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:

Providing input and final approval of corporate strategies and performance objectives developed by executives and senior management
Approval and monitoring of financial and other reporting
Monitoring of executive and senior management performance, including the implementation of corporate strategies, and ensuring appropriate resources are available
Appointment and monitoring of the performance of the Managing Director
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
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. Refer to the Group’s website at www.gwagroup.com.au under Corporate Governance Policies for a copy of the charter.

Management is responsible for the implementation of corporate strategies and performance objectives and all aspects of the day to day running of the Group. Management are 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 the 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 Managing Director, Executive Director 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, 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 is committed to promoting diversity and inclusion through the implementation of targeted employment policies and initiatives to achieve a diverse workforce. The Board understands that significant benefits arise from increasing the pool of diverse talent across the business.

In 2012, the Board established a number of measurable objectives to promote and encourage increased diversity and in particular, to improve the representation of females within the workforce. The measurable objectives are assessed annually and are reported in the Corporate Governance Statement which is available on the Group’s website.

The objectives and supporting actions are:

Increase the percentage of females employed by GWA

Ensure the recruitment process and practices continue to comply with equal opportunity principles
Provide recruitment training for managers ensuring a focus on equal opportunity and avoiding ‘unconscious bias’

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

Continue to promote awareness of current flexible work practices available in the Group to existing employees and potential candidates
Investigate and implement any additional flexible work arrangements appropriate to the needs of employees with families

3. Succession planning and high potential employee development

Ensure 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 aim of our recruitment and development strategy is to attract, develop and retain a diverse pool of talent to deliver our growth strategy.

The Group continues to review employment policies and practices to ensure that, among other things, flexibility is offered to attract and retain talent. GWA fully supports flexible working arrangements and many employees take advantage of this policy to work from home or to work flexible hours. 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.

The Group has regular talent reviews with a view to strengthen our succession plans. As outlined in the Group’s 2019 Workplace Gender Equality Report, the overall workforce consists of 39% female which is an increase of two percentage points from 2018 (2018: 37%). In addition, female representation across all levels of management has increased versus the prior year and 65% of all promotions were women.

During FY19, the gender diversity of the Board increased through the appointment of Alison Barrass as a non-executive director effective 24 May 2019. This brings the total number of female directors to two (with Jane McKellar appointed during FY17), and female representation now comprises 25% of the Group’s directors.

The following table is a summary of the Group’s workplace profile at 31 March 2019:

Title	% Female	% Male
Board	14%	86%
Key Management Personnel	29%	71%
Other Executives/General Managers	0%	100%
Senior Managers	43%	57%
Other Managers	34%	66%
Total – Management	35%	65%
Total – Non-Management	41%	59%
Overall Totals	39%	61%

Note:
* A Barrass was appointed a non-executive director effective 24 May 2019. This is not reflected in the Group’s workplace profile at 31 March 2019.

In May 2019, the Group lodged its 2019 Workplace Gender Equality Report with the Workplace Gender Equality Agency in accordance with the Workplace Gender Equality Act 2012. 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 under Gender Equality Reporting. The Group received notification during June 2019 that it is compliant with the Workplace Gender Equality Act 2012.

While gender diversity is a priority, it is also important to promote a workplace employee profile that delivers competitive advantage through diversity of thought, experience and perspective. Currently 48% of the Group’s workforce is over the age of 45 and the average new hire age is 39. To continue to be a relevant, adaptive and innovative organisation, a balance of multi-generational employees is integral to ensuring the Group remains future focused. There will be an increased focus on building a pipeline of younger talent through increased graduate or early career hires.

GWA continues to support a progressive approach to embedding diversity in the organisation, and our Diversity and Inclusion Policy is available on the Group’s website.

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 open discussions with the Board members and detailed questionnaires as required. Any issues or improvement opportunities identified from the performance evaluation are actioned.

During FY19 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 FY19 performance reviews of executives were conducted in accordance with the performance review process.