Announcement PDF Corporate Governance Statement 2024 S U N R I C E G R O U P — CO R P O R AT E G O V E R N A N C E S TAT E M E N T 2 0 2 4 Corporate Governance at SunRice SunRice FY24 governance highlights This Corporate Governance Statement summarises Ricegrowers Limited’s (we, SunRice or the company) main corporate governance policies and outlines the extent to which the company’s corporate governance policies and practices are consistent with the fourth edition of the Corporate Governance Principles and Recommendations published by the ASX Corporate Governance Council (ASX Recommendations). During FY24, the Board’s governance activities included: Consistent with prior years, the Board does not consider that all of the ASX Recommendations are appropriate for the company given the related provisions in our constitution regarding Board composition and shareholding requirements. SunRice has followed all of the ASX Recommendations during the financial year ended 30 April 2024 (reporting period), unless stated otherwise. Copies of policies referred to in this Corporate Governance Statement and Board and Committee charters are available in the Corporate Governance section of the company’s website at www.sunrice. com.au. This Corporate Governance Statement is current as at 30 April 2024 and has been approved by the Board. 1 • Continuing Board renewal and succession planning, including facilitating the Grower Director Elections which resulted in the appointment of Melissa De Bortoli to the Board (and the re-election of Laurie Arthur and Julian Zanatta); • Supporting initiatives directed at increasing gender diversity on the Board, and conducting an internal Board Review (facilitated by an independent, external provider); • Overseeing the appointment of and transition to the new Chief Executive Officer (CEO), Paul Serra, following the announcement of Rob Gordon’s decision to retire and step down from the Managing Director and CEO role; • Reviewing and updating a number of key governance policies, including the Competition and Consumer Law Policy, Conflict of Interest Policy and Risk Appetite Statement; • Overseeing the SunRice Group’s progress towards incoming mandatory climate-related reporting requirements; • Approving the SunRice Group’s emissions reduction targets and their submission to the Science Based Target initiative (SBTi); • Commencing a refresh of the Group’s stakeholder engagement framework and a review of SunRice’s material topics; • Training on whistleblowing, share trading, continuous disclosure, work health and safety, directors’ duties, and competition and consumer law; • Arranging Director visits to our mill at Lap Vo in Vietnam, our Trukai (PNG) rice processing facility and research farm, our SunRice and CopRice mills and Rice Research Farm in the Riverina, and to Grower meetings in the Riverina; and • Overseeing the refresh of the Growth Strategy. Our purpose, vision, values and behaviours Corporate governance is of vital importance to the company and is undertaken with due regard to all of the company’s stakeholders. We are committed to providing our stakeholders with credible, transparent and timely information as we seek to create and sustain value in all we do. This is supported by the SunRice Group’s values, which inform our decisions from the top down and underpin our corporate culture. Our values are set out on the right. OUR VALUES Integrity We will always do the right thing Dynamic We are fast, flexible and energetic Collaborative We get better outcomes when we work as a team Innovative We constantly seek new ideas and better ways Community We care deeply for the people and places that care for us Board Delegation and Accountability Board: The Board has formally delegated certain functions to Board Committees and to management via Board and Committee charters. Finance, Risk and Audit Committee Nomination Committee People and Remuneration Committee Safety, Health and Sustainability Committee Delegation Grower Services Committee Independent Committee Accountability CEO: The Board has delegated running the day-to-day affairs of the company and implementing the policies and strategy set by the Board to the CEO. The CEO has delegated certain responsibilities to the Corporate Management Team. Leadership and oversight The SunRice Board is committed to ensuring the Group’s corporate governance frameworks, policies and practices are of the highest standard. This commitment is delivered through continuous improvement and ensuring the Board has a sound understanding of current governance requirements and practices, as well as keeping abreast of emerging trends and changing stakeholder expectations. A) The Board and Corporate Management Team The Board is responsible for the governance of the company and oversees its operational and financial performance. The Board retains ultimate responsibility for the strategy, risk appetite and performance of the Group and has delegated responsibility for day-to-day management and implementation of the Board approved strategy and risk management policies to the CEO. B) The Board SunRice’s current Directors are set out on page 5. The names, qualifications, tenure and experience of all Board and Committee members and their attendance at Board and Committee meetings are included in the company’s Annual Report. SunRice has written agreements with all Directors setting out the key terms of their appointment. 