49 W o lsele y plc A n n u a l R e p o r t a n d A c c o u n t s 20 1 2 Ov er vi e w P e r f ormance Go v ernan ce F i nan cial s I n f o rma t i o n Ov er vie w E a r l y i n th e n a n c i a l ye a r th e C R p r o g r a m m e wa s d i s c u s s e d and r e v ie w e d compr e hensiv ely wit h each busine ss unit and w i th th e B o a r d It wa s fo u n d t o c o nti n u e t o p r ov i d e a s u i t a b l e f r a m ewo r k a n d i n c l u d e d th e e l e m e n ts th at we re i m p o r t a nt fo r th e i m p r ove m e n t of th e b u s i n e s s a n d i ts c o m p eti t i v e n e s s D u r i n g th e ye a r g r e a t e r e m p h a s i s h a s b e e n g i ve n t o i m p r ov i n g th e p r o c e s s e s fo r th e s o u rc i n g a n d t e s t i n g of o u rp ro d u c ts Pro d u c t I n t e g r i t y a n d t o o u r i n c r e a s i n g i n vo l v e m e n t i n th e s u p p l y c h a i n fo r s u s t a i n a b l e c o n s t r u c t i o n T h e se v e n k e y t h eme s ar e sho w n opposit e T h e s e w e r e ide n t ied b y busine s s unit manage me n t as t hose which could m a k e th e g r e a t e s t c o ntr i b u ti o n t o o p e r ati o n a l i m p r ove m e n t T h e e s s e nti a l p r i n c i p l e w i th a l l p r o g r a m m e c o m p o n e nts i s th at th ey a r e i n t e g r a l t o th e way we d o b u s i n e s s K e y d e v e lo p m e n t s i n t h e y e a r P e o p l e S t r a t e g y u p d a t e d a n d a p p r ove d b yth eB o a rd A l l b r a n c h e s re a s s e s s e d fo r h e a l th a n d s a fet y per f ormance H e a l th a n d s a fet y sys t e m s a c ro s s th e G r o u p rev i e we d and i m pr o v ed E t h i c s p r o g r a m m e a n d C o d e of C o n d u c t f u r t h e r e m b e d d e d i n t o th e b u s i n e s s C o ntro l s re l a ti n g t o b r i b e r y f r a u d c o r r u p ti o n a n d a n ti t r u s t f u r t h e r s t re n g th e n e d Env i ro n m e n t a l i m p r ove m e n t t a rg ets s e t fo r a l l W o l s e l ey busine sse s G r e a t e r a c c u r a c y i n e n v i ro n m e n t a l d a t a re p o r ti n g w i th re d u c e d re l i a n c e o n e s ti m a t e s P r oduct In t e grit y pr ogramme launched and G r o up w ide P r oduct In t e grit y policy and o pera t i ng frame w ork adop t e d E t h i c a l s o u rc i n g p o l i c i e s a n d p r a c ti c e s s t re n g th e n e d Incr e a se d cust ome r t r aining in sustaina b le const r u ct ion pr oduct s Cont inue d incr e a se in W o lse l e y back h auling o f p r oduct fr om suppliers r e ducing supplier emissions Go v e rnance of C o rpor ate R e s ponsibilit y Who has o v er all account a bilit y and set s direc t ion T h e ove r a l l p r o g r a m m e i s a g re e d b y th e B o a rd a n d rev i e we d a n n u a l l y t o e n s u re i ts o n g o i n g re l e va n c e t o b u s i n e s s s t r a t e g y s t a k e h o l d e r ex p e c t ati o n s a n d b r o a d e r n a ti o n a l a n d i n t e r n ati o n a l s u s t a i n a b i l i t y a g e n d a s T h e G r o u p s C o m p a n y S e c r et a r y a n d G e n e r a l C o u n s e l i s re s p o n s i b l e t o th e B o a r d fo r th e ove r a l l c o r p o r at e re s p o n s i b i l i t y p r o g r a m m e a n d fo r main taining r e gular dialogue wit h busine ss unit s t o driv e pe r f or mance Individual pr ogramme componen t s r e ceiv e m o r e f r e q u e nt rev