Fletcher Building is part-way into a major transformation project called FBUnite which aims to centralise aspects of group operations while retaining the devolved business model that allows individual units to stay focused.
Part of the strategy involves creating centres of excellence. During 2014 the company's centralised property and procurement teams delivered benefits while the financial shared services function went live in March.
The judges say the Fletcher Building board is well-connected to its business, making a practice of travelling to inspect the company's operations throughout the world. "The Fletcher Building board of directors is highly disciplined with a sound approach to shareholder returns and matters like diversity, community and health and safety".
The company was spun out of Fletcher Challenge.
The judges commented: Thirty-two years on from issuing their original statement of purpose, revenues, assets and underlying profits have all grown 10 per cent compound, total shareholders return 12.8 per cent compound, or deducting NZ inflation, 8 per cent per annum real. These figures have been independently calculated and verified.
It is a case study on how to survive and thrive in challenging times which have demanded a dash for growth and gearing up and conversely hunkering down to adjust to debt and equity markets. This demands Excellence in Governance. The board has examplified best practice in terms of enforcing a maximum length of service and the careful appointment of quality to Chair and board positions.
Diversity is a given in an organisation employing more than 18,000 people in 40 countries. Two of Fletcher Building's eight independent directors are women - Cecilia Tarrant appointed in 2011 and Kathryn Spargo in 2012. Fletcher says it has had a diversity in policy in place for some time and continues to monitor its performance.
There was an 8 per cent increase in the number of women in senior management roles during 2014. Over the past two years the number of women senior leaders has increased from 14 per cent to 24 per cent.
Fletcher Building operates a diversity council, chaired by the CEO. This has led to a series of Inspiring Women networking events where women employees can meet other business leaders to share experiences.
The company is proud of its progress with employee health and safety - total recorded injuries per million employee and contractor hours decreased by 12 per cent during the year. The total recordable injury frequency rate has reduced by 57 per cent over the past five years.
Finalists
Air New Zealand
It's been a year of transition at Air New Zealand with the departure of long-time chairman John Palmer who came on board after the collapse of the company's Ansett operation in Australia. Palmer successfully passed the baton to former Foodstuffs NZ managing director Tony Carter, who features elsewhere in these awards as Chairperson of the Year.
The judges said Air New Zealand rose well to the year's governance challenges. These included the government selling down its shares in the business, taking its ownership from 73 per cent to 53 per cent and making $365 million in the process. Air New Zealand has also increased the diversity on its board -- two of the seven members are women.
Air New Zealand's board has done an excellent job with its CEO appointments. It hired Ralph Norris from ASB who brought a focus on customer and culture that was ideal for the post-Ansett rebuild. Then Rob Fyfe who increased the airline's standing on the international stage. More recently Christopher Luxon has sales and marketing experience along with a focus on cost control and growth.
Port of Tauranga
Port of Tauranga is a well-governed company which continues to lead the sector. The year saw independent director David Pilkington replace John Parker as chairman of the board. Sir Dryden Spring retired as a director after 10 years on the board. He is replaced by Alastair Lawrence, a banker.
Among the highlights for the Port of Tauranga in 2014 was a 10-year contract with Kotahi -- a joint venture between Fonterra and Silver Fern Farms. The deal saw the port exchange 1.5 per cent of its equity in return for a guaranteed volume of freight. Kotahi has committed to using TCTS, a port of Tauranga subsidiary in Timaru, and has taken a 49.9 per cent share of the company. Earlier Port of Tauranga acquired 50 per cent of PrimePort Timaru.
A large scale dredging operation will shortly start to increase the port's ability to handle larger ships. Stage one is expected to cost $50 million. Also in the investment pipeline are two tug boats capable of pulling larger ships. These examples of strategic planning were highlighted in the judging process.
Port of Tauranga also clocked up a significant improvement in health and safety with a 92 per cent reduction in the total injury rate- down to 3.1 per million hours worked.