2 Accountability Delegation Accountability S U N R I C E G R O U P — CO R P O R AT E G O V E R N A N C E S TAT E M E N T 2 0 2 4 Delegation The Board has adopted formal written charters detailing the roles and responsibilities of the Board (including the matters expressly reserved to the Board) and each Committee, and management (through the CEO), to ensure these roles are clearly defined, separated and enable an effective process of evaluation. C) Standing Board Committees The Board has established six Committees and has delegated to each Committee duties to assist the Board in exercising its responsibilities and discharging its duties. The Finance, Risk and Audit Committee is chaired by an independent Director and is comprised of a majority of independent Directors. The composition of the Nomination Committee does not comply with ASX Recommendation 2.1 to the extent that it recommends that a nomination committee consists of a majority of independent Directors and is chaired by an independent Director. However, the Board believes that in the context of the current make-up and size of the Board, the perspective and expertise that the current members bring to the Committee is appropriate. Furthermore, the Chair is discharging his role effectively and brings valuable expertise and experience to that role. The composition of the People and Remuneration Committee does not comply with ASX Recommendation 8.1 to the extent that it recommends that a remuneration committee consists of a majority of independent Directors. However, the Board believes that, in the context of the current make-up and size of the Board, the perspective and expertise that the current members bring to the Committee is appropriate. The Chair of the Committee (who is an independent Director) has a casting vote in addition to a deliberative vote. S U N R I C E G R O U P — CO R P O R AT E G O V E R N A N C E S TAT E M E N T 2 0 2 4 Composition of Board Committees as at 30 April 2024 Director Status Laurie Arthur Chair & Non-executive Grower John Bradford Deputy Chair & Non-executive Grower Paul Serra2 Chief Executive Officer & Managing Director Luisa Catanzaro Non-executive Non-Grower Chair Dr Andrew Crane Non-executive Non-Grower • Melissa De Bortoli 3 Non-executive Grower Ian Glasson Non-executive Non-Grower Ian Mason Non-executive Grower Julian Zanatta Non-executive Grower Finance, People & Risk & Audit Remuneration Committee Committee • Nomination Committee • Chair • • • Independent Committee 1 • • • • • • Chair Chair • • • • • Each Committee regularly reports to the Board on all matters relevant to the Committee’s roles and responsibilities and to ensure cross-committee information sharing. Board members also have access to the minutes of Committee meetings. 3 Grower Services Committee • The Independent Committee is comprised of the Independent Non-Grower Directors and the CEO. It meets as required to address matters impacting A Class Shareholders where Grower Directors may be conflicted, including all A Class Share applications and redemptions. 1. The Chair of this Committee rotates each meeting. 2. Paul Serra was appointed on 23 August 2023. 3. M De Bortoli was appointed on 23 August 2023. Safety, Health & Sustainability Committee The number of times each Committee met during FY24 is set out on page 62 of the 2024 Annual Report. • Chair The members of each committee can be found above (Composition of Board Committees) and the role of each Committee is set out on the next page. Each Committee has a separate charter that sets out the conduct, objectives and proceedings of that Committee, as well as the membership and any other requirements for the running of the Committee. More information about the Committees can be found in their charters. An overview of the roles and responsibilities of the Committees is set out on the next page. D) The Chair The Chair of the Board, Mr Laurie Arthur, is a Non-executive Director and a resident Australian citizen. The Chair is responsible for leading the Board and managing the Board’s functions and performance in accordance with the Board Charter. The Chair’s responsibilities are set out in more detail in the Board Charter. While the Chair is not an independent Director as recommended by ASX Recommendation 2.5, the Board considers that the Chair is discharging his role effectively and provides valuable expertise and experience as Chair. E) The CEO The CEO, Mr Paul Serra, is