At Accordant Group Limited (NZSX:AGL) we believe that good corporate governance is essential to protect the interests of investors, creating and enhancing value over the short and long term. We are committed to conducting business in the right way, ethically and in line with our legal and regulatory obligations. The Board has adopted corporate policies and procedures that reflect good practice, and we follow the principles and recommendations of the NZX Corporate Governance Code (the Code).
The following pages summarise our corporate governance practices and progress in FY23. Accordant takes a continuous improvement approach to corporate governance with policies reviewed on a regular basis in line with good business practice. Key governance policies and charters can be viewed on the Company’s website at www.accordant.nz/corporate-governance.
This governance statement is current as at 23 June 2023 and was approved by the Board on 23 June 2023.
|NZX Code principle
|NZX Code recommendation
|Board composition and performance
|2.5: The Board should set measurable objectives for achieving diversity
|The Board has not set measurable objectives under the Policy for achieving diversity
|Whilst the Board considers authentic diversity outcomes can be achieved without measurable objectives, the small size of the Board is limiting when seeking to label individual diversity
|Board composition and performance
|2.9: The Chair of the Board should be an independent director
|Simon Bennett as Chair of the Board is not independent due to Simon having been employed as the CEO of the Company within the last three years
|The Board and ARC maintain an independent composition majority. This enables a non-independent Chair, who brings deep industry, sector, and organisational knowledge
Accordant expects its directors and employees to act with integrity and professionalism and undertake their duties in the best interests of the Company. The Accordant Group’s Code of Ethics is available on the Company website and is available to all team members and covers all subsidiary companies.
Accordant encourages employees to speak out if they have concerns about any area of the Company. The avenues for doing so are detailed in the Company’s Protected Disclosure (Whistle-blower) Policy which is on the Company website.
The Share Transaction Policy, along with the Financial Markets Conduct Act 2013, imposes limitations and requirements on Directors and employees in dealing in the Company’s shares. These limitations prohibit dealing in shares while in possession of inside information and impose requirements for seeking consent to trade. The Company does not donate to political parties.
VARIANCE TO NZX CORPORATE GOVERNANCE CODE
We believe that the Company’s corporate governance practices for the financial year ended 31 March 2023 are materially in line with the Code, with further work being undertaken in some areas to ensure full compliance. Those areas of variance from the Code are set out in the table below.
The roles and responsibilities of the Board are detailed in the Board Charter, which is reviewed at least every two years and is available on the Company’s website. The Board establishes the Group’s objectives, strategies for achieving these objectives, the overall policy framework within which the business of the Group is conducted, and monitors management’s performance with respect to these matters. The Board has delegated the day-to-day management of the Group to the Chief Executive Officer. The Company’s Constitution and the Board Charter set out the guidelines for the operation of the Board.
BOARD COMPOSITION AND INDEPENDENCE
As at 23 June 2023 the Board comprised five non-executive directors, a majority of whom are independent directors. The Board has determined that Laurissa Cooney, Richard Stone and Nick Simcock are independent directors, and that Simon Hull and Simon Bennett (Chairperson) are non-independent directors.
Simon Hull is not an independent director because he is a substantial shareholder in the Company and has been a director for more than 12 years (appointed 4 February 2005). Simon Bennett is not an independent director because within the last three years, he was the Chief Executive Officer of the Company. Each Director has experience, skills and expertise that are of value to the Company. Profiles of Directors are available in the Company’s Annual Report.
APPOINTMENT OF DIRECTORS
The Board is elected by the shareholders of the Company. The number of elected Directors and the procedure for their retirement and election at Annual Meetings is determined in accordance with the Company’s Constitution and NZX Listing Rules. Directors will retire and may stand for re-election by shareholders at least every three years. A Director appointed by the Board since the previous annual meeting holds office only until the next annual meeting but is eligible for election by shareholders at that meeting.
All Directors are involved in the consideration of Board composition and nominations and consider a number of factors including qualifications, capability, experience, judgement and skills, and the ability to work with other Directors.
Shareholders may also nominate candidates for election to the Board, in accordance with the constitution of the Company and the NZX Listing Rules. Reference checks are carried out on all candidates and key information about candidates is provided to shareholders to assist their decision as to whether to elect or re-elect a candidate.
The Board believes that the current Directors as at 23 June 2023 offer valuable and complementary skill sets.
