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