responsible for the dayto-day management and implementation of Board approved strategy and risk management policies. The CEO, through delegations of authority and effective reporting to the Board, is accountable to the Board. Further details on the role of the CEO are provided in the Board Charter. F) Corporate Management Team Members of the Corporate Management Team support the CEO in managing the company through delegations of authority from the CEO. The company undertakes appropriate background checks before appointing a person as a member of the Corporate Management Team. G) Company Secretary The Company Secretary is appointed and removed by the Board and reports to and is accountable to the Board, through the Chair, on all matters to do with the proper functioning of the Board and Board Committees. Further details on the Company Secretary are provided on pages 60 and 63 of our 2024 Annual Report. S U N R I C E G R O U P — CO R P O R AT E G O V E R N A N C E S TAT E M E N T 2 0 2 4 COMMITTEE ROLES AND RESPONSIBILITIES Finance, Risk and Audit Committee Nomination Committee • Monitoring the Group’s Risk Appetite, risk • Developing and applying the selection and management framework and any material exposures regarding environmental/climate change and social risks and how those risks are, or will be, managed. • Monitoring the adequacy of the processes in place to verify the integrity of any periodic report that is released on ASX and not audited or reviewed by the external auditor. • Receiving regular updates from management about compliance matters that may have a material impact on the company. • Conducting annual budget reviews for recommendation to the Board. • Monitoring, and reporting to the Board on, new and emerging financial and nonfinancial risks relevant to SunRice, including consideration of emerging trends. People & Remuneration Committee • Reviewing the Group’s remuneration strategy and framework and policies for Non-executive Directors (NEDs), the CEO and senior executives. • Reviewing and monitoring organisational culture, employee engagement, talent management and diversity and inclusion policies, frameworks and strategies across the SunRice Group. • Overseeing and reviewing the succession plan for the CEO, the CEO’s direct reports and other critical roles. 4 performance criteria to election and re-election of NEDs having regard to the mix of skills, experience, diversity and other attributes of (other) existing NEDs and how the candidate balances and complements (other) existing NEDs. • Overseeing the process for evaluation of the Board, Board Committees and individual NEDs, including the Board’s and Committees’ performance relative to its charter. Safety, Health & Sustainability Committee • Providing oversight and guidance to management on the SunRice Sustainability Strategy and its effectiveness in addressing material topics identified by stakeholders. • Ensuring that the Board exercises due diligence in supporting the commitment of the SunRice Group to meet its obligations under all applicable work, health and safety and environmental legislation. • Reviewing the effectiveness of SunRice’s policies, programs and initiatives designed to ensure compliance with legislative and regulatory obligations, environmental sustainability and the minimisation of the company’s impact on the environment. • Monitoring SunRice’s activities to ensure they are directed towards developing a secure and ethical supply chain and increasing traceability within our Australian and international supply chains. • Monitoring SunRice Group’s compliance with sustainability and environmental reporting requirements and providing oversight and guidance on sustainability and environmental disclosures and reporting in accordance with applicable legislative and regulatory obligations and industry standards. Grower Services Committee • Ensuring the development, implementation and continuous improvement of policies and procedures that relate to on-farm production of rice, harvest management and provision of payments and services to growers. Independent Committee • Assisting the Board in discharging its responsibilities on matters in which Grower Directors may have an actual or perceived conflict of interest, such as crop planning decisions, determinations as to “critical years” and determinations as to whether fixed price contracts need to be offered for the entire volume of Riverina rice grown in a specific crop year. • Undertaking annual reviews to determine if there are persons who ought to be invited to apply for an A Class Share and making recommendations to the Board on the issue of A Class Shares to applicants. • Making recommendations to the Board, as required, including in relation to formulating the manner in which paddy prices for Riverina Rice will be determined, establishing pools and determining the rules applicable to participation in those pools. S U N R I C E G R O