OrotonGroup : 22/09/2016 - FY16 Corporate Governance Statement

The Corporate Governance principles that guide the operations of OrotonGroup (the "Consolidated Entity") are detailed in this statement. OrotonGroup and the board are committed to achieving and demonstrating the highest standards of corporate governance. These standards are based on the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations.

The ASX principles that have been adopted are outlined below. Where an alternative approach has been adopted, this is outlined within the relevant section. All these practices unless otherwise stated, were in place for the entire year.

Principle 1 - Lay solid foundations for management and oversight

The ASX Corporate Governance Council states that a company should "establish and disclose the respective roles and responsibilities of its board and management and how their performance is monitored and evaluated."

The Board of Directors

The Board of Directors (the "Board") is elected by the shareholders to represent the interests of all shareholders, collectively. In this regard, its primary purpose is to safeguard the financial security of OrotonGroup and to act in good faith and in a way most likely to promote the success of the Consolidated Entity for the benefit of its members as a whole.

Role and Responsibility of the Board

Although responsibility for the operation of the OrotonGroup business is delegated to key management personnel, the Board remains responsible for, amongst other things:

• The election of the Chairman from amongst its members whose primary role is to manage the affairs of the Board and to represent the Board;

• Selection, monitoring and evaluation of the Managing Director and senior executives;

• Ensuring the adequacy of the OrotonGroup risk management policies and internal compliance (including relevant systems and controls in place) to ensure that the assets of the Consolidated Entity are adequately safeguarded;

• Providing strategic guidance to the OrotonGroup through regular and careful consultation with key management personnel and ensuring appropriate resources are available to achieve strategic objectives;

• Approving and monitoring the progress of major capital expenditure, capital management, acquisitions and divestitures;

• Approving and monitoring statutory financial reporting to shareholders and also internal management reporting provided to the Board;

• Enhancing and protecting the reputation of the organisation;

• Ensuring that OrotonGroup acts responsibly and ethically in meeting all internal codes of conduct and meets all relevant legal and regulatory requirements.

  Role and Responsibility of Management

  The Senior Executive team is responsible for implementing the strategic objectives and operating within the risk appetite set by the board and for all other aspects of the day-to-day running of the entity.

  It is also responsible for providing the board with accurate, timely and clear information to enable the board to perform its responsibilities.

  A written agreement setting out the terms of appointment are in existence for the Senior Executive team.

  Role of the Company Secretary

  The role of the Company Secretary is to:

• Provide support to the Board by monitoring Board policy and procedures;

• Be accountable directly to the Board on all matters to do with the proper functioning of the Board;

• In consultation with the Managing Director, be responsible for communications with the ASX. This role includes responsibility for ensuring compliance with the continuous disclosure requirements in the ASX Listing Rules and overseeing and coordinating information disclosure to the ASX, analysts, brokers, shareholders, the media and the public.

  OrotonGroup Diversity Policy Objectives

  OrotonGroup believes in the value and benefit of attracting and retaining a diverse workforce and as such are committed to actively supporting diversity across all levels of the organisation. We view diversity as recognising and valuing the unique contribution people can make due to their individual background and the different skills, experiences and perspectives they bring to the team and the Group as a whole, enabling a well rounded work environment and customer experience. We recognise that individuals differ not only due to their race and gender; however they differ across various dimensions including lifestyle, educational background, physical ability, age and carer responsibility.

  At OrotonGroup, we value diversity and we encourage and welcome individuals from all backgrounds to join our Group and enjoy a rewarding career with us. To support and promote this, we have several initiatives, activities and programs in place to drive diversity and inclusion, including:

• Equal Employment Opportunity Policies and Programs based on ability, performance and potential

• Awareness and education on the areas of discrimination, sexual harassment, bullying, stereotyping and unconscious bias

• Recruitment and selection practices (at all levels of the organisation) that are focused on measureable criteria, with an intent to consider a diverse range of candidates and for decisions to be based on merit, performance and potential

• Implementation and support of flexible work arrangements to enable our employees to meet family, carer and personal responsibilities

• Remuneration practices and decisions that are based on clear, measurable and fair principles at all levels of the organisation

• Decisions affecting our employees to be made factoring in individual needs and differences

• Promotion of our Group core values of passionate, creative, courageous, innovative, curious and determined, to drive an inclusive workplace culture which is fair, equitable and desirable for all our current and future employees

• Provide a safe and healthy workplace free of harassment of any kind with no tolerance for inappropriate behaviours or conduct

• 12 week paid parental leave scheme offered across the organisation, including the payment of superannuation contributions for such leave

  The Board is committed to gender diversity and have directed management to ensure a culture of diversity is ingrained in the Directors, Officers and Employees of OrotonGroup via internal policies and programs set out above.

