Corporate Social Responsibility
Introduction
This is an extract of the Corporate Social Responsibility Statement in the Annual Report for the year ended 31 December 2008. The Full Annual Report can be downloaded as a pdf file HERE.
We take business conduct seriously and have policies and guidelines in place which set standards concerning ethics, sound business practices and wider governance issues.
We acknowledge the impact our business activities have on the environment and communities in which we operate, and have systems in place to identify, analyse and manage key risks arising from our operations. This includes ensuring that we comply with relevant environmental legislation. We recognize that as an employer we have a responsibility to our employees for their safety and welfare whilst at work. This responsibility extends to their training and development, as well as to setting appropriate standards for their dealings with customers and suppliers. We take business conduct seriously and have policies and guidelines in place which set standards concerning ethics, sound business practices and wider governance issues.
Board responsibility and management framework
The Board member with overall responsibility for Environmental, Social and Governance (ESG) risks is the Group Finance Director. The Divisional Managing Directors are responsible for ESG within their respective divisions. This responsibility also specifically includes employees and health and safety. Significant ESG issues arising in or affecting our businesses are discussed at each Board meeting.
The Company recognises that being a socially responsible company adds to and enhances the Company’s overall value, both short and long term. For example, mishandled ESG risks can be damaging to the Company’s reputation as an employer, supplier or business partner. The financial costs from mishandled ESG risks can affect the Company’s profitability. The Board therefore has systems in place, including access to adequate information, to identify and assess ESG risks, and to ensure that these risks, and our exposure to them, are managed appropriately.
The principal ESG risks to the Group include: failure to retain and develop key staff; failure to provide safe working conditions for staff; failure to have systems in place that prevent the occurrence of environmental hazards arising from our operations; failure to manage risks that can damage corporate image and reputation; failure to ensure that the Group’s operations are conducted on a lawful, sound and ethical basis and in compliance with Group Policies and Procedures; and failure to carry out adequate due diligence or business planning on joint venture partners/acquisitions.
It is important that both of our divisions maintain an open and productive dialogue with all of our customers and suppliers, and the Board has tasked each Divisional Managing Director with ensuring that these occur. Each Divisional Managing Director is also responsible for ensuring that customers and suppliers uphold high levels of health and safety and conduct their operations in a lawful, sound and ethical basis, to minimise potential reputational and operational risk to the Group.
A description of the Company’s internal control system for management, particularly of financial risks is in the Corporate Governance report HERE. An analysis of the key business risks facing the Group appears in the Business Review. Although the remuneration of Executives is not directly related to attainment of ESG objectives, our bonus arrangements allow senior managers to base a proportion of performance-related pay for Executives on achieving personal goals such as improving staff turnover rates or improving injury or aircraft incident rates. These flexible arrangements apply to station managers at Aviation and branch managers at Distribution.