U P — CO R P O R AT E G O V E R N A N C E S TAT E M E N T 2 0 2 4 SUNRICE DIRECTORS 5 The names of the persons who have been Directors, or appointed as Directors, during the financial period and up to the date of the 2024 Annual Report are outlined as follows together with their tenure. For more information about our Directors, including their directorships and previous appointments, please visit our website or see page 60 of the 2024 Annual Report. Laurie Arthur Paul Serra John Bradford Luisa Catanzaro Dr Andrew Crane Chair Non-executive Director Grower Chief Executive Officer Executive Director Non-Grower Deputy Chair Non-executive Director Grower Non-executive Director Non-Grower Non-executive Director Non-Grower Appointed in 2018 Appointed in 2018 Appointed in 2007 Appointed in 2023 Appointed in 2015 Status: Independent Status: Independent Status: Non-independent Status: Non-independent (Executive) Status: Non-independent Melissa De Bortoli Ian Glasson Ian Mason Julian Zanatta Kate Cooper Non-executive Director Grower Non-executive Director Non-Grower Non-executive Director Grower Non-executive Director Grower Company Secretary Appointed in 2023 Appointed in 2016 Appointed in 2018 Appointed in 2019 Status: Non-independent Status: Independent Status: Non-independent Status: Non-independent Appointed in 2020 Board governance and performance S U N R I C E G R O U P — CO R P O R AT E G O V E R N A N C E S TAT E M E N T 2 0 2 4 A) Succession Planning and Appointment Process Board composition requirements are set out in the company’s Constitution. During the reporting period, the SunRice Board size was reduced from 10 Directors to 9, under transitional provisions in the Constitution which remained in force until the 2023 Annual General Meeting (AGM). Prior to the 2023 AGM, the SunRice Board was comprised of up to 10 Directors, including up to six Directors who were A Class Shareholders (two of whom were elected members of the Rice Marketing Board) and up to four Directors who were persons with appropriate experience to be appointed as a Director (one of whom may be an employee of the company, such as the CEO). The elected members of the Rice Marketing Board are appointed to the Board following their election to the Rice Marketing Board. The Board is now comprised of nine Directors, following the reduction in the number of Grower Directors from six to five. The procedure for the selection and appointment of new Directors and the re-election of incumbent Directors, and the Board’s policy for the nomination and appointment of Directors, is set out in the Nomination Committee Charter and the Constitution. Prior to the election or re-election of any Director candidate, the company provides shareholders with all material information in the company’s possession that is required to support an informed decision by shareholders. The company undertakes appropriate background checks before appointing a person, or putting forward to shareholders a candidate for election or re-election, as a Director. 6 S U N R I C E G R O U P — CO R P O R AT E G O V E R N A N C E S TAT E M E N T 2 0 2 4 Board skills matrix as at 30 April 2024 B) Board Skills Matrix Corporate Leadership Corporate Finance Technology and Digital Within the constraints of the company’s Constitution, the company aims to achieve a mix of rice industry knowledge, finance and risk management and other business skills among the Directors to lead and monitor the company as well as protect the interests of A Class and B Class shareholders. The table on the right sets out the range of skills identified as important for the Board and the current number of Directors that have been assessed as having that skill. The skills matrix is refreshed regularly by the Board. Senior executive leadership and operations skills and experience in large, complex, and distributed corporate and/or ASX-listed companies. Proficiency in finance and accounting for ASXlisted companies; financial acumen and literacy; mergers and aquisitions and capital raising expertise; knowledge of financial governance systems and monitoring. Knowledge of technology and digital systems; experience in developing IT strategy, managing digital transformation and system delivery, IT governance, regulatory requirements, and risk. Proficient Practiced Developing 7 N/A Board strength Board strength Board strength Commercial Leadership Consumer and Marketing Stakeholder Management Commercial skills and acumen, entrepreneurship, and agile experience leading businesses in dynamic environments. Knowledge of and experience in consumer marketing, product and brand development and segmentation, and data analysis. Experienced in stakeholder management, engagement, and advocacy with relevant stakeholders. Board strength Board strength Board strength Strategic Planning People and Culture Corporate Governance Experience in corporate strategic planning and development to create long term shareholder value, including deriving value from mergers, acquisitions, and partnerships. Experience in C-suite performance management and remuneration, organisational development, human capital and WHS management, and industrial relations. Chair and Director experience; ASX-listed board and regulatory experience; knowledge of contemporary governance standards and practices including ESG and investment governance. Board strength Board strength Board strength Research and Development Risk and Compliance Sector Experience Experience in commissioning and managing research and development for commercial and competitive purposes. Experience in balancing commercial imperatives and risk; knowledge of risk management and compliance systems for ASX-listed and regulated companies. Contemporary FMCG, rice and agribusiness, and related international markets experience across the food industry value chain. Board strength Board strength Board strength S U N R I C E G R O U P — CO R P O R AT E G O V E R N A N C E S TAT E M E N T 2 0 2 4 C) Board, Committee and Director Performance Evaluation SunRice has an established practice of regular performance reviews, covering the Board as a whole, Committees and individual Director contributions. During the reporting period, the company engaged an independent external service provider to facilitate an internal Board, Committee and individual Director performance review. All Directors have completed the Company Directors Course run by the Australian Institute of Company Directors and, where relevant, have either undertaken, or agreed to undertake, the Company Directors Course Update. Programs are in place to ensure Directors are provided with updates on corporate governance, ESG strategy and reporting requirements, directors’ duties, cyber risk, workplace health and safety (including psycho-social risk) and other relevant legal and regulatory requirements. Directors are satisfied with the role and performance of the Board, and with the program for ongoing development. D) Director Independence The independence, relevant skills, experience and expertise held by each Director in office are provided in the company’s Annual Report. The company’s three independent Directors are Luisa Catanzaro, Dr Andrew Crane and Ian Glasson. The remaining six Directors, who include the Chairman of the Board (who is not the same person as the CEO), are not considered independent. 8 The Board considers a Director to be independent only where they are free of any interest, position or relationship that might influence, or reasonably be perceived to influence in a material respect, his or her capacity to bring an independent judgement to bear on issues before the Board and to act in the best interests of the company and its shareholders generally as a whole, rather than in the interest of an individual shareholder or other party. In accordance with the commentary to the ASX Recommendations, a Director who is employed in an executive capacity by the company or any of its subsidiaries will not be an independent Director. In other respects, the Board has not set materiality thresholds, considering it more effective to assess relationships on the individual circumstances applicable on a case-by-case basis, and where appropriate with the assistance of external advice. The Board regularly reviews the independence of each Non-executive Director. Each Nonexecutive Director is required to provide to the Board all information that may be relevant to this assessment. All Directors are required to disclose to the Board any conflict of interest or duty and any material personal interest in any matter that relates to the affairs of the company. As noted on page 6 (under A) Succession Planning and Appointment Process), the Constitution requires that the Board be comprised of up to three Directors who are A Class Shareholders or the representative of a body corporate that holds A Class Shares, and up to two elected members of the Rice Marketing Board (who are also A Class Shareholders). Currently, five out of nine Directors are A Class Shareholders. Directors who are A Class Shareholders supply rice to the company on the same terms as other rice suppliers. The Board recognises that there may be a perception that the rice supply relationship between the company and these Directors may influence their decision-making, so they are not characterised as independent. However, the company’s procedures and systems (including the role of the Independent Committee) ensure that the paddy price is set according to the commercial interests and needs of the company and the Board considers that these Directors are, in practice, able to bring an independent judgment to bear on Board decisions. The CEO is an executive employee and is therefore not characterised as independent. E) Education and Training The company has a program in place for inducting new Directors and providing appropriate