have a slight technical problem. Looking now at our Board, I'm delighted to say that Ms. K'Lynne Johnson and Zhi-Qiang Zhang will join the Board from the 1st of January. As more than half of our revenues and earnings now come from our international portfolio beyond our traditional markets of Australia and New Zealand, it is important that our Board reflect all the regions in which we operate and in which we will continue to invest and grow. K'Lynne, based in the United States, brings to the Board relevant experience in the areas of technological-led transformation, sustainability, renewables, human resources, customers and innovation. She also brings experience and insight in traditional high capital-intensive sectors. Zhi-Qiang Zhang has a background in blue chip manufacturing and product development, including industrial digitization and robotics, and brings to the Board a deep understanding of the China market and insights into areas of impact and growth. I would like to especially acknowledge the contribution of Penny Bingham-Hall. Penny retired from the Board on the 31st of October, having served as a director since 2011 though some of the -- through some of the company's most challenging days after the global financial crisis and into the more successful times of the last 5 years. The directors and I thank Penny for her invaluable service to BlueScope for nearly 11 years. She has been an outstanding Board member and Chair of the Remuneration and Organization Committee. We wish Penny well in her future endeavors, and I personally thank her for her support and friendship. These are clearly exciting times for us as shareholders of BlueScope. We have a high-quality asset portfolio, and there is a favorable long-term outlook for steel, especially given the critical role it will play in the transition to a clean energy future. We are seeing a range of opportunities for growth and success, particularly to take advantage of industry consolidation and rationalization in the United States. I thank my fellow directors and senior management for their continued support during the last financial year. Above all, I would like to recognize the resilience of all BlueScope people. Across our footprint, they have continued to live our purpose every day, maintaining COVID-safe workplace to meet customer demand and supporting those who need -- for those in need in communities particularly affected by the pandemic. Thank you. Again, we've got a slight technical problem. So just wait one moment, please. Ladies and gentlemen, I'd now like to ask BlueScope Steel's Managing Director and Chief Executive Officer, Mark Vassella, to address the meeting. Mark?

