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CR&S 2010
About
Stockland
Commercial office leasing
Commercial leasing is undertaken by
contractors. We have the opportunity,
however, to set expectations with our
leasing contractors such that they
engage our prospective tenants on
the value of energy efficiency and
high environmental performance.
Upstream products, including
building materials
Many upstream products such as
building materials are generally selected
by our builders and in turn, their
sub-contractors. This can limit our ability
to direct the selection of environmentally
and socially appropriate materials.
We can guide the performance attributes
of building materials by setting clear
briefs and highlighting the value we
place on sustainability performance.
Our commitment to using Green Star
rating tools aids this influence.
Downstream services, including
cleaning and security
We have some capacity to influence the
sustainability performance of our service
providers, such as cleaning and security
providers. In particular, we have made clear
our expectations to our service contractors
through contracts and services level
agreements that they provide their workers
with fair working conditions.
Governance
The Board takes its governance
responsibilities seriously and believes it has
the necessary mix of experience and skills
to oversee the high standards of corporate
governance, integrity and accountability
required of a professional and ethical
organisation. Details of our corporate
governance policies and practices are
outlined in our Financial Report 2010.
The Board believes that Stockland’s
governance accords fully with the
principles and recommendations of the
ASX Corporate Governance Council.
Our key policies and the charters for
Board Committees can be found on
our website. Over the past year we have
reviewed and refined our Corporate
Responsibility and Sustainability Board
Committee Charter. The review analysed
the increasing role and value of the
Committee with particular emphasis on
reflecting our increased public reporting
commitments since the Committee was
established in 2005.
Risk Management
We adopt a rigorous approach to
understanding and proactively managing
the risks we face in our business. Taking
business decisions which entail calculated
risks and managing those within sensible
tolerances is fundamental to delivering
long-term value to our securityholders and
meeting our commitments to employees,
tenants, customers, contractors, business
partners and the communities in which
we do business.
Risk management is about continuously
identifying, evaluating, treating and
monitoring exposures. While risks can
be managed by introducing policies,
procedures and work practices, we have
taken the view that the most effective
long-term method for managing risk
is by creating a risk-aware culture.
We believe risk management must
be integrated into the day-to-day
management and operation of our
business. It should guide our decision
making and form an integral part of our
culture. Our risk management strategies
are guided by the international standard
ISO 31000 and other applicable standards.
We recognise the importance of managing
risk associated with our business activities
in a manner that enables us to:
• Maximise profitable opportunities,
• Mitigate or reduce risk which can
cause loss,
• Ensure compliance with applicable
laws and regulations,
• Enhance resilience to external events.
We renewed our risk management
strategy in FY10 and restructured our
corporate group risk team to help
embed a risk intelligent culture across
the organisation. Our renewed risk
management strategy was informed by
the expectations of our Directors and
Executive Committee and was formally
approved by the Board in October 2009.
This has resulted in a new program of
capability building which includes skill
development, process enhancements
and technology implementation that
further enables our people to assess
and manage the risks of operating
our business.
To further strengthen our focus
on risk management strategy at
Board level, we will create a new
Risk Committee of the Board
in FY11.
The new committee will have three
independent non-executive directors
as members. The new committee’s
charter will encompass a review of risk
management issues previously the
responsibility of the Treasury Committee
(including funding, liquidity, interest
rate and counter-party risks), the CR&S
Committee (health and safety risks) and
the project and operational risk aspect
of the current Audit and Risk Committee.
A new Audit Committee will cover financial
statements. The Risk Committee’s key
role will be to assist the Board to formulate
its risk appetite statement and to maintain
a robust risk management framework.
In FY10 we revised our Fraud and
Corruption Policy and our Whistleblowing
Policy to maintain alignment with best
practice and relevant standards. We
include fraud and corruption awareness
training as part of our orientation program
for all employees and we will be rolling out
tailored training on these policies for key
teams across the organisation. Our regular
online compliance training program,
completed by all employees, will also
include a module on these policies.
Risk management and sustainability
Over the past 12 months our Group Risk
and Sustainability teams have worked
closely together to:
• Better identify risks from our
stakeholder engagement processes,
in particular our non-financial risk,
• Improve how we prioritise our
sustainability action areas,
• Strengthen how we embed
sustainability practices into
the day-to-day operations of
our organisation,
• Develop a more active risk register
for non-financial areas.
In FY11 we will conduct a workshop for
our Group Risk and Sustainability teams
to examine our material issues and deliver
a more rigorous assessment of our
non-financial risks.
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Stockland Corporate Responsibility & Sustainability Report June 2010