During FY23 the Board adopted a Remuneration Policy for the remuneration of directors and officers. A copy of this policy is available on the Company’s website.
Directors’ fees for the year ended 31 March 2023 totalled $395,000. The Director fee pool is $450,000. The last increase in the director pool was approved by shareholders at the 26 July 2017 Annual Shareholders meeting. From 1 May 2023 the Chairperson is paid a fee of $136,000 per annum and all other Directors are paid $71,000 per annum. An additional fee of $10,000 is paid to the chairs of of committees . Details of Board and CEO Remuneration during FY23 are set out in the Company’s Annual Report.
The Company has arranged a policy of Directors’ and Officers’ liability insurance. This policy covers the Directors and Officers so that any monetary loss suffered by them, as a result of actions undertaken by them as Directors or Officers, is insured to specific limits (and subject to legal requirements and/or restrictions).
The Board Charter states that no retirement allowances are payable to Directors.
DIRECTOR TRAINING AND EDUCATION
Directors are encouraged to undertake appropriate training and education to ensure they remain current on how to best perform their duties. In addition, management provide regular updates on relevant industry and Company issues, including briefings from senior executives.
All Directors have access to executives to discuss issues or obtain information on specific areas in relation to matters to be discussed at Board meetings, or other areas as they consider appropriate.
All Directors are offered paid membership to the Institute of Directors New Zealand.
BOARD PERFORMANCE AND REVIEW
The Board monitors its own performance and may from time-to-time commission an external review to assess the performance of individual Directors and the Board’s effectiveness. The Board is satisfied that each Director has the necessary time available to devote to the position, broadens the Board’s expertise and has a personality that is compatible with the other Directors.
The Company has a Diversity and Inclusion Policy, consistent with the Directors’ belief that a diverse workforce contributes to improved business performance, enables innovation and enhances the Company’s relationship with its customers.
The Board has not currently set measurable objectives under the Policy for achieving diversity, as the Board considers diversity outcomes can be achieved without measurable objectives. The Board is satisfied with the initiatives being implemented by the Group and its performance with respect to the Diversity Policy.
The gender breakdown of Accordant Group Limited’s Board of Directors and Officers as at 31 March 2023 is:
|31 Mar 2023
|31 Mar 2022
|31 Mar 2023
|31 Mar 2022
*Officers for these purposes means any leader who is concerned with or takes part in the management of the Company and who also reports to the Board or the CEO.
The Board has delegated a number of its responsibilities to Committees to assist in the execution of the Board’s responsibilities. The use of Committees allows issues requiring detailed consideration to be dealt with separately by members of the Board with specialist knowledge and experience, thereby enhancing the efficiency and effectiveness of the Board.
During FY23 the Board rationalised its Committee structure, bringing together each of the Remuneration, Nominations and Organisation Committees under a single committee – the Remuneration and Nominations Committee. The Board considers that the roles of these three separate committees were such that their roles could be more efficiently achieved by bringing them together as a single committee. A copy of the Remuneration and Nominations Committee Charter is available on the Company’s website.
However, the Board retains ultimate responsibility for the functions of its Committees and determines their responsibilities. The Committees meet as required and have terms of reference (Charters), which are approved and reviewed by the Board. Minutes of each Committee meeting are available to all members of the Board, who are all entitled to attend any Committee meeting. The membership and performance of each Committee is reviewed annually. Management attendance at Committee meetings is by invitation only. Special purpose Committees may be formed to review and monitor specific projects with senior management.
In the case of a takeover offer, Accordant would engage expert legal and financial advisors to provide advice on procedure. Formal Takeover protocols have been developed and formally adopted by the Board in compliance with Recommendation 3.6 of the NZX Corporate Governance Code.
The Board Committees as at 31 March 2023 were as set out on the following page.
|Members at 31 March 2023
|Audit and Risk Committee
|Provides assurance and assistance to the Board and Chief Executive on the Company’s risk, control and compliance framework, and its external financial reporting and accountability responsibilities.
|Laurissa Cooney (Chairperson), Simon Bennett and Nick Simcock.
|Remuneration and Nominations Committee
|Overseeing and regulating compensation and organisation matters affecting the Company, including remuneration and benefits structures, policies, performance and remuneration of the Company’s directors and senior executives, management development and succession planning for the Chief Executive Officer and direct reports to the Chief Executive Officer, and major organisation changes.
Identifying and recommending individuals for appointment as directors of the Company.
|Nick Simcock (Chairperson), Simon Bennett and Richard Stone.
|Health and Safety Committee
|The role of this Committee is to assist the Board to fulfil its responsibilities and to ensure compliance with all legislative and regulatory requirements in relation to the health and safety practices of the Company as those activities affect employees and contractors. It ensures that the Board members themselves are aware of their own responsibilities and duties under legislation and are fully informed on all Health and Safety issues and targets.
The Committee members participate in monthly meetings and review reports presented by the Group Operations Health and Safety Committee.
|All Directors are members of this Committee. The Chairperson is Simon Hull.
ATTENDANCE AT BOARD AND COMMITTEE MEETINGS DURING FY23
|AUDIT & RISK
|TOTAL MEETINGS HELD
Wynnis Armour, retired as a Director on 30 November 2022. Remuneration and Nominations* – during the financial year, the Remuneration committee, the Nominations committee, and the Organisational Committee were amalgamated into a single committee, called the Remuneration and Nominations committee.
REPORTING AND DISCLOSURE
Accordant is committed to keeping investors and the market informed of all material information about the Company and its performance, in a timely manner. In addition to all information required by law, the Company also seeks to provide sufficient meaningful information to ensure stakeholders and investors are well informed. The Company’s Continuous Disclosure Policy sets out the principles and requirements of this commitment to timely and balanced disclosures. Key corporate governance policies, including the Code of Ethics, Board and Committee Charters and other key governance documents recommended by the Code are available on the Company’s website: www.accordant.nz/corporate-governance.
The Board is responsible for ensuring that the financial statements give a true and fair view of the financial position of the Company and have been prepared using appropriate accounting policies, consistently applied and supported by reasonable judgements, estimates and for ensuring all relevant financial reporting and accounting standards have been followed.
The Audit and Risk Committee oversees the quality and integrity of external financial reporting, including the accuracy, completeness, balance and timeliness of financial statements. It reviews Accordant’s full and half year financial statements and makes recommendations to the Board concerning accounting policies, areas of judgement, compliance with accounting standards and other regulatory requirements and the results of the external audit.
For the financial year ended 31 March 2023, the Directors believe that proper accounting records have been kept which enable, with reasonable accuracy, the determination of the financial position of the Company and facilitate compliance of the financial statements with the Financial Markets Conduct Act 2013.
In all accounting matters, the Board ensures that the Chief Executive Officer and Chief Financial Officer’s reports are objective. The Chief Executive Officer and Chief Financial Officer have unfettered access to the Board Chair and the Audit and Risk Committee.
Accordant has initiatives supporting its focus on the environment, people and communities and a formal Environmental, Social and Corporate Governance (ESG) framework is being developed.
Accordant has joined the Toitū carbon programme. As part of the Group’s sustainability initiatives, we have committed to working closely with Toitū Envirocare to accurately audit and measure our greenhouse gas emissions, helping us put in place strategies to manage and reduce our impacts as we work towards achieving certification.
We are aware of and will conform with NZX Code principle 4.4 which requires that the company ‘provide nonfinancial disclosure at least annually, including considering environmental, economic and social sustainability factors and practices’. To explain how operational or non-financial targets are measured, including forward looking assessments, and alignment with key strategies and metrics to be monitored by the Board.
Accordant has continued to strengthen its risk management capabilities under the direction of the Audit and Risk Committee (ARC), the Board and the Executive Team.
The ARC ensures Accordant has appropriate risk management policies in place and provides the Board with assurance that key risks relevant to Accordant have been appropriately identified, managed and reported to the Board.
It is also responsible for overseeing and monitoring that the Company’s management implements and operates adequate risk assurance, internal control and audit systems within Accordant.
The Audit & Risk Committee carries out a review of the effectiveness of the Company’s risk management and internal control systems at least annually. The Company’s risk management policy provides clarity on roles and responsibilities in order to minimise the impact of financial, operational and sustainability risk on its business.
A Risk sub-committee comprising the CEO, CFO and GM Corporate Services are collectively responsible for the group risk management program with the Executive Leadership Team having day to day operational responsibility for risk management. The Executive Leadership Team comprises personnel who report directly to the CEO.