Thanks, John, and good morning. I join with our Chairman in welcoming all shareholders to our meeting today. I'm speaking to you today from the Eastern Kulin Nation, and I'd like to acknowledge the traditional custodians of this beautiful land, the Bunurong and Wurundjeri peoples. I join with my colleagues in acknowledging and paying my respects to Elders past, present and emerging, and to all First Nations people with us today on the call. As the Chairman's noted -- but first, as always, at BlueScope, I'll start by looking at our safety performance. As I highlighted at our full year results in August and again at our Investor Day in September, our performance on our lag indicators is not where we wanted to be, having deteriorated in recent periods after a longer-term plateau. Encouragingly, we're seeing an improvement in our injury profile with a lower proportion of injuries in recent years, having had the potential to be life-changing. Lag indicators are an important tool for us to report on our past performance, but they don't, in themselves, give insight into how hazards are being managed or the mitigation of risk exposures for our people. Consistent with the evolution of safety thought leadership, and like many of our peers, we're changing our focus to ensure the presence of capacity in our systems and processes rather than being driven by an absence of incidents measured by injury frequency rates. Core to this approach is our strong history of managing risks, but also acknowledgment that people can and do make mistakes. And so we need systems and processes to tolerate this error and build resilience to recover when things go wrong, without harming our people or the environment. Importantly, leveraging our inclusive culture, using the knowledge of our people who make and handle our products to understand the risks they deal with every day and design more effective controls sits at the heart of this shift to a human-centered approach to managing risks. As a key part of this evolution, we've had over 1,000 leaders from this group, including all of the Board and the ELT, attend our refreshed HSE risk management program. We've also focused on delivering team-based risk control projects completing over 400 in FY '21. These projects have focused our efforts where they're most needed, identifying risks and building capacity and systems and processes to reduce the potential of events to cause harm. Aligned with our new approach, we're continuing to evolve our leading indicators to focus on developing the risk management capability of our people and strengthening the controls for how we manage risks. I'm convinced that the new strategies that we have in place will improve performance over time. We're pursuing a lasting change in our performance, which requires a large-scale cultural shift to entrench our new approach. Also, we remain steadfast in our focus on managing COVID-19-related risks. We've been supporting our employees to get vaccinated, playing our part to protect our businesses, our people and our communities. Today, BlueScope reaffirmed the first half FY '22 earnings guidance provided on the 21st of October and gave an update on trading conditions across the business. Global steel prices, spreads and demand across key geographies have been strong with favorable conditions in building and construction end use segments. Looking at the performance across our portfolio of businesses during the current half year. Australian Steel Products is expected to deliver a significantly better result than the second half of FY '21 with strength in domestic volumes, particularly in higher value-add products for the building and construction sector and strong realized steel spreads. Margins and volumes in our downstream businesses are also benefiting from the robust demand environment. A stronger export coke contribution is expected with margins remaining robust. North Star is also expected to deliver a significantly stronger result than the second half of FY '21 driven by record steel pricing and spreads, modestly impacted by higher alloy and conversion costs, including labor. More recently, benchmark Midwest hot rolled coil prices have begun to ease back from the record high levels. The business continues to perform well and has been operating at full capacity as sales volumes to construction, manufacturing and automotive end-use applications remain solid. Importantly, the major expansion of North Star is on track for commissioning in the second half of FY '22. Building Products Asia and North America is expected to deliver a stronger result compared to the second half of FY '21 with elevated margins in the North American coated products business and seasonally stronger earnings in China. These stronger performances are being modestly offset by the impacts of COVID-related disruptions across Southeast Asia, particularly in Malaysia, Vietnam and Indonesia. Relative to the second half of FY '21, Buildings North America is expected to deliver a similar result overall. A softer performance from the core Engineered Building Systems business on margin compression due to higher steel feed prices is expected to be offset by a stronger contribution from the Properties Group. And New Zealand and the Pacific Islands is also expected to deliver a stronger result on the robust demand and pricing environment across construction and infrastructure sectors in New Zealand, notwithstanding supply chain COVID-19-related disruptions during the half. As flagged in the release of 21 October, BlueScope is seeing a further increase in net working capital employed in the business during the current half driven by a combination of higher prices and volumes. Since we launched our purpose last year, I've been incredibly pleased to see how our people have embedded it into the way we work. Conversations around our purpose are now commonplace at BlueScope and are helping us all to rally around common goals of delivering great solutions for customers and doing so in a way that strengthens our communities for the long term. Our bond remains a guide for our behaviors and keeps us focused on the stakeholders that matter the most, our customers, our people, our shareholders and our local communities. Turning to our strategic framework. In September, we held 2 comprehensive investor briefing sessions via webcasts providing an update on the company's strategy. The webcasts are available on the BlueScope Investors website, and I commend them to you for your viewing. These sessions were based on the 3 pillars of our strategy: transform, grow and deliver. We're seeking to transform in order to deliver a step change in customer experience and business performance, including through digital technology and our approach to climate change and sustainability. Our strategy will see us grow our portfolio of sustainable steelmaking and world-leading coating, painting and steel products businesses, creating new opportunities, anticipating and responding to local market trends. And we will deliver a safe workplace, an adaptable organization and strong returns, building a business capable of meeting the challenges of the future. We continue to make great progress in addressing the topics most material to ensuring a sustainable future for BlueScope. Over the last few months, we've outlined our approach to addressing climate change in our first Climate Action Report, along with updates on progress across material topics in our comprehensive sustainability reporting suite, also available on the BlueScope website. The Climate Action Report outlines our approach to addressing climate change, including our decarbonization road map and the allocation of up to $150 million over the next 5 years towards action on climate change. This investment will fund our technology plan to optimize current operating assets and to research and prepare for emerging and breakthrough technologies. The initial phase involves exploring production efficiencies, such as the increased use of scrap, indigenous gases and renewable energy as well as government and industry partnerships, collaborative opportunities with suppliers and breakthrough R&D projects. As the Chairman's noted, our collaboration with Rio Tinto to research and design low emissions processes and technologies for the steel value chain at the Port Kembla Steelworks is part of this investment program. In parallel with the exploration of breakthrough technologies, which may not be ready at a technical and commercial scale for some time, BlueScope is progressing its assessment of a reline of the currently mothballed No.6 Blast Furnace at Port Kembla with the goal that it will be ready to provide, when required, BlueScope's Australian iron making needs from 2026, until such time as breakthrough tehcnologies are commercially available. Work continues on refining the scope of included technologies that support greenhouse gas emissions intensity reductions and other environmental measures such as water and particular emissions management control for a full 20-year campaign life. Rather, it will underpin strong earnings and cash flow generation to provide the flexibility to adopt new technologies as and when they are technically and commercially viable and to ensure we continue to make a strong economic contribution to our local community in the Illawarra region and more broadly the Australian economy. We'll provide an update on the reline project at the release of our first half FY '22 results in February. Our FY '21 sustainability reporting suite was released in September and comprehensively sets out our approach to and progress against our 5 sustainability outcomes. This includes the creation of a new function, social impact and inclusion, which recognizes the company's increased social responsibility to our people, our workplaces and our communities. We continue to build an inclusive workforce, which reflects the diversity of the community's in which we operate. And this is guided by the company's inclusion and diversity strategic framework, which enables each business to tailor specific activities to suit their local community and business needs. We're also fostering responsibility and collaboration in our operations and supply chains as we aim to ensure our suppliers and our own operations are engaged in responsible business practices and are core to our future growth opportunities. As the Chairman's mentioned, I've recently visited our operations in North America from Steelscape on the West Coast, our buildings in North America, head office in Kansas city and our North Star BlueScope Steel mini mill in Delta, Ohio. Earlier this month, we announced our intention to purchase the ferrous scrap recycling assets of MetalX, the leading supplier of scrap feed to North Star. This acquisition adds to our extensive U.S. asset footprint of over AUD 3 billion, which spans steelmaking, steel coating and painting, engineered building systems and industrial property development. And expansion projects underway and planned total an additional $1.5 billion. This upstream investment in the scrap supply business helps underpin North Star's supply chain and its great competitiveness. North Star will soon move from a 2 million tonne per annum mill to almost 3 million tonnes. And as the business expands, securing scrap supply is the right move to make. MetalX is the largest of North Star's diverse scrap steel suppliers, currently supplying around 20% of the scrap used. The acquisition brings us a crucial presence and expertise in scrap processing to further secure our prime and obsolete scrap needs. Further, the MetalX ferrous acquisition will enable North Star to quickly improve the quality and quantity of obsolete scrap it uses and reduce the mix of prime scrap. As North Star is a steel recycling electric arc furnace producer of hot rolled coil that uses low emissions electricity, it is highly carbon efficient. This acquisition further improves BlueScope's sustainability profile by bringing in-house part of North Star's scrap collection. Other growth opportunities include the investigation of additional metal coating capacity in Australia to support the continued strength in demand for our value-added branded products such as COLORBOND and TRUECORE steel, along with the upscaling of the BlueScope Properties Group and the investigation of the establishment of painted capacity in the Eastern United States. While there's a lot of activity across the organization, we remain committed to delivering the essentials such as a safe workplace, an adaptable organization and strong returns. Whilst there's no doubt that BlueScope has seen favorable macroeconomic and industry trends over the last year, the result is also thanks to the very difficult decisions made over the last decade and the robust frameworks with which we manage the business, particularly our financial framework. With a focus on returns, ensuring a robust capital structure and a disciplined approach to capital allocation, BlueScope has the capacity to both invest in future sustainable earnings and growth whilst providing meaningful returns to our shareholders. In conclusion, financial year '21 was an incredible year for BlueScope as we demonstrated the value that our high-quality portfolio of assets is capable of generating. I'd like to thank our entire 14,000 strong team who have worked with energy, agility, resilience and empathy for each other and their communities through very challenging circumstances. And finally, I'd like to thank you, our shareholders, for your ongoing support. Thank you.

