Principle 1 | GWA Group Limited

Lay Solid Foundations for Management and Oversight

Role of the Board and Management

The Board is responsible for the long-term growth and financial performance of the Group. The Board charts the strategic direction of the Group and monitors executive and senior management performance on behalf of shareholders. To achieve this, the Board is engaged in the following activities:

Demonstrating leadership and defining the Group’s purpose;
Providing input and final approval of the Group’s corporate strategies and performance objectives developed by executives and senior management;
Approval and monitoring of financial and other reporting;
Approving the Group’s Statement of Values and Code of Conduct to underpin the desired culture within the organisation;
Monitoring of executive and senior management performance, including the implementation of corporate strategies, instilling of the Group’s values and ensuring appropriate resources are available;
Appointment and monitoring of the performance of the Chief Executive Officer and the Company Secretary;
Setting the risk appetite within which management are expected to operate;
Ensuring that the Group has appropriate systems of risk management and internal controls, reporting mechanisms and delegation authority limits in place;
Liaison with the Group’s external and internal auditors through the Audit and Risk Committee;
Approval and monitoring the progress of major capital expenditure, capital management, acquisitions and divestments;
Satisfying itself that the remuneration policies are aligned with the Group’s purpose, values, strategic objectives and risk appetite;
Any other matters required to be dealt with by the Board from time to time depending upon circumstances of the Group;
Other matters referred to in the Board and Board Committee charters.

The Board operates under a charter that details the functions and responsibilities of the Board. The charter is reviewed annually to ensure it remains consistent with the Board’s objectives and responsibilities.

Management is responsible for the implementation and execution of corporate strategies and performance objectives and all aspects of the day to day running of the Group. Management is also responsible for ensuring the Group operates within the risk parameters set by the Board and for providing the Board with accurate and timely information to enable the Board to carry out its duties.

Delegations Policy

The Board has approved a Delegations Policy which clearly outlines the authorities of the Board and those which have been delegated to executive and senior management covering all management activities. The policy ensures that the executives and senior management understand the authorities delegated by the Board and are accountable to the Board for its compliance. Annual reviews are conducted on the appropriateness of the delegated authorities and any material breaches are reported to the Board.

Background Checks

Before the appointment of directors and executives, the Group ensures that appropriate background checks are conducted as to the person’s character, experience, education, criminal record and bankruptcy history. This is an important step in the recruitment process to ensure the appointment of suitable candidates to director and executive roles.

All material information relevant to the election or re-election of directors is provided to shareholders in the director profiles which are included in the Explanatory Memorandum to the Notice of Annual General Meeting. The following information is provided to shareholders:

Details of the qualifications, skills and experience of directors;
Details of any other directorships held by directors;
The term of office currently served by the director (if any);
A statement if the Board considers the director independent;
A statement on whether the Board supports the election or re-election of the director;
Any other material information advised to shareholders that is relevant to the decision on whether to elect or re-elect the director.

Letter of Appointment

New directors of the Group are provided with a formal letter of appointment which outlines the key terms and conditions of their appointment. Similarly, executives including the Chief Executive Officer, Company Secretary and Chief Financial Officer have formal job descriptions and letters of appointment describing their salary arrangements, rights and responsibilities and entitlements on termination.

A comprehensive induction program is provided to directors, executives and senior management to ensure full understanding of the Group’s strategy and operations, its policies and procedures and the industry within which it operates.

Company Secretary

The Company Secretary is accountable to the Board, through the Chairman, on all matters to do with the proper functioning of the Board including all corporate governance matters. The Company Secretary is responsible for the compilation and dispatch of the agenda and papers for each Board and Committee meeting. The Company Secretary prepares the draft minutes for each meeting, which are tabled at the next Board meeting for review and approval. The Company Secretary and the directors communicate regularly on all Group and governance matters.

Diversity in the Workforce

GWA recognises and celebrates the value and contribution each individual brings to the workplace and appreciates the value of attracting and retaining employees from different backgrounds. GWA is committed to creating a working environment that is fair, flexible and supportive of all our staff and that promotes personal and professional growth.

GWA embraces and celebrates diversity in the workforce which contributes to business success and benefits employees, customers, consumers and shareholders. Leveraging diversity in the workplace fosters engagement, enhances creativity, improves decision making and increases productivity to deliver a strong competitive advantage.

We remain committed to promoting diversity and inclusion through the implementation of policies and initiatives to achieve a diverse workforce. The Group’s Diversity and Inclusion Policy is available on the Group’s website at www.gwagroup.com.au under Corporate Governance Policies.

We understand that each individual is unique and we recognise individual differences. These differences can include skills, experience, thought, gender, age, disability, ethnicity, cultural or socio-economic background, religion, sexual orientation, political or ideological beliefs as well as other dimensions such as lifestyle and family responsibilities.

At GWA we are committed to:

a workplace which is free from discrimination, harassment, bullying, victimisation and vilification;
treating employees fairly and with respect;
a workplace culture that is inclusive and embraces individual differences;
equal employment opportunities based on ability, performance and potential;
awareness in all staff of their rights and responsibilities with regards to fairness, equity and respect for all aspects of diversity;
flexible work practices and policies to support employees and their changing needs;
attraction, retention and development of a diverse range of talented people;
equitable frameworks and policies, processes and practices that limit potential unconscious bias.

