 Leadership | Principle 1: The governing body should lead ethically and effectively. |
| King IV™ Reference |
There are a number of policies, procedures and guidelines in place to ensure ethical leadership and behaviour, including the code of business ethics, the business integrity policy, a conflicts of interest policy, regular evaluations and whistleblowing arrangements.
The code of business ethics, approved by the Boards, sets out Mondi's five core values and guides the behaviour of employees throughout the organisation and the way in which the business is managed. This is accompanied by a more detailed business integrity policy reinforcing Mondi's position on ethical behaviour and compliance with relevant regulation. Compliance throughout the Group is monitored, primarily through Mondi's internal audit function and the confidential reporting facility, Speakout.
The matters reserved for the Boards ensures that all material decisions are brought to the Boards for consideration and approval. This includes approval of the Group's strategy and key policies. The directors support fairness, accountability, responsibility and transparency in everything they do.
The Boards take account of the impact of the company's operations on internal and external stakeholders during their decision-making with stakeholder engagement at multiple levels informing the Boards' materiality assessment, strategy and reporting.
Mondi has a clearly defined internal control and risk management framework in place. This includes agreed risk tolerance levels, ensuring that the parameters within which risks may be taken are clear. The directors are under a duty to act in the best interests of the company whenever they make a decision.
| |
Organisational Ethics | Principle 2: The governing body should govern the ethics of the organisation in a way that supports the establishment of an ethical culture. |
| King IV™ Reference |
The Boards are responsible for governing the ethics of the organisation and for ensuring that the Group is managed in accordance with the appropriate ethical standards. The Boards have ensured that a code of conduct and ethics-related policies, through which ethical standards are clearly articulated, have been established and implemented to ensure an ethical culture throughout the Group. The Group's code of business ethics and supporting business integrity policy have been reviewed and adopted by the Boards and implemented throughout the Group. Adherence to the code and policy is monitored and reported on by the internal audit function. The Boards also undertake a review on at least an annual basis.
The Boards set the values to which the company will adhere and these are formulated in the code of business ethics. The code is available on Mondi's website. The business integrity policy sets out the conduct and ethical behaviour expected from employees and clearly sets out the sanctions for breach of the policy.
The Boards ensure compliance with the code of conduct is integrated into the strategy and operations of the company; i.e. the ethical organisational culture is reflected in the company's vision and mission; strategies and operations; its decisions and conduct; and the manner in which it treats its internal and external stakeholders.The Boards also ensure that ethical risks and opportunities are incorporated in the risk management process. This is reviewed annually by the Boards. The DLC sustainable development committee, the DLC audit committee and the Mondi Limited social and ethics committee oversee ethical risks and opportunities and receive regular reports on ethical matters.
Mondi's code of business ethics and other policies and procedures, including competition compliance procedures, are included in training provided to relevant employees. All such policies and procedures are also available on the intranet for all employees. There is a confidential reporting tool in place called Speakout, allowing employees, external partners and other stakeholders to raise concerns about behaviour or activities that might be in breach of Mondi's ethical standards.
Mondi's integrated report provides details of Mondi's policies and procedures in place, including the code of business ethics, the business integrity policy, SD policies and Mondi's whistleblowing arrangements. Further information is also available in Mondi's online SD report.
| |
Responsible corporate
citizenship | Principle 3: The governing body should ensure that the organisation is and is seen to be a responsible corporate citizen. |
| King IV™ Reference |
The Boards oversee and monitor the impact of Mondi’s business on the environment, the communities in which we operate and employees, particularly in terms of safety. The DLC Sustainable Development Committee and Mondi Limited Social and Ethics Committee in particular monitor the Group's interaction with local communities, the impact on the environment and other stakeholders.
The Boards ensure that the company performance and interaction with its stakeholders is guided by the Constitution and the Bill of Rights as well as best practice and relevant governance codes and international standards. Mondi's policies and procedures are also aligned to ensure that our performance and interaction with stakeholders is appropriate. Compliance with regulation, governance codes, Mondi's own policies and procedures and other standards is kept under review. The Boards also ensure that measurable corporate citizenship programmes and policies are developed and implemented. Mondi's values and its code of business ethics reflect the importance of stakeholders' interests and the sustainability of Mondi's operations.