Thank you, Mark. Ladies and gentlemen, I'd now like to ask Rebecca Dee-Bradbury, the Chair of the Remuneration and Organization Committee, to speak to you about some of the key issues addressed by the committee during the past year. Rebecca?

Thank you, Chairman, and good morning, ladies and gentlemen. In 2018, BlueScope introduced a remuneration framework designed to align executive remuneration outcomes with the value delivered to shareholders across the cycle. The framework drives executives to focus on the financial fundamentals and is intended to deliver more value to executives at less cost to shareholders. It is characterized by fixed remuneration slightly above the market median and relatively conservative variable reward that combines challenging annual targets in the short-term incentive or STI and reward for delivering of sustainable long-term returns in the alignment rights. The threshold level hurdles under the alignment rights mean that the plan is expected to vest more often than other more common LTI designs in the market. And accordingly, the quantum of the award is set much lower than the peer group median. When the remuneration framework was introduced, total remuneration for maximum performance was reduced by 41% on the previous framework. This design is intended to deliver outcomes to executives that are aligned with shareholders regardless of where we are in the cycle. And both 2020 and 2021 have been good stress tests of this theory. As flagged to you in the AGM last year, in 2021, we temporarily changed our approach to setting STI targets, reflecting the uncertainty prevalent at the beginning of the year. Accordingly, financial targets were set early in the year for the first half, and targets for the second half of the year were adjusted upwards to reflect the updated annual outlook in February 2021. Safety and individual strategic objectives were set for the full year. At the end of the year, the Board took a holistic view of individual business and group performance to ensure that the awards were reflective of the business performance for the year. The actual STI awarded to the Managing Director and CEO, Mark Vassella, and other key management personnel, or KMP, was 96.7% of the maximum opportunity or 145% of the 150% target. While there were some individual variations between KMP and performance against individual objectives, consistent strong financial performance across all business units resulted in no individual differentiation in the final awards. As the Chairman noted earlier, our total recordable injury frequency rate, or TRIFR, fell short of the level required to meet the threshold level and the Board applied their discretion to reduce the STI awards down from 100% of the maximum to reflect the safety component that was not achieved. This represented a reduction from 150% to 145% of the target opportunity. In FY 2019, long-term incentive or alignment rights vested in full in September. For the 3-year performance period, we achieved an average ROIC of 18%, excluding capital spending relating to the North Star expansion, exceeding the threshold of 10%, and an average net debt to EBITDA ratio of negative 1.8x over the same period, again, exceeding the threshold of less than 1x. Effective 1 September, the Board approved a 5% increase in fixed pay for our CEO, Mark Vassella, the only increase he has had since his appointment in 2018. My fellow nonexecutive directors and I believe that the reward outcomes for the KMP across the fixed and variable elements of our remuneration structure appropriately reflect the exceptional performance of our management team in capitalizing on the strong market conditions to deliver significant value to the business and shareholders during FY 2021. I would now like to refer you to items 4 and 5 in the Notice of Meeting, which deal with the approval for a grant of share rights to the Managing Director and CEO for his short-term incentive and alignment rights. Item 4 relates to the share rights under the FY 2022 STI plan. Executives can elect to take their STI in shares or cash or a combination of both. Mark Vassella has again elected to take all of his FY 2022 STI in shares. The shares or a proportion of the shares will vest at the end of the financial year based on the performance against the objectives set by the Board. These include threshold, target and stretch objectives for financial, ESG and safety performance as well as the delivery of strategic initiatives. Specific measures and performance against them will be disclosed in next year's remuneration report. The Notice of Meeting outlines the terms and conditions of this award, and together with my fellow nonexecutive directors, I recommend that you approve this item. Item 5 in the Notice of Meeting relates to the approval of the alignment rights to Mark Vassella for FY 2022. Consistent with the plan that has been in operation since 2018, the FY 2022 alignment rights have a threshold return on capital measure, a maximum debt hurdle and an individual behavior gateway of adherence to our company values. The return on capital measure is set at a level which achieves our weighted average cost of capital, top quartile performance compared to major steel companies and median performance compared to the ASX 100. If each of the performance conditions are met, all of the alignment rights will vest. And conversely, if they are not achieved, none of the rights will vest. There are no retesting provisions under the plan, and as always, the Board retains overarching discretion to protect against unintended outcomes. Again, the Notice of Meeting outlines the terms and conditions of this award, and I recommend that you approve this item. In response to shareholder feedback and to reinforce our focus on safety, we have made some changes to the weighting of measures in the STI scorecard for FY 2022. We have increased the total weighting allocated to safety from 5% to 10%. As the Chairman has already highlighted, our health, safety and environment evolution continues with a focus on adopting and embedding a human-centered approach. Under the STI, safety will continue to be measured through a combination of lagging indicator, TRIFR, and 2 leading indicators: safety leadership and delivery of HSE or health, safety and environment risk control projects. The gateway of no fatalities continues to apply to the safety component of the scorecard, with the Board retaining the discretion to adjust overall STI outcomes in the event of a serious incident. This combination of objectives focuses management on risk and building capability in our people, to ensure we never lose focus on health, safety and well-being for our employees, customers or communities. Sustainability remains a key area for the business. And from FY 2022, all executive KMP will have 15% allocated to the key ESG priorities in addition to the 10% on safety. All executive KMP will have a reduction in steelmaking Scope 1 and 2 greenhouse gas emissions intensity, a climate change objective specific to their business or functional area, and an increase in gender diversity and recruitment for all roles included in their objectives. Finally, in FY 2022, the strategic or individual objectives for each of the KMP have been set to drive our focus on key enterprise objectives and encourage collective leadership across our key growth areas, particularly cybersecurity, digital transformation, organizational capability, talent and succession. In FY 2022, we have reverted to our usual approach of setting financial targets for the full year. The Board will continue to review STI outcomes at the end of the year in the context of a range of internal and external considerations to ensure that the awards for executives appropriately reflect performance. Finally, I would like to comment on our progress towards inclusion and diversity objectives. This year, we have continued to build a workforce which reflects the diversity of our communities in which we operate. BlueScope is now a signatory to the HESTA 40:40 Vision and is committed to achieving and maintaining a 40:40:20 gender balance in the executive leadership by 2030. We are proud that we have already reached the 40:40 Vision target of 40% women in our executive leadership team and the Board of Directors, and our female workforce participation is growing each year. Women currently represent 22% of our workforce, up from 16.5% in 2016. While we are proud of our inclusive culture today, we know that there is always more we can do. We will continue to extend our diversity focus beyond gender, including disability, race, sexuality, First Nations and diversity of experience, thought and opinion. Together with my fellow nonexecutive directors, I would like to thank you for your ongoing support and recommend that shareholders vote in favor of the remuneration report. Thank you.

Thank you, Rebecca. I will now turn to the formal business of the meeting. Before opening up the discussion on today's items of business, I want to mention quickly a few procedural matters. As mentioned earlier, voting on the relevant items of business is by way of a poll. As shareholders are aware, no formal vote is required on item #1. As I mentioned earlier, the poll on the remaining items 2 to 7 is now open, and you can cast your vote at any time by clicking on the get a voting card box on your screen, entering your proxyholder number or your shareholder number and postcode or country of residence if you are outside of Australia, clicking on the for, against or abstain voting button for the relevant items and then clicking submit vote. The proxy position on each relevant item will be displayed after the specific discussion on that item. So to facilitate discussion and voting, I will formally put on the meeting each item of business in the terms set out in the notice. There will also be plenty of time after discussion of these items of business to complete and submit your vote. As indicated in the Notice of Meeting, I intend to vote valid undirected proxies given to the Chairman in favor of items 2 to 7. While all the items are now formally before the meeting, I propose to step through the specific discussion on each item in turn. So let's now turn our attention to item #1, which is to receive and consider the annual report, financial statements and reports of the directors and the auditor for the financial year ending the 30th of June 2021. Shareholders and proxyholders are entitled to ask our auditor questions relevant to the conduct of the audit. As mentioned earlier, Glenn Carmody, a partner of Ernst & Young, our auditor, is available to answer any such questions. I am advised that no questions for the auditor were received prior to the meeting. This is Glenn's last engagement as our lead audit partner, having been our lead audit partner for 5 years. On behalf of the Board and management, I'd like to thank Glenn for his professionalism and diligence. [Operator Instructions] Before I take any live questions, I note that prior to the AGM, we received several questions and comments from shareholders. We thank you for your input, which have been considered. Several of these questions related to our approach and progress on addressing climate change. I've addressed these matters in my remarks, and further information can be found in our recent disclosures that cover the topic extensively. Specifically, I commend you to our climate action report, the webcast of our September Investor Day and the recent media release covering the memorandum of understanding established with Rio Tinto to explore low carbon steelmaking technologies. All of these resources are available on the BlueScope website. Now Michael, have we received any questions?

Yes. We've got a number of questions online, Mr. Chairman. So the first one from Stephen Mayne. Did any of the 5 main proxy advisers in the Australian market, the ACSI, ASA, Ownership Matters, Glass Lewis and ISS, recommend a vote against any of today's resolutions? Which of the proxy advisers are covering us? And has there been a material proxy vote against any of today's resolutions? And will you disclose the proxy votes before the debate on today's resolution so shareholders can ask questions if there had been any protest votes?

Stephen, thank you for the question. And as you know, the various proxy advisers are a subscription service between their members and the proxy service. So that's a confidential thing between them and their shareholders. So even though if I knew what they are, I don't think it's appropriate for me to disclose them. Your second question, which relates to putting the proxy votes up prior to the voting of our shareholders in the meeting here. We believe it's appropriate that shareholders can make their comments without seeing what the other results are so that they can participate in the process.

We've got another question here from [ Peter Kokich ]. Net zero is urgently necessary, but it implies that not only does fossil fuels need to be excluded from all energy supply chains, but coking coal needs to be replaced with an alternative reducing agent that does not promote global warming. This is now urgent and disruptive because decades of warnings have been ignored. Other steel producers seem to be reacting now. Is BlueScope well positioned to thrive in a world that will be livable for our children and grandchildren?

Thank you, [ Peter ], and thank you for continuing to take interest in the AGM. You've seen many indications from BlueScope that we were an active participant in driving to net zero by 2050. And Mark's covered in his speech and in my speech the various items that we are taking. And I'm sure that you will have taken the opportunity to read some of those items on our website. This is a very important issue, and BlueScope takes this very seriously, and we are actively working to drive our emissions down.

A follow-up question from Stephen Mayne. BHP spun off 2 steel businesses almost 20 years ago, BlueScope and OneSteel/Arrium. The latter went broke, and we have boomed so much so that our market capitalization is now $10.3 billion. Could the Chair and CEO briefly give their comment on how such divergent outcomes were delivered by BHP's 2 steel industry children?

But I don't think it's inappropriate for me to comment on the OneSteel/Arrium position at all. All I would say is that BlueScope went through its own crisis after the GFC when conditions were very difficult for us. And thanks to our shareholders, we are able to recapitalize and go on. I think you can see by not just our great profit results, but the strength of our balance sheet reflects the conservatism we have about ensuring that when the cycle turns against us, and it always will, that we have a strength to ride out the difficulties in the marketplace. It's an important area for the Board and for management to ensure that we have a strong balance sheet to ride out whatever happens.

Another question from Stephen Mayne. Why didn't we tap the widely [ rated ] $88 billion JobKeeper program like 474 other ASX-listed companies. All you had to do was forecast a drop in revenue, not actually suffer a drop. This was one of the world's most lax, open and abused corporate support schemes. Please explain why we didn't get in on the road to maximize returns to shareholders and did we explore applying.

Well, unlike many other companies, BlueScope is largely able to continue to operate throughout COVID-19. And because we could operate and continue to service our customers, we didn't think it was appropriate even for areas which were shut down to claim the JobKeeper. All BlueScope employees in Australia have continued to operate throughout the pandemic.

A question from Michael Muntisov. What are the opportunities and threats to BlueScope of Fortescue Future Industries?

Well, first of all, I'd say that -- I mean, it's inappropriate for us to talk about another company in this way. But I think what Andrew Forrest has been doing is to ensure that the issue around the hydrogen supply to many industries is maximized and including hydrogen use for the use in making iron is part of the steel making process. I think his drive and energy is actually a very good thing to ensure that Australia and other countries move quicker on the issue of hydrogen supply. Hydrogen is a very difficult product to both make and distribute. And there are a lot of technology issues that need to be addressed. And I think by his positive nature of what he's doing, that will help everybody in the process.

And a follow-up question from Michael Muntisov. The Australian Shareholders' Association strongly encourages companies to trial hybrid AGMs. What is BlueScope's plan for the 2022 AGM assuming physical meetings are possible?

Our intention would have been this year and certainly for next year is that when restrictions are fully fall away, we will have a hybrid meeting based in Port Kembla that will enable shareholders to attend but also for the positive aspects of having a hybrid meeting of allowing shareholders to come in on the telephone or answer questions via the web. So I think the hybrid model is probably the model of the future. We certainly want to have our shareholders present in the room, but we also don't want to deny those who can't make it on the day either for health reasons or they live in another state or whatever to participate in the process.

Another question from [ Peter Kokich]. How is BlueScope going to keep competitive with climate-friendly technology in view of our government's backward approach?

The steel industry -- outside of any government approach here, the steel industry needs to resolve a technology issue to enable us to make steel going forward. Our focus is on working on those technologies and ensuring that we have availability of raw materials and so forth. The policy settings of government are important, and they are to encourage us to move as quickly as we can. And whether it's one side of politics or the other, we believe that the future settings of government is actually important to encourage us all to keep going. But from a BlueScope perspective, the Board of Directors here want us to progress the agenda of getting to net zero by 2050 as quickly as we can.

And another 1 here from [ Peter Kokich ]. The U.S.-China agreement appears to leave Australia in an outdated bypassed backwater unable to export except to other [ account-centric ] nations. Is BlueScope happy to compete on world markets with export cost commensurate with Australia's role in climate negotiations? Or will it use its considerable influence to support its and our survival instead?

Well, [ Peter ], I think BlueScope's strategy has evolved to being a significant supplier in the geographies where we supply. So we're a local supplier. We're not focused on export. And in all the geographies where we are, we are looking to build our position from there. We're not trying to be a significant exporter at anymore. I know that was part of the BlueScope life for many years, but we are much more focused on maximizing our position in each domestic market.

And 1 more from [ Peter Kokich ]. Has BlueScope factored in potential climate tariffs on Australian steel and steel products are rising given the government's lackluster performance in climate policies and emissions reduction?

Well, as I said, [ Peter ], the -- we are largely a domestic producer. And the degree to which there are tariffs introduced in individual countries, given that we're a domestic producer, we should not be affected by those.

And a follow-up from [ Peter ]. Will furnaces and combustion and other processes need to be reviewed to get a green steel badge?

I think the whole process of making iron, in particular, will need to change over time. And the implications for the downstream parts are not set at this point. It depends which technology ultimately wins out. So I think we can't really answer that yet, [ Peter ].

Another question here from [ Harriet Peter ]. Is BlueScope still lobbying the New South Wales government to overturn its rejection of South32's Dendrobium metallurgical coal mine extension, even though this extension poses a significant threat to Sydney drinking water? And is that odds with the IEA's net zero by 2050 scenario? What implications does sourcing metallurgical coal from existing Queensland coal mines have for the business?

The South32 supply is an important supply to the steelworks, and we wish that to continue. We're not doing any proactive lobbying on behalf of South32 with the government. Our position is that, that is our preference because of transport economies that we get from a local supplier in the Illawarra. Should that stop, then we have other sources that we can draw from. But we have a contract with South32, and we actually want South32 to be able to fulfill that contract.

A follow-up question from [ Peter Kokich ]. When was the BlueScope guide to business conduct last reviewed?

It was reviewed at the Board, in fact, in this Board meeting that we just completed in the last few days. It's a -- code of conduct is a really important element of our procedure to drive through the values that we all expect our employees and our suppliers and so forth to adhere to. So this is something that the Board actually reviews on a frequent basis and, in fact, was reviewed in the Board meeting in the last couple of days.

Question from Michael Muntisov. The Australian Shareholders' Association would like to clarify that it is not a proxy adviser. ASA prepares a voting intentions report and the votes -- and vote the undirected proxies it received accordingly. It makes no recommendations on voting.

Thank you. That's noted.

Another question from [ Peter Kokich ]. What is BlueScope doing to ensure that sexual harassment and bullying does not rear its ugly and often seemingly random presence? What is the Board, the Chairman and the MD prepared to commit to, to protect employees?