In 2012, the Board established a number of measurable objectives to promote and encourage increased gender diversity within the workforce as outlined below. The Board will continue to work on increasing the percentage of females employed by GWA including committing to a minimum 30% target for Board composition in line with the Principles and Recommendations of the ASX Corporate Governance Council having regard to business needs, the best available candidates and all facets of diversity in addition to gender.

GWA has made significant progress in recent years to address gender pay equity anomalies and have addressed these as part of the annual salary review process. In February 2021, a gender pay equity review was performed in the Australian business. The result of this review identified any variations in pay across similar roles were attributed to non-gender related variables. Gender pay equity reviews are built into the annual remuneration review process and will remain an ongoing focus for GWA.

The measurable objectives to increase gender diversity are assessed annually and are reported in the Corporate Governance Statement.

The objectives and supporting actions include:

1. Increase the percentage of females employed by GWA with a minimum 30% target for Board composition

Ensure the recruitment process and practices continue to comply with equal opportunity principles.

Women comprise 43% of GWA’s overall workforce for the reporting period. For the prior year, female composition of the global workforce was 42%. The Group’s focus on diversity and inclusion has been recognised by employees and is demonstrated by increased scores in our latest engagement survey which was two percentage points above the Australian norm. The current female representation on the Board is close to the minimum 30% target as outlined in the table below.

In June 2021, the Group lodged its 2021 Australia Workplace Gender Equality Report with the Workplace Gender Equality Agency (WGEA) in accordance with the Australian Workplace Gender Equality Act 2012 (Act). The Group notified its employees and employee organisations of the lodgement of the report and advised how it may be accessed. The Group also allowed employees and employee organisations to make comments on the report. The report is available on the Group’s website at www.gwagroup.com.au under Gender Equality Reporting. The Group received notification from the WGEA that it is compliant with the Act.

The following table is a summary of GWA’s Australian workplace profile at 31 March 2021 as reported to the WGEA:

Title	% Female
Board of Directors	29%¹
Key Management Personnel	0%²
Senior Managers/Other Managers	32%
Total Management	37%
Total Non-Management	45%
Overall Total	43%

Note:

33% of GWA’s non-executive directors are female.
KMP for WGEA reporting includes the Acting CEO, Chief Financial Officer and Company Secretary roles with the other non-KMP executives included in Management.

2. Provide and promote flexible work practices to attract and retain diverse talent

Continue to promote awareness of current flexible work practices to existing employees and potential candidates;
Investigate and implement any additional flexible work arrangements appropriate to the needs of employees to support personal circumstances.

Across GWA we continue to review employment policies and practices to ensure that, among other things, flexibility is offered to attract and retain talent. GWA fully supports and encourages flexible working arrangements and many employees take advantage of different ways to get the job done including working from home or working flexible hours.

The existing wide use of flexible work practices enabled the Group to quickly respond to the COVID-19 pandemic with all office-based staff having the ability to work from home. GWA also provided additional tools and training during the pandemic to ensure that staff were supported to work remotely as part of our ongoing focus on their safety and wellbeing. In the latest employee survey, 77% of employees felt that they “have the flexibility to modify their work schedule to address personal situations” which is two percentage points above the Australian average.

In addition to a number of employee benefit programs, a purchased leave plan is also in place which allows employees to “purchase” additional leave of up to four weeks per year via salary sacrifice.

3. Succession planning and high potential employee development

GWA ensures a diverse group of high potential employees are identified as part of the Group’s succession planning process and actively developed for career progression. The Group’s recruitment and development strategy continues to focus on attracting, developing and retaining a diverse pool of talent to deliver our growth strategy.

GWA has regular talent reviews to strengthen our succession plans. These talent discussions include career development actions which are regularly reviewed. Managers are aware of their responsibility to develop talent and in the last survey, 81% of Managers responded “I am accountable for developing high performers” which is a strong score for Australian organisations.

Performance Evaluation – Directors

The Nomination and Remuneration Committee conducts an annual evaluation of the performance of the Board, the Board Committees and the individual Board members to determine whether they are functioning effectively by reference to current good practice. The performance evaluation is conducted by the Chairman of the Board through discussions with the Board members and detailed questionnaires as required. Any issues or improvement opportunities identified from the performance evaluation are actioned.

During FY21 a performance evaluation of the Board was conducted by the Chairman in accordance with the evaluation process.

Performance Evaluation – Executives

Performance reviews of executives are conducted formally on a bi-annual basis. The performance review process is critical to the development of executives and enables performance issues to be addressed. The Group has identified core competencies for the key roles in the organisation and these are incorporated into individual job descriptions. During the performance review process, the performance of executives is assessed against the business objectives, core competencies and personal goals.

Measurable personal financial and business improvement goals are established during the performance review process which are aligned with the Group’s strategy and priorities. The achievement of both financial and personal goals is incorporated into the Group’s Short-Term Incentive plan as outlined in the Remuneration Report.

During FY21 performance reviews of executives were conducted in accordance with the performance review process.