professional development opportunities for Directors to develop and maintain the skills and knowledge needed to perform their role as Directors effectively. Directors have access to Management and external and internal audit to seek explanations and information, if required. Directors can also seek independent professional advice they consider necessary to fulfil their responsibilities and to exercise independent judgement when making decisions. If the Chair of the Board consents, the Group will pay a Director’s costs of seeking such advice. That consent may not be unreasonably withheld or delayed. Copies of the advice must be made available to, and for the benefit of, all Board members, unless the Chair agrees otherwise. S U N R I C E G R O U P — CO R P O R AT E G O V E R N A N C E S TAT E M E N T 2 0 2 4 Diversity, equity and inclusion at SunRice The SunRice Group recognises that the wide array of perspectives resulting from a workplace that is diverse in gender, age, ethnicity and cultural background promotes a culture of creativity and innovation and benefits SunRice’s shareholders, customers, suppliers and other stakeholders, and creates engagement across the Group. The SunRice Group’s commitment to achieving greater Diversity, Equity and Inclusion is focused on accountability, trust and building a respected brand. The SunRice Group’s commitment to achieving greater Diversity, Equity and Inclusion consists of the following guiding principles and actions: Our Principles Actions We Are Taking We role model inclusive and respectful workplace behaviours always Raising Awareness We offer development programs to raise awareness of the importance of Diversity, Equity and Inclusion and to ensure everyone is treated fairly and with respect. We want our workforce to reflect the communities in which we operate Making a Difference in our Local Communities We make a difference in our local communities by investing in and recruiting local talent. We set our people up so they can successfully manage the demands of work, life and family Developing Hybrid Work Practices We maximise our productivity and create an environment for our people to thrive by adopting hybrid work practices. We believe there should be equal representation in leadership roles Simon Scicluna, Site Manager Leeton Mill (centre), with Rice Cake Operators Chester Basil and Mary Davis. Proportion of women on the Board Proportion of women in Senior Executive4 positions in the Group FY24 % OF WOMEN % OF MEN NUMBER OF WOMEN NUMBER OF MEN 22 78 2 7 10 90 1 9 Proportion of women employees across the Group FY24 More Women in Leadership Roles We aim to continue to increase the number of women in leadership roles and ensure our leaders reflect the diversity of our communities. FY23 % OF WOMEN % OF MEN NUMBER OF WOMEN NUMBER OF MEN FY24 % OF WOMEN % OF MEN NUMBER OF WOMEN NUMBER OF MEN 25 75 2 6 Proportion of women in Senior Management 5 positions FY23 28.8 27.6 71.2 72.4 611 586 1510 1540 FY24 % OF WOMEN % OF MEN NUMBER OF WOMEN NUMBER OF MEN 4. Senior Executive includes the Group CEO and other members of the Corporate Management Team. 9 38 62 3 5 FY23 5. Senior Management includes Senior Executives and their direct and indirect reports, who have responsibility or creation and implementation of long term strategy, autonomy to operate and/or leadership responsibilities. FY23 40.6 45.2 59.4 54.8 28 28 41 34 S U N R I C E G R O U P — CO R P O R AT E G O V E R N A N C E S TAT E M E N T 2 0 2 4 The Board has adopted a Diversity Equity & Inclusion Policy that outlines the process of setting, evaluating and reporting on diversity objectives. During the reporting period, a review of the diversity measurable objectives was commenced. In FY25, the Board intends to review and finalise the new measurable objectives alongside our Growth Strategy refresh. The following table summarises SunRice’s achievements against measurable objectives in FY24. OBJECTIVE I N I T I AT I V E S A N D F Y 2 4 O U T C O M E S Continue to focus on increasing the representation of women in all Senior Management 6 roles to 40% • 41% of Senior Management roles are held by women. • Supported “Women In Rice” events held during the year aimed at building a stronger, more 6 diverse Australian Rice industry (including through identifying and developing female candidates for the SunRice Board). • Celebrated International Women’s Day by inviting employees to engage in activities that support female-focused charities and broadened understanding of gender equality and equity. • Participation in the Women & Leadership Australia seven-month program for female leaders accelerating careers towards Executive level performance, behaviours and mindsets. Promote flexible ways of working to encourage diversity within SunRice • Flexible working arrangements globally allow for hybrid working for all roles that can flex between office and other locations. • Offering paid wellbe