i e w a n d i n p u t b y th e B o a rd a n d th e E x ecut iv e Commit t e e W h o i m p l e m e n t s t h e s t r a t e g y s e t by t h e B o a r d W i th d i re c t i o n f r o m th e B o a r d b u s i n e s s u n i ts d e n e a n d ex e c u t e l o c a l a c ti o n p l a n s B u s i n e s s u n i t p l a n s d i f f e r a c c o rd i n g t o th e i r ow n p a r t i c u l a r l e ve l of d e ve l o p m e n t a n d t h e gr e a t e st oppor t u nit i e s f o r pr ogr e ss in line wit h st ra t e gy Recognising t h e busine ss benet of s u s t a i n a b l e p e r f o r m a n c e a d e d i c at e d G r o u p R i s k a n d S u s t a i n a b i l i t y M a n a g e r wa sre c r u i t e d i n Fe b r u a r y 2 0 1 2 t o ove r s e e i m p l e m e n t a ti o n A r e t a r g e t s a n d o b j e c t i v e s s e t O b j e c t i v e s a n d i n s o m e c a s e s q u a n ti e d t a rg ets a r e s e t fo ra l l of o u r C R p r o g r a m m e c o m p o n e nts Fo r s o m e of o u r fo c u s a r e a s G r o u p w i d e K P I s h a ve b e e n d e n e d T h i s i s n o tth e c a s e fo r a l l e l e m e n ts of o u r p r o g r a m m e a s i t i s n o t a l ways p r a c ti c a l t o b r i n g d i s t i n c t l o c a l p r a c ti c e s a n d re p o r ti n g m e th o d s u n d e r o n e u n i e d m e tr i c I m p r ove d p e r f o r m a n c e is o ur primar y goal Unied pr oce s se s and me asur e s ar e i m p l e m e n t e d w h e r e th e r e i s b e n e t i n d o i n g s o W e w i l l c o nti n u e t o rev i e w th e p o t e nti a l fo r f u r t h e r G r o u p w i d e p e r f o r m a n c e m e tr i c s fo r f u tu re re p o r ti n g Ho w is per f ormance monit o red P e r f o r m a n c e i s m e a s u r e d b y d i f f e r e n t t e a m s fo r e a c h pr ogramme compone n t but per f ormance is monit or ed a c ro s s a l l C R p r o g r a m m e c o m p o n e nts b y th e G r o u p R i s k a n d S u s t a i n a b i l i t y t e a m a c c o rd i n g t o e a c h c o m p o n e nt s s p e c i c o b j e c t i v e s a n d t a rg ets T h i s ye a r o u r i n t e r n a l a u d i t t e a m s h a ve t e s t e d c o m p l i a n c e w i th p o l i c y a n d ad h e re n c e t op ro c e d u re s fo r a n u m b e r of o u r p r o g r a m m e c o m p o n e nts i n c l u d i n g o u r h e a l th a n d s a fet y a n d eth i c s p r o g r a m m e s W h e r e c o m p a r a b l e d a t a i sava i l a b l e we b e n c h m a r k o u r pe r f or ma nc e against indust r y sta nda r ds H o w a r e r i s k s a s s e s s e d a n d m i t i g a t e d Non nancial as w e ll as nancial risk s ar e asse ssed as par t of th e G r o u p s w i d e r r i s k m a n a g e m e nt p r o c e s s T h e s e i n c l u d e f r a u d c o r r u p ti o n p r o d u c t q u a l i t y h e a l th a n d s a fet y a n d e n v i ro n m e n t a l c o m p l i a n c e Fo r f u r t h e r i n fo r m ati o n o n th e G r o u p s r i s k m a n a g e m e nt p r o g r a m m e s e e p a g e s 4 2 t o4 7 A d e d i c at e d c o r p o r at e re s p o n s i b i l i t y r i s k a s s e s s m e nt w i l l b e c o n d u c t e d i n 2 0 1 2 1 3 t o e n s u re th at o u r ef fo r ts a r e appr opria t e ly f o cused W o lsele y s clima t e r e la t e d risk s ar e a l s o th o r o u g h l y rev i e we d a n d d o c u m e nt e d e a c h ye a r a s p a r t o f our submis s ion t o t h e Car b on D i sclosur e P r oje c t