Role and Responsibilities

 

2.1 Board Responsibilities 

The Board Charter sets out the role, structure, responsibilities and operation of the Board as well as the function and division of responsibilities between the Board and senior management. 

The main responsibilities reserved to the Board include the following:

  • approval of business strategy
  • approval of business plans which includes operating budgets
  • overseeing risk management, internal control and compliance systems
  • overseeing the integrity of the Group’s financial accounts and reporting
  • receiving, considering and approving financial reports
  • approval and monitoring of major investments, transactions, acquisitions or divestitures
  • determining capital structure and distribution policy
  • reviewing performance of the Group CEO and Executive Management Team 
  • succession planning for the Group CEO
  • Non-Executive Director selection
  • reviewing Board performance
  • promoting diversity at all levels within the Group including setting measurable objectives and assessing progress towards achievement
  • reviewing certain governance policies 

The Board Charter sets out these responsibilities in further detail and is reviewed on a regular basis to ensure the balance of responsibilities remains appropriate. 

The Board delegates authority for all other functions and matters necessary for the day-to-day management of the Group to the Group CEO who delegates to senior management as required. 

Limits of authority have been put in place by the Board for the Group CEO and senior management and the Group CEO is accountable to the Board for the authority delegated to all levels of management.   

2.2 Meetings

The Board meets as often as necessary to fulfil its role and Directors are required to allocate sufficient time to the Group to perform their responsibilities effectively, including adequate time to prepare for Board meetings. There are eight scheduled Board meetings each year and additional meetings are held as required. During the year, 15 meetings of the Board were held. Further detail on the number of Board and Committee meetings held during the financial year and the attendance of Directors at those meetings is set out in the accompanying table.

The Board program is formulated to reflect the geographic spread of the Lend Lease businesses. Five scheduled Board meetings are held in Australia each year and one each in the UK, Americas and Asia. These meetings run over two or three days. The Group’s senior management is invited to attend and present at Board meetings where appropriate. In addition to the formal meeting, Non-Executive Directors attend business briefings and project site visits in each of the regions where they meet so that a deeper understanding can be gained of the activities and operations within each region. 

The number of Directors required to constitute a quorum is three. 

  1. Reflects the number of meetings held during the time the Director held office during the year. Seven of the 15 meetings were out of schedule board teleconferences constituted to address specific issues. G G Edington and C B Carter were unable to attend one each of these teleconferences, both of which were called at short notice.
  2. C B Carter was unable to attend the November 2012 meeting as he had a timetable conflict.
  3. J A Hill retired from the Board on 15 November 2012.
  4. D J Ryan was unable to attend the April 2013 meeting due to ill health. Leave of absence was granted. D J Ryan received full briefings of the matters discussed.

2.3 Board Performance

The Board conducts an annual review of its performance and that of the Chairman and individual Directors retiring and seeking re-election at the AGM. An external review is conducted biennially and an internal review is conducted each alternate year.

External Review

The Miles Group has been engaged to undertake the next external review of the Board in 2014. The review will commence in January 2014 with the main areas of focus being:

  • Role of the Board;
  • Size, composition and experience of the Board;
  • Procedures and practices of the Board;
  • Meeting arrangements and meeting discipline;
  • Relationship with Management;
  • Individual Director effectiveness;
  • Onboarding education for new Directors; and,
  • New challenges.

The findings of the external review will be considered by the Board and appropriate action taken where required.

Internal Review and Assessment

The Chairman of the Nominations Committee conducts and oversees this review and assessment. 

An internal review was conducted in 2013. A key activity during the year was Board and committee succession planning and renewal. Following a review of the committees, Michael Ullmer was appointed to the position of Sustainability Committee Chairman, and Colin Carter was appointed to the role of Nomination Committee Chairman. 

The review process includes interviews with Directors and senior management, may involve interviews with key stakeholders, and generates recommendations to ensure the Board continues to operate effectively with the requisite mix of skills and experience, and appropriate procedures.

The Chair of the Nomination Committee, acting in consultation with other Board members, is responsible for conducting an annual evaluation of the Group CEO and the Chairman of the Board.

2.4 Independent Decision Making 

Any Director may seek external, independent, professional advice at the expense of Lend Lease. It is expected that a Director will consult the Chairman of the Board, Managing Director or Group Company Secretary before obtaining external advice. The policy of the Board is that external advice will be made available to all Directors unless the Chairman of the Board determines otherwise. 

To facilitate independent decision making by the Board, the Non‑Executive Directors meet without management present at each Board meeting.

2.5 Company Secretary

Appointed by the Board the Group Company Secretary works with the Chairman of the Board to monitor and enhance corporate governance processes and to ensure that Board policies and procedures are followed. Details of the experience and qualifications of the Company Secretary are set out in the Directors’ Report.

2.6 Senior Management

Structure

The management structure of Lend Lease consists of the Group CEO and the Global Leadership Team. 

The Global Leadership Team comprises the Group Chief Operating Officer, the Group Chief Financial Officer, the Group General Counsel, the Group Head of Corporate Affairs and the CEOs of the five regions – Property Australia, Construction & Infrastructure Australia, Americas, EMEA and Asia. The Global Leadership Team is responsible for managing the Group’s performance and key business issues in line with the Group’s long term strategy.

The Global Leadership Team meet on a regular basis and each meeting is chaired by the Group CEO.

Performance Review

The Board sets goals for the Group CEO who is responsible for setting goals for the Global Leadership Team in consultation with the Personnel and Organisation Committee. STI outcomes are based on performance during the year, and are primarily measured through the use of scorecards. Scorecards for the Group CEO and Global Leadership Team reflect short, medium and long term goals related to delivering financial returns, reshaping of the Group’s portfolio, setting up the business for future growth, embedding operational excellence and investing in people. 

The Group CEO and the Personnel and Organisation Committee conduct a detailed review of the performance of the Global Leadership Team against these goals on an annual basis at the end of each financial year. In addition each member of the Global Leadership Team also conducts a performance evaluation of their own performance.   

A review of the performance of all members of the Global Leadership Team was conducted in the financial year and was in accordance with the procedure described above.

The reviews by management are reported to and considered by the Personnel and Organisation Committee for the purposes of its consideration and ultimate recommendation to the Board on performance against scorecards.

Remuneration

The Board continually considers the Group’s Executive Reward Strategy and during the past year a comprehensive assessment considered how the Group sets goals, how performance is measured, how performance should be translated into a remuneration package, and the factors that should determine the vesting of deferred awards. The Group’s Executive Reward Strategy, which consists of a framework and policy for governing how key senior employees are remunerated, supports the achievement of Lend Lease’s strategy of ‘Restore, Build, Lead’ to achieve long term sustainable growth for the Group.

The Board has comprehensively outlined the Executive Reward Strategy and framework in the Remuneration Report. The Remuneration Report explains how performance has been linked to reward outcomes at Lend Lease this year, and changes being made to remuneration policy going forward. Further information is set out in the Remuneration Report.