  The respective portion of men and women across the organisation are disclosed below.

  OrotonGroup Diversity Facts as at 2016

  OrotonGroup remains proud of our strong female participation rates across the organisation as a whole and specifically in senior executive and management positions. We remain focused on increasing representation at the senior management and board level. As a measure of gender diversity, the following table discloses the organisation figures as at 30 July 2016:

  Positions	% of women	% of men
  Directors	20	80
  Senior Executives *	67	33
  Management **	70	30
  Total Group	87	13

  *includes direct reports of the CEO

  **includes all employees in a management position across retail and head office

  These achievements in diversity have meant the Board has not considered it necessary to set specific and measureable objectives.

  Selection, Appointment process and Re-election of directors

  With guidance from the People and Organisation Committee and, where necessary, external consultants, the Board is responsible for identifying candidates with appropriate skills, experience, expertise and diversity in order to discharge its mandate effectively and to maintain the necessary mix of expertise on the Board. This includes undertaking appropriate checks before Directors are appointed, and providing information to security holders prior to re-election of any Directors. All material information on the directors are contained in the Directors' Report and under Principle 2 of this statement. The Board has decided a separate Nomination Committee is unnecessary.

  All Directors are individually briefed on appointment, on their rights and the duties they owe as Directors to the Company in accordance with the OrotonGroup Constitution, Board charters and policies, the Corporations Act (2001) and the listing Rules of the Australian Stock Exchange. Terms of appointment are included in a written agreement for each Director.

  Director and Management Performance Evaluation

  Performance reviews of the Board and its subcommittees and Senior Executives are undertaken on a periodic basis. The Board and the People and Organisation Committee have implemented a process to:

  • Evaluate the performance of the Board, committees, individual Directors and key executives;

  • The Chairman assesses the performance of individual Directors;

  • The Chairman in consultation with the CEO assesses the performance of key executives;

  • The composition of each subcommittee is reviewed. This exercise takes into consideration each Director's competency, skills, experience and expertise.

    The last assessment of the Board and Senior Executive performance was conducted by the Board during the financial year.

    Where necessary, OrotonGroup will provide the required resources to assist Directors and Senior Management in improving their performance.

    The People and Organisation Committee are involved in the performance review of key management. The Charter, referred to in the People and Organisation Committee section of this Corporate Governance Statement, outlines their responsibility in this area.

    Principle 2 - Structure the board to add value

    The ASX Corporate Governance Council states that a company should "have a board of an appropriate size, composition, skills and commitment to enable it to discharge its duties effectively."

    Board Membership

    The members of the Board and details regarding their appointment, removal, term of office, attendance at Board meetings and other Committee meetings, skills and experience are detailed in the Directors' Report section of this Annual Report.

    Board Composition

    Guidance on the composition of the Board states that:

  • The Board should be comprised of not less than three Directors (and not more than ten in accordance with the current Constitution of OrotonGroup);

  • The Board should be comprised of Directors with a broad range of expertise and proven ability to make a contribution to strategy and policy, and be able to participate fully in the oversight and guidance of management;

  • The term of any appointment is subject to continuing shareholder approval;

Details of the Board's approach to selection and re-appointment of directors is included under Principle 1 above.

Following the receipt of Mr Weiss' intention to resign, the Board undertook a review of its skills and expertise mix and was satisfied with the current mix of the Board.

The Board is committed to continuously assess the appropriateness of the mix of its skills. The table below provides a summary overview of the key skills and experience of the Board on a collective basis.

Skill/Experience/Knowledge/Expertise	Equivalent Number of Directors
Leadership (including Executive and Non-Executive roles in listed and Non-listed Companies)	5
Governance including membership or Chair of Audit, Risk Management, Remuneration and Nomination Committee's of listed and Non-listed companies	5
International experience or knowledge or expertise in Asia region and global markets	4
Strategy experience or Knowledge or Expertise in: 1) Retail 2) Growth and Business diversification 3) Mergers, Acquisitions 4) Strategic Development and implementation	5
Possessing experience, expertise, knowledge in the broad aspects of business acumen incorporating the following:
Financial, Risk, Workplace Health and Safety	5
Legal, Compliance	4
Ecommerce and Marketing	4
Production and Distribution	4
HR, Remuneration, Diversity and Corporate Social Responsibility	5
Investor Relations	5