The Executive Leadership Team has prime responsibility for maintaining a strong risk awareness culture and focus in all activities, for identifying and managing risk in the areas under their control, and being aware of external risk factors faced. They undertake this by:
- following Company Policies, Protocols and Guidelines
- ensuring risks are identified and evaluated
- developing effective responses to these risks
- owning, managing and reporting identified risks
- operating within an appropriate level of risk, but always within Delegated Authority parameters
- reporting changes in the business environment which impact the existing risk strategies.
Foundational governance and risk documents are regularly reviewed and updated to ensure that the Company continues to find the best ways of working to achieve its business goals while remaining within risk appetite and adhering to its regulatory obligations. Accordant’s risk management framework has been created to ensure there is clear ownership and delegation of responsibility for the management and oversight of risks and to support the appropriate flow of information throughout the Group. The Company assesses its risks by understanding the likelihood of occurrence and the potential consequences using the following categories:
- Customer / Reputational / Shareholder Outcomes
- People / Health, Safety & Wellbeing
- Legal (Compliance) / Contractual
The Company obtains external advice and support from an independent third party expert in relation to corporate governance, compliance and company secretarial matters.
HEALTH AND SAFETY
Staying safe, keeping others safe, and being corporately responsible are fundamental to what Accordant is as an organisation. Operating the business in this way helps deliver on Accordant’s vision of “No Harm to People, the Environment or Assets”.
Paying close attention to safety, wellbeing, sustainability, ethics and integrity go hand in hand with that vision. The Board is committed to ensuring a high quality, safe and healthy environment for all people, visitors, partners and those in the community.
People safety is a key priority, one of Accordant’s core values and an essential component across the business. Accordant is committed to developing, improving and reinforcing its safety culture, including by improving leadership capacity and simplifying tools and systems. Safety performance is tracked to identify patterns to help prevent incidents.
“Health, Safety and Sustainability” results and reported data are reviewed at each Health & Safety Committee Meeting. In addition, the Board receives monthly reports on the health and safety performance across the Group, including performance against plan, near miss reporting, progress with safety related initiatives and reviewing lead and lag indicators of performance.
For the year ended 31 March 2023, Deloitte was the external auditor of Accordant Group Limited. Deloitte was first appointed as auditor in 2006. The most recent Audit Partner rotation occurred in FY20, with the next rotation due no later than FY25.
The Audit and Risk Committee monitors the ongoing independence, quality and performance of the external auditors and audit partner rotation. The Committee pre-approves any non-audit work undertaken by Deloitte.
The non-audit services in the year ended 31 March 2023 are set out in the notes to the annual accounts. Those services were provided in accordance with the company’s External Auditor Independence Policy. In FY23 the Company paid Deloitte $334,000 for audited services. Deloitte provided no non-audit services in FY23.
The external auditors attend the Annual Shareholders Meeting.
The Group does not consider that there is a requirement for an Internal Audit function. This function is administered by the selection of suitably qualified Finance Managers (preferably CA qualified) to ensure that monthly management reporting (Financial and Operational) is timely and accurate. It is the responsibility of company Finance Managers to consistently adhere to Group Policies and procedures. The Chief Executive Officer and Chief Financial Officer review monthly company performance against Budget, the prior year and periodic forecasts. In addition the Chief Financial Officer regularly reviews Balance Sheet reconciliations.
SHAREHOLDER RIGHTS AND RELATIONS
The Board is committed to open and regular dialogue and engagement with shareholders. Accordant has developed an investor relations programme which includes regular dialogue with investors, analysts and investor meetings, and earnings announcements. The programme is designed to provide shareholders and other market participants the opportunity to obtain information, express views and ask questions. . Easy access to financial, operational and governance information is available through the Investor Centre on the company’s website at www.accordant.nz/corporate-governance.
Shareholders are actively encouraged to attend the Annual General Meeting and may raise matters for discussion at this event, and vote on major decisions which affect the Company. Voting is by poll, upholding the ‘one share, one vote’ philosophy. Shareholders are also able to vote by proxy ahead of meetings without having to physically attend those meetings. Shareholders are encouraged to communicate with the Company and its share registry electronically. In addition to shareholders, Accordant has a wide range of stakeholders and maintains open channels of communication for all audiences, including brokers, the investing community and the New Zealand Shareholders’ Association, as well as its employees, contractors, suppliers and customers.
Approved by the Board of Accordant Group
23 June 2023