Downer and our stakeholders place a strong importance on governance and ethical conduct. This was reinforced in the outcomes of our materiality assessment, where governance and ethical conduct ranked as Downer’s second-highest priority issue.
Downer’s approach to sustainability is underpinned by a robust corporate governance framework. This framework provides the platform from which Downer’s Board provides strategic direction for the responsible and sustainable growth of the company. It also drives a culture that promotes high ethical standards and personal integrity.
Under our governance framework, Downer’s management is accountable to the Board, and the Board is accountable to shareholders for the operations, performance and growth of the company. The primary goal the Board has set for management is to focus on enhancing shareholder value, which includes responsibility for Downer’s economic, environmental and social (ESG) performance.
Our Board recognises the need for the highest standards of behaviour and, as such, endorses the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (ASX Principles). Our Corporate Governance Statement for the year ending 30 June 2021 is included in our Annual Report.
Ensuring our governance and ethical standards are adhered to by our diverse supply chain remains a challenge, particularly around issues such as human rights and modern slavery, and data security.
The Downer Board comprises a majority of independent Directors. The Board consists of the Chairman (Mike Harding, an independent Non-executive Director), four other independent Non-executive Directors and an Executive Director (Downer Group CEO, Grant Fenn). Details of each Board member, including their skills, experience, status and term of office, are set out in Downer’s 2021 Annual Report and are also available on the Downer website.
The composition of our Board is reviewed and assessed by the Nominations and Corporate Governance Committee to ensure the Board is of a composition and size and has a commitment to discharge its responsibilities and duties effectively.
When appointing Directors, the Nominations and Corporate Governance Committee aims to ensure that an appropriate balance of skills, experience, expertise and diversity is represented on the Board. This may result in a Non-executive Director with a longer tenure remaining in office to bring that experience and depth of understanding to matters brought before the Board.
Given the breadth of Downer’s service offerings across a range of markets, the Board seeks to ensure that it maintains an appropriate range of technical skills across engineering, construction and scientific disciplines, as well as services activities and professional services, when considering the appointment of a new Director.
At Downer, multiple Board committees assist the Board of Directors in carrying out its primary role of guiding the company’s strategic direction. There are six permanent Board committees:
- Nominations and Corporate Governance Committee
- Audit and Risk Committee
- Zero Harm Committee
- Tender Risk Evaluation Committee
- Remuneration Committee
- Disclosure Committee.
With the Sydney Growth Trains and High Capacity Metro Trains projects reaching an advanced stage during the year, it was decided that the Rail Projects Committee cease, with regular periodic reporting on their status to be made directly to the Board.
All charters for the Board and these committees are available on our website under the Board and Committees section.
Internal audit and risk framework
Downer’s internal Audit and Risk function objectively evaluates and reports on the existence and effectiveness of our internal risk controls. The internal audit team is independent of the external auditor and reports to the Audit and Risk Committee.
Financial and Corporate Governance Self-Assessment
To monitor the effectiveness of our governance framework, we conduct a biannual assessment of our senior executives and senior managers through the Financial and Corporate Governance Self-Assessment (FCGSA).
Downer’s senior executives and senior managers are required by the Board to undertake the FCGSA to determine the compliance of their respective areas with financial and corporate governance policies and to furnish a declaration on the outcome of this assessment.
The Audit and Risk Committee receives a summary of issues and acts upon these in accordance with Downer’s policies and procedures. Declarations are used to support the Board in its statements to the ASX, NZX, ASIC, NZ Companies Office, ATO, NZ IRO, finance providers, insurance underwriters and others.
Timely, honest and transparent disclosures
Downer is committed to providing all investors with equal and timely access to material information about the company.
Downer’s Disclosure Policy sets out processes which assist the company to ensure that all investors have equal and timely access to material information about the company and that company announcements are factual and presented in a clear and balanced way. The Policy states that new and substantive investor or analyst presentations are to be released on the ASX Market Announcements Platform ahead of the presentation.
We are committed to implementing best practice in identifying and disclosing material and market-sensitive information, which is why our Disclosure Policy adopts procedures in accordance with the Corporations Act 2001 (Cth) and the ASX Listing Rules.
Anti-bribery and corruption
Downer has a zero tolerance to bribery and corruption. We are committed to complying with the law in all jurisdictions in which we operate, as well as maintaining and reinforcing the reputation of Downer and our people for ethical practice.
That is why we take steps to educate our people on the risks of bribery and corruption. Downer’s Anti-Bribery and Corruption, Gifts and Benefits Policy sets out our expectations around bribery and corruption and outlines the dangers of breaching these laws.
As Downer has operations in foreign jurisdictions, Downer employees are confronted by the challenges of doing business in environments where bribery and corruption are real risks. However, regardless of the country or culture within which our people work, Downer is committed to compliance with the law, as well as maintaining our reputation for ethical practice.
To avoid the potential for bribery and corruption, Downer does not make donations, either in kind or directly, to political organisations, political parties, politicians or trade unions in any country without prior approval from the Chairman or CEO, through the Company Secretary.
In addition, Downer will not make or solicit payments to organisations which predominantly act as an intermediary to fund political parties or individuals holding or standing for elective office without prior approval from the Chairman or CEO, through the Company Secretary.
Downer is committed to preventing the misuse (or perceived misuse) of market sensitive information by restricting certain securities dealings undertaken by our people.
Downer’s Securities Trading Policy has been developed to ensure that:
- Any permitted dealings in securities carried out by our people comply with legal and regulatory obligations (including the prohibition against insider trading)
- Downer maintains market confidence in the integrity of dealings in our securities. Our people must not engage in insider trading of Downer’s securities or in the securities of another listed entity.
Many of the jurisdictions in which we conduct our business have laws to promote or protect free and fair competition (usually called ‘competition’ or ‘anti-trust’ laws). Under these laws, it is usually illegal to make an agreement with another person to fix or control prices, market share and distribution practices (among other things).
It is also illegal to make an agreement with a competitor to boycott suppliers or to deal with only specific customers or markets. Employees must not engage or be involved in any conduct that breaches competition or anti-trust laws.
Breaching these laws can have serious consequences for Downer and our people. Our people understand that even the perception of a breach of these laws will have a serious impact on the reputation of Downer and our people.