It's interesting that you raised that today, [ Peter ]. In fact, the Board, in this last couple of days, has also had a presentation made to it by the sexual discrimination Commissioner to inform us of the latest research that's been done in this area to inform the Board in terms of what policy settings we need to have. So this is an area where we monitor and receive complaints from time to time, and we actually action those, and they come to the Board for review. But there are many, many sexual harassment cases in the community never get reported. And we need to ensure that we maintain a safe environment for all of our employees wherever they are working and give them the confidence to raise the topic if they feel they have been harassed. So this is an area which the Board takes a direct interest in.

And a follow-up and related question from [ Peter Kokich ] on that topic. Is the Board and Mr. Vassella's assessment, is the code of conduct effective and working?

Well, as I just said, we've reviewed it in the last couple of days in terms of the number of complaints, how the complaints were settled or actions that were taken. So I think the existing policy that we have is effective, but we continue to review it to ensure that people are confident to speak up and that they are confident that management will take action if people don't honor the values of the organization.

And another related question from [ Peter ]. How many whistleblowers have come forward since the AGM? I'm assuming you're talking about last year's AGM, the last 12 months?

I actually don't have that number in my head. It's more than 10, I can say that. And there've been a number of complaints across our 14,000 people in the organization. And as I said, in the last few days, we've actually gone through each one of them and looked at the actions that were taken to make sure that they were appropriate.

There are no further questions online at this time. Are there any questions via the telephone?

Yes, Mr. Chairman. We have a question from the line of [ Jan Nichols ].

BlueScope's assessment against the Climate Action 100+ net zero benchmark makes for some pretty grim reading with none of the 10 metrics met in full and only 3 partially met. Most concerningly, BlueScope's current medium-term emission reduction target is not aligned with Paris Agreement's goal of limiting warming to 1.5 degrees centigrade, and there are no short or long-term emission reduction targets and the company has not commenced to align its capital expenditure plans with the Paris climate goals. With such little progress 4 years into the 5-year long CA 100+ investor initiative, what escalation is BlueScope likely to see from investors? Can we expect to see institutional investors lodging shareholder resolutions voting against directors or the remuneration report or divesting from BlueScope?

Well, look, thank you for the reference to that particular report. But I think both in my speech and in Mark's, we referred to the statement we made on climate in September and the initiatives that we've undertaken in terms of the MOU with Rio Tinto, et cetera. And as I said in my speech, if you measure the Australian emissions against the Paris accord of 2005 as the baseline, we've reduced our emissions if we achieve them by 2030 by 45%. We're not resting on our laurels here. We're actually working. We've issued a very clear statement about the items that need to occur for us to be successful in getting to zero emissions, and we're working very hard at doing it. One thing I can say is I'd like you to go to our website and look at the material that's there. And I think relative to the Climate 100 report, you'll see we've made considerable progress. Thank you.

Are there any further questions on the telephone?

So we do not have any further questions.

As there appears to be no further questions or comments on this item, that concludes the discussion on this item. There is no vote on item #1. We will now focus on item #2. This item includes a nonbinding resolution to adopt the company's remuneration report. You've heard from Rebecca Dee-Bradbury, the Chair of the Remuneration and Organization Committee, in relation to this resolution. Each director recommends that shareholders vote in favor of this resolution. [Operator Instructions] Prior to the meeting, we received several general questions regarding executive performance and our remuneration structure. These questions have been addressed during the remarks made earlier by Rebecca, and more information on our structure and our FY 2021 executive performance and remuneration can be found in our financial year 2021 annual report available on the BlueScope website. Michael, have we received any questions on the remuneration report?

Yes. There's one question online here, Mr. Chair, from Michael Muntisov. The current remuneration plan was developed in 2017. The rationale for the plan at the time made sense. However, many of its key objectives have now been achieved, and the company and its balance sheet have evolved significantly. When will BlueScope undertake a comprehensive review of its remuneration plan to ensure it is still fit for purpose?

Thank you, Michael. And look, Michael, the Australian Shareholders' Association, we've met with them prior to the AGM and discussed this at that time. The current remuneration structure, as Rebecca indicated in the -- in her presentation was designed so that through the cycle, BlueScope executives would be rewarded against the longer-term activities for which we actually want them to do. The discussion about climate change, for example, is a very long-term capital allocation question. And because we want executives to make the right capital allocation decisions for the long-term benefit of the business, we have designed the remuneration system to ensure that through the cycle, we can attract and retain good executives and develop new executives to come through. We believe the current structure is working very well for us and is widely supported by shareholders.

There are no further questions on our online platform at the moment. Are there any questions on -- from telephone participants?

Yes, Mr. Chairman. We have a question from the line of [ Sally Moffat ].

Yes. Actually, this is not actually about the remuneration. I meant to ask it in the last section. The question is this, given that Europe is expected to have carbon-neutral green steel commercially available by 2026, that the price of carbon will only increase over the coming decades and that there is expected to be a tidal wave of demand for green commodities, what are your reasons for choosing to bring the Port Kembla blast furnace No. 6 reline forward when postponing the decision would more closely align the asset investment cycle with the emergence of viable low-carbon technologies, allow for a fast and complete pivot to green steel, avoiding the high risk that the relined blast furnace will be an $800 million asset stranded at the beginning of its life. In other words, you used to do fast and furious blast furnace relines. Why not hold off on the decision to reline the blast furnace for as long as possible to reduce the risk of having a stranded asset?