The approach of the Boards to the economy, society and environment in which it operates is set out in its annual sustainability report and in more detail on the Mondi Group website. The Boards provide the leadership necessary to implement the principles of good governance across the Group so that all deliberations, decisions and actions of the business are based on integrity, responsibility, accountability, fairness and transparency.The welfare of employees is kept under review and forms a key part of the policies and procedures Mondi has in place. Mondi's approach to employment is guided by the Fundamental Rights Convention of the International Labour Organization and the United Nations Global Compact. Sustainable Development policies which include Mondi's approach to safety, labour and human rights, product stewardship, the environment, energy and climate change and supply chain management are in place and are reviewed annually. Reports on safety are presented to every DLC Executive Committee, DLC Sustainable Development Committee and DLC Board meeting.
| |
Strategy and performance | Principle 4: The governing body should appreciate that the organisation's core purpose, its risks and opportunities, strategy, business model, performance and sustainable development are all inseparable elements of the value creation process. |
| King IV™ Reference |
The Boards have oversight of Mondi’s strategy, which is reviewed annually, with authority delegated to the DLC Executive Committee to formulate, develop and implement it. The Mondi Way and the Growing Responsibly model each provide a framework for Mondi’s operation to ensure all aspects of the value creation process are considered. The Boards ensure that the strategy is aligned with the purpose of the company, the value drivers of its business and the legitimate interests and expectations of its stakeholders.
The risks facing the Group and potential opportunities available as well as expected future developments in terms of financial and non-financial matters affecting the Group are considered as part of the annual strategy review. This includes consideration of any potential impact the agreed strategy might have on Mondi's financial position, employees and wider stakeholders.
At the center of Mondi's reporting is the Group's strategy and how the relationship between the strategy and risk is managed to drive performance and long-term value of the business. Relevant financial, ethical, environmental, social and governance issues are addressed to provide a holistic view of Mondi's performance as well as the Group's strategy, risks and opportunities going forward.
The DLC Board receives a financial update from the CFO at every board meeting, allowing the DLC Board to monitor developments in Mondi's financial performance, key metrics and analyst expectations. A report is also provided by the CEO at every meeting covering market and operational developments and the impact on Mondi's performance. The sustainability of Mondi's business and it's impact on the environment, local communities and other stakeholders is closely monitored and is managed through the implementation of Mondi's sustainable development policies, the business integrity policy and code of business ethics as well as other Board-approved policies. Oversight is managed through the DLC Audit, DLC Sustainable Development and Mondi Limited Social & Ethics Committees, all of which report back to the DLC Board.
| |
Reporting | Principle 5: The governing body should ensure that reports issued by the organisation enable stakeholders to make informed assessments of the organisation's performance, and its short, medium and long term prospects. |
| King IV™ Reference |
An integrated report is published once a year, together with a printed, and more detailed online, sustainable development report. The integrated report, SD reports and all other externally-published reports are made available for access by stakeholders in hard copies and electronically on the website, allowing shareholders and other key stakeholders to assess Mondi's performance and future prospects.
The reports include all information required by relevant laws and regulations as well as corporate governance and best practice disclosure.
In addition to the overall review of the integrated report by the external auditors, the DLC executive committee, DLC audit committee and Boards also review the report before publication. The SD reports are reviewed and approved by the DLC sustainable development committee on behalf of the Boards. Key disclosures are also subject to external assurance.
| |
Primary role and
responsibilities | Principle 6: The governing body should serve as the focal point and custodian of corporate governance in the organisation. |
| King IV™ Reference |
The Boards have oversight of the application of corporate governance principles across the Mondi Group and aim to ensure that behaviour at board and management level, as well as throughout the organisation, is in line with good corporate governance and best practice standards. This is primarily achieved through the implementation of a number of board-approved policies and clear delegations of authority.
The Boards act in accordance with the Mondi plc articles of association and the Mondi Limited memorandum of incorporation. Procedures governing the management of the Boards are in place and the responsibilities of the Boards are clearly documented in a schedule of matters reserved for the Boards. The schedule of matters reserved for the Boards includes responsibility for Mondi's overall corporate governance arrangements.
