on any given day Wherever we are in the world, our 5,688 people are part of the one team. We deliver with care, pride and passion. Manny Arceo and Lee Sailata, <strong>Mainfreight</strong> Los Angeles 54 <strong>Mainfreight</strong> | <strong>Annual</strong> <strong>Report</strong> <strong>2013</strong>
The supply chain logistics industry is recognised as being dominantly male, however as the Company moves into a broader geographic range, we are discovering areas where there is greater gender balance such as our Logistics business in the Netherlands, our Air & Ocean business in many locations, and our Russian, Polish, Finnish and Ukranian operations, where five of six branch managers are women. The Board does not currently have a Diversity policy, however <strong>Mainfreight</strong> is firmly committed to diversity and equality in all areas of its operations. THE ROLE OF SHAREHOLDERS The Board aims to ensure that shareholders are informed of all major developments affecting the Group’s state of affairs. Information is communicated to shareholders in the <strong>Annual</strong> <strong>Report</strong>, the Interim <strong>Report</strong>, and twice-yearly Newsletters. In accordance with the New Zealand Stock Exchange policy, the Board has adopted a policy of Continuous Disclosure as required. The Board encourages full participation of shareholders at the <strong>Annual</strong> Meeting to ensure a high level of accountability and identification with the Group’s strategies and goals. The Board has constituted the following standing Committees that focus on specified areas of the Board’s responsibility. AUDIT COMMITTEE The Committee is required to establish a framework of internal control mechanisms to ensure proper management of the Group’s affairs. The Committee is accountable to the Board for the recommendations of the external auditors, Ernst & Young, directing and monitoring the audit function and reviewing the adequacy and quality of the annual audit process. The Committee provides the Board with additional assurance regarding the accuracy of financial information for inclusion in the Group’s <strong>Annual</strong> <strong>Report</strong>, including the Financial Statements. The Committee is also responsible for ensuring that the Group has an effective internal control framework. These controls include the safeguarding of assets, maintaining proper accounting records, complying with legislation, including resource management and health and safety issues, ensuring the reliability of financial information, and assessing and over viewing business risk. The Committee also deals with Governmental and New Zealand Stock Exchange compliance requirements. During the year, two changes were made to the Committee’s members: Richard Prebble vacated his position and assumed a role on the Remuneration Committee and Simon Cotter was appointed to the Committee. Audit Committee: Carl Howard-Smith, Chairman Simon Cotter, Director Bryan Mogridge, Director REMUNERATION COMMITTEE The Committee reviews the remuneration and benefits of senior executives and makes recommendations to the Board. The Committee also monitors and reports on general trends and proposals concerning employment conditions and remuneration. General remuneration for all team members is reviewed on an annual basis and takes into account CPI and responsibility changes for each individual. This does not include senior executives. Senior executive remuneration is reviewed every eighteen months. A general increase is applied to all salaries in April, as detailed below. Senior executives’ salaries are reviewed every 18 months, and were last reviewed in April 2012. 1 April <strong>2013</strong> 1 April 2012 New 2.5% 3.0% Zealand and Australia USA 2.0% 3.0% Asia 5.0% 5.0% Europe 2.0% 2.0% The discretionary bonus system used in <strong>Mainfreight</strong> was applied during the financial period. This bonus calculation is applied across all business units other than the Wim Bosman Group and only to those people who have completed 12 months continuous full time service for <strong>Mainfreight</strong>. The total cost of this discretionary bonus for the <strong>2013</strong> financial year is $13.98 million. Richard Prebble was appointed to the Committee during the past year.. Remuneration Committee: Bruce Plested, Executive Chairman Emmet Hobbs, Director Richard Prebble, Director Corporate Governance 55