That's an excellent question because the technology of making steel from a blast furnace, green steel from a blast furnace, technology is really not available at the moment. You could make green steel from an electric arc furnace as many -- where they exist around the world. And where that -- but in Australia, we have the issue of having not enough scrap to be able to run electric arc furnace and meet the demands within Australia. So it's just technically not viable. So there's a lot of work going on to look at how you can convert the 80% of steel that's manufactured in the world today, which is in a blast furnace, to new technology. And we're working hard on that with Rio Tinto. And you saw our announcement recently and a whole raft of other initiatives, as are most of the other steel companies around the world. The issue about the reline is, this is a no-regrets decision for us because by investing in a reline today, we can test a lot of the new technologies that are coming through, including the use of hydrogen in the process, to ensure that we understand how to apply that when the technological breakthrough comes through. We also have a project about generating hydrogen on-site to ensure that we have a supply and understand all the supply dynamics of hydrogen. So we're actually testing out testing technology in the reline. If the new technology came through in 2028, 2029, and we had actually done the reline, it would be a no-regrets decision, because by underpinning the existing business and the cash flows that come from a relined blast furnace, we can afford them to move to whatever the new technology is at any time after about 2029, 2030. So yes, it could be a stranded asset, but the underlying cash flows of the business are critical to be funding whatever that new technology will be. So from a Board perspective, we are underpinning the risk of the technology change not coming in time before that reline is due. And the maximum time we could actually extend the No. 5 blast furnace is only to 2029. So we just need to make a decision now, learn of the new technologies that we can apply in the reline and work with others to ensure that we actually have a long-term solution. Thank you.

Are there any further questions on the telephone related to the remuneration report item?

There are no questions in the queue, Mr. Chairman.

Well, as there are no further questions or comments on this item, that concludes the discussion on this item. There are voting restrictions which apply to this item, which are detailed in the Notice of Meeting. Before moving on with the meeting, the details of the proxies validly lodged with the company in relation to this item are shown on the screen. We'll now focus on discussion on the next agenda item. Item #3 relates to the proposed reelection of Mark Hutchinson as a director of the company. Mark was appointed to the Board in October 2018 and was elected in November 2018. Mark's details are set out in the Notice of Meeting. I'd like to confirm that the rest of the Board unanimously recommends to shareholder's Marks reelection. We will now hear from Mark on his candidacy. As Mark currently is overseas, his address was recorded earlier to avoid any technical issues. However, Mark is onlie and available to answer any questions. Mark?

My name is Mark Hutchinson, and I'm seeking reelection for the Board of Directors at BlueScope after my first 3-year term. It's been an honor and a privilege to be on the board of BlueScope for the last 3 years, and I've really enjoyed my time working with the board and also with the executive team. It's been an amazing 3 years if you think about it, not only with the response to COVID but also just to see how the markets have reacted and how well the steel industry has performed, and particularly BlueScope during this time. I must admit, the company has performed extremely well, in my view, during this time and I commend them for a great result. We find ourselves in a very strong financial position because of that. And it's been a pleasure to see how the company started to pivot into different areas. I think if I look bat at my last 3 years, I'm particularly proud of the company, the way it's executed on the North Star expansion. They've done a phenomenal job there, and watching them has been a real pleasure for me. Also, I think the response to climate change and the net zero initiative the company has, I'm extremely excited about what the company is doing in that regard, and I'm going to work really hard with the company to make sure that we continue on this journey and this path together. So I'd like to seek reelection for the next 3 years as a Board of -- on the Board of Directors at BlueScope and offer my self up for nomination. And it's been my pleasure, as I said, to work for the last 3 years, and I look forward very much to working with BlueScope for the next 3 years. Thank you.

Thank you, Mark. Michael, have we received any questions during the meeting on Mark's reelection?

Yes. We've got one question online from Stephen Mayne. Treasury Wine Estates has voluntarily moved to annual elections for directors in line with best practice that occurs in both the U.S. and the U.K. Dual-listed companies like News Corp, BHP and Rio all do this due to the laws in the U.S. and U.K. What does Mark Hutchinson think about this idea? And could the Chair comment on whether BlueScope will consider following suit to lead by example on governance by being more regularly accountable to shareholders?

Thanks, Stephen, for that question. And look, this comes up from time to time as to whether we should move to annual elections or not. I don't think we have a lot to fear from that sort of movement other than the fact that to plan the Board and how the Board gets developed over time in terms of its knowledge and memory of what's actually going on in the business requires planning. And you want continuity of directors to ensure that knowledge gets transferred from existing directors as new directors come on. Potential disruption of going to an annual election could be significant, and that may lead to significant numbers of directors in any one occasion not being reelected. And that just causes disruption to the overall process. We believe that the 3-year cycle is perfectly adequate in our jurisdiction. But if the rules change, then we'll adapt to whatever those rules are.

There are no further questions online, Mr. Chairman. Are there any questions via telephone?

We do not have questions on the telephone line, Mr. Chair.

As there appears to be no further questions or comments on this item, that concludes discussion on this item. Details of the proxies validly lodged in relation to this item are displayed on the screen. And based on the proxies received, I'd like to congratulate Mark on his reelection. Well done, Mark. We can now turn our attentions to items 4 and 5. These items relate to the grant of share rights under the company's short-term incentive plan and alignment rights under the company's long-term incentive plan, respectively, to the company's Managing Director and Chief Executive Officer. The Notice of Meeting sets out the details of these proposed awards to Mark. Rebecca, in her earlier comments, spoke about the company's approach to remuneration issues, including company's short-term and long-term incentive plans for the Managing Director and Chief Executive Officer and other key management personnel. The directors, other than Mr. Vassella, unanimously recommend that shareholders vote in favor of these resolutions. Michael, have we received any questions on either of these resolutions?

There's no questions online, Mr. Chairman. Are there any questions via telephone?

We do not have any questions on the phone line, Mr. Chairman.

Okay. So there appears to be no questions or comments on these items. That concludes the discussion. Details of the proxies validly lodged in relation to each item are displayed on the screen. Now item #6. The company is seeking a further approval for the exemption from the 12-month termination payment cap provisions for a 3-year period. 2018, the company obtained a similar 3-year approval, which expires at this AGM. Approval preserves the discretion of the board to determine the most appropriate termination arrangement for relevant persons, and that's as specified in the Notice of Meeting, in accordance with their individual employment agreement and incentive plan rules but does not guarantee that such a person will receive termination benefits in excess of the cap. The directors, with Mr. Vassella abstaining, unanimously recommends that shareholder's vote in favor of this resolution. Michael, have we received any questions during the meeting?

We do have one question that is partly related from Steven Mayne. When disclosing the outcome of all resolutions today, including this termination benefits proposal, will you publicly disclose how many shareholder's voted for and against each item similar to what happens with the scheme of arrangement? This will provide a better gauge of retail shareholder sentiment on all resolutions an was a full disclosure initiative recently adopted by Metcash and Southern Cross Media after their AGMs.

Steven, look, we haven't even -- we haven't actually discussed this is an option. In the scheme of arrangement, that is a requirement of the -- of that scheme to make it work like that. In a normal AGM, it's just the number of votes that count, and that's what we will disclose.

There are no further questions online. Are there any questions on the phone?

We do not have any questions on the phone line, Mr. Chairman.

Okay. As there appears to be no further questions, that will conclude the discussion on this item. Details of the proxies validly lodged in relation to this item are now displayed on the screen. This brings us to the final item to be discussed today. The company's constitution limits the maximum number of directors to 10. In the lead-up to the 2025, there will be a number of directors retiring and new directors will be identified and appointed. As mentioned in my address earlier, we recently announced the appointment of Zhi-Qiang and K'Lynne commencing on the 1st of January. Accordingly, to assist in an orderly transition and to facilitate the transfer of corporate knowledge, the Board considers it is appropriate to temporarily increase the maximum number of directors from 10 to 12. At the 2025 AGM, this number will automatically revert back to 10. The directors unanimously recommend that shareholders vote in favor of this resolution. Michael, have we received any questions during the meeting?

Yes. We do have a number of questions on this item, Mr. Chairman. One from Stephen Mayne. Given the interesting discussions across a range of topics today, including this Board size proposal, could the Chair undertake to make an archived copy of the webcast plus a full transcript or proceedings available on the company's website. Nine Entertainment Chairman, Peter Costello, who appreciates the benefit of a parliamentary hands-on transcript where NPs don't have to scroll through all videos to find out what was said, made this change last week and had a full transcript of 9 AGM online before the end of the day.

Well, let me just say that I think that all shareholders have the opportunity to attend the AGM and hear what happened today but recognize that some can't do that on the day. We provide our webcast for them to listen and go through what was discussed in the way it was intended on the particular day. We don't think there is a need to provide a full transcript at this point.

Another question from Michael Muntisov. After the recent appointment of 2 new overseas-based directors, there will be still 1 open slot available on the BlueScope Board after the AGM. The vast majority of ASX-listed company boards manage succession planning without the need for a special request to increase board size. What is different in BlueScope's case that requires an increase in director numbers?

This relates to the fact that there were a lot of us came on to the Board immediately after the GFC as the Board was renewed at that time. So there's a number of directors who will actually be standing -- or finishing the 3 terms over the next 3 years or so. Those directors have significant knowledge of both the difficult times of the company and the more fruitful times we're enjoying today. That knowledge needs to be transferred to the new directors. And we believe an adequate overlap between new directors and old directors is important to transfer the understanding of how this business works. We're a cyclical industry, and understanding the good times and the bad times is an important element of Board's effectiveness. And therefore, we think the adequate overlap is important. Because we have a number that are actually coming up for retirement in the next 3 years, we need to ensure at least 12 months handover between the director who's retiring and the new director that comes on. And hence, the short-term nature of the increase from 10 to 12.

And a related question from Stephen Mayne. The current constitution limits the maximum number of directors on the Board to 10, and this proposal increases the maximum to 12 until 2025. Why not instead follow the Rio Tinto model and have no maximum or be like BHP with a maximum of 20? What is wrong with having a constitution that gives shareholders maximum flexibility on board size rather than directors hiding behind low board size caps as an entrenchment technique. Shareholders should be able to change Board control at a single AGM without removing directors.

Well, what I'd say to that is that the optimum size for an effective Board is 10 or less, frankly, to ensure that all directors have the ability to understand the business but also to engage and make decisions on what needs to be done. Very large boards tend to be bureaucratic and tend to be less effective in decision-making. So your Board feels that the size of the Board at a moderate level of 10 is the right number.

That's all the questions online from item #7. Are there any phone questions?

We do not have questions on the phone line, Mr. Chairman.

Okay. As there appears to be no further questions or comments on this item, we conclude the discussion on it. Details of the proxies validly lodged in relation to this item are displayed on the screen. Ladies and gentlemen, we have now dealt with all the items of business in the Notice of Meeting. But before I move on, Michael, have we received any further questions related to any item of business?

Yes. There's just 1 last question come through online from [ Peter Kokich ]. A colleague earlier this year sent an email to BlueScope. No response by BlueScope until prompted. There needs to be some protocols around responding to correspondence. Example, respond within a time period.

Thank you, [ Peter ]. I'm not sure of which one you're talking about. I can tell you that whenever I receive or Mark receives a direct mail from any of our employees or customers, et cetera, they tend to get responded to very quickly in a quite organized way. So I'm surprised with that feedback, but I'll certainly happy to look into it.

There's no further questions online. Is there any final questions on the phone?

We do not have any questions on the phone line. Mr. Chairman.

Okay. Thanks, Michael. Shareholders, that concludes the formal business of the meeting today. If you haven't already done so, please submit your vote now. The poll will remain open for a further 5 minutes to enable shareholders to submit their votes. There is a countdown clock, which will appear on your screen letting you know how long you have until the meeting closes. The results of the poll on items 2 to 7 will be available later today and can be obtained by visiting the ASX or our website. Thank you for your attendance to today's AGM. We hope that at next year's AGM, we'll be able to offer shareholders the opportunity to attend in person. The Board and I thank you for your continued support of our company and wish you and your families good health. I now declare the meeting closed subject to the finalization of the poll. Thank you very much.