The Boards meet regularly and review at least annually compliance with the relevant corporate governance codes.
| |
Composition | Principle 7: The governing body should comprise the appropriate balance of knowledge, skills, experience, diversity and independence for it to discharge its governance role and responsibilities objectively and effectively. |
| King IV™ Reference |
The composition of the Boards is regularly reviewed and evaluated to ensure an appropriate balance of knowledge, skills, experience, diversity and independence in light of the Group's strategic direction, to ensure an appropriate balance of power and to allow the Boards to fulfil their responsibilities. The experience and qualifications required for each of the board committees are also reviewed. Succession planning is in place and the Boards are subject to annual evaluation.
Mondi currently has joint chairmen, two executive directors and four independent non-executive directors. One of the non-executive directors has also been appointed as the senior independent director. The separate duties of the CEO, the chairmen and the senior independent director are clearly documented.
The DLC Nominations Committee undertakes an annual review of the composition of the Boards, making recommendations to the Boards if and when appropriate. The independence of each director, their other time commitments and any potential conflicts of interest in particular are reviewed annually prior to the recommendation that they be reappointed at the next AGM. This is also considered during the annual evaluation process. The Boards are ultimately responsible for the appointment of new directors.
As a global organisation operating in over 30 countries, diversity forms an integral part of the business. Mondi is committed to creating a culture that embraces diversity and provides a working environment that is flexible and non-discriminatory from recruitment and people development to reward and talent management approach. The Board has approved a diversity policy promoting gender, race and other forms of diversity at board level and throughout the organisation. More details can be found in Mondi's integrated report.
Full details of the qualifications and experience of each director, their independence, committee memberships and their ability to commit the time required to Mondi can be found in Mondi's integrated report.
| |
Committees | Principle 8: The governing body should ensure that its arrangements for delegation within its own structures promote independent judgement, and assist with balance of power and the effective discharge of its duties. |
| King IV™ Reference |
There is a clearly defined framework in place for the delegation of authority by the Boards and to ensure the fulfilment of its duties. In particular, there are terms of reference in place delegating authority to each of the Boards' committees as well as monetary delegations of authority to the executive committee and senior management.
Mondi has an audit, nominations, remuneration, sustainable development and social & ethics committee as well as an executive committee. Each of the Boards' committees has clearly defined responsibilities and duties, all of which are set out in terms of reference. The chairman of each committee reports back to the Boards after each meeting, allowing the Boards' to monitor performance and to ensure that the committees are acting in line with the Boards' delegations. The terms of reference are reviewed annually. Committee composition is reviewed annually to ensure each committee has an appropriate balance of skills, qualifications and experience to perform the duties delegated to it. The terms of reference also specify the minimum number of members and the proportion of independent directors required in order to ensure an appropriate balance of power and independence where appropriate. The remit of each committee is described in Mondi's integrated report and the terms of reference are available on Mondi's website.
The monetary delegations of authority provide a framework for the day to day running of the business, delegating decisions below a certain level to the executive committee, the CEO and other senior management. The executive committee then sets a further framework within this for application to the remainder of the Group.
| |
Evaluations of the
performance | Principle 9: The governing body should ensure that the evaluation of its own performance and that of its committees, its chair and its individual members, support continued improvement in its performance and effectiveness. |
| King IV™ Reference |
An annual evaluation of the Boards, the committees and the joint chairmen is undertaken, with the board evaluation being externally facilitated once every three years. The senior independent director leads the annual review of performance of the joint chairmen.
Full details of the annual performance evaluation process, outcomes and progress against those actions is given in the corporate governance report in Mondi's integrated report.
| |
Appointment and delegation to
management | Principle 10: The governing body should ensure that the appointment of, and delegation to, management contribute to role clarity and the effective exercise of authority and responsibilities. |
| King IV™ Reference |
Clearly defined delegations of authority to management are in place to ensure the effective exercise of authority. The boards have determined the level of materiality over which matters are for their sole decision and this is set out in the Matters Reserved for the Boards. Other matters are delegated to the Boards' committees and to management via the CEO and the executive committee. These delegations are reviewed on an annual basis.
The CEO leads and manages the business with day-to-day responsibilities for running the operations and, in particular the execution of strategy within the delegated authority from the Boards. This delegated authority is set out both in the terms of reference applicable to the executive committee and via monetary delegations of authority. The Boards are satisfied that that the delegation framework is effective and contributes to role clarity.
In addition, the Boards have appointed company secretaries to provide guidance on governance, regulation and statutory requirements and to manage the day-to-day compliance and governance requirements of the Boards and the Group.
Mondi's integrated report contains full details of the remit of each committee to which the Boards have delegated authority, the role and authority of the CEO and the executive committee and the duties of the Company Secretaries and the governance services they provide to the Boards.
| |
Risk governance | Principle 11: The governing body should govern risk in a way that supports the organisation in setting and achieving strategic objectives. |
| King IV™ Reference |
The Board's responsibility for risk management is explicit in the schedule of matters reserved for the board and the Boards approve the overall policy and plan annually. Oversight of risk management is delegated to the DLC Audit Committee which, on behalf of the Boards, regularly reviews the Group’s principal risks and oversees the annual review of the Group’s risk management framework. The DLC Executive Committee undertakes a thorough review before it goes to the DLC Audit Committee and the Boards to ensure it accurately reflects the principal risks associated with achieving Mondi’s strategy.
Mondi has a clearly defined risk management framework which includes a risk rating matrix that assesses the likelihood of certain risks and the magnitude of impact should they occur, an annual assessment of our principal risks and specific risk tolerance levels for each category of risk. All decisions are taken with these agreed risk tolerance levels in mind. The potential risks involved with any transaction are considered by the DLC Board. Our risk management framework is designed to address all the significant strategic, sustainability, financial, operational and compliance-related risks that could undermine our ability to achieve our business objectives into the future. It is flexible, to ensure that it remains relevant at all levels of the business; and dynamic to ensure we can be responsive to changing business conditions. This is particularly important given the diversity of the Group’s locations, markets and production processes.
The executive committee formulates and implements risk management policies to ensure risks are managed within accepted tolerance levels agreed by the Boards. The committee assesses and monitors risks on an ongoing basis and ensures risk policy is implemented in conjunction with strategic objectives.
Holistic risk assessments are also conducted as part of all major investment decisions. The business units conduct an annual assessment of their own specific risks and are required to adhere to clearly defined policies and delegations of authority which are implemented throughout the organisation.
Mondi has in place a centrally coordinated internal audit function which reports directly to the audit committee and monitors and reports on the effectiveness of the internal control framework. The internal audit function in turn is subject to independent assessment at least every five years. External assurance is also provided through external audit. Mondi is subject to review by external regulatory and non-regulatory bodies, including annual insurance assessments, sustainable development assurance and information security penetration testing.
Mondi's integrated report contains details of Mondi's internal control and risk management framework, including Mondi's principal risks, the agreed risk tolerance levels and the monitoring, mitigation and independent assurance activities in relation to these risks.
| |
Technology and information
governance | Principle 12: The governing body should govern technology and information in a way that supports the organisation setting and achieving its strategic objectives. |
| King IV™ Reference |
The Boards have delegated oversight of IT security and risk to the DLC Audit Committee. There is an IT policy in place and the Chief Information Officer presents to the DLC Audit Committee and the Boards twice a year providing details of IT policies and their implementation throughout the Group, key risk areas and how IT risks could undermine the Group's ability to achieve its business objectives and cyber attacks and other IT-related incidents. Management is responsible for the implementation of all structures, processes and mechanisms in relation to the IT governance framework.
The IT function has processes in place to monitor Mondi's networks for cyber attacks and other IT-related incidents, including leaks of information, allowing them to respond quickly to any such events. The executive committee on behalf of the DLC Board oversees the value delivery of IT and monitors the return on investment from significant IT projects. Significant IT projects are reported on to the audit committee and the DLC Board.
IT-specific risks are included in the Group's risk management process and are reviewed at regular intervals. The effectiveness of Mondi's IT security arrangements is regularly tested with the results and necessary assurances provided to the DLC audit committee and Boards. The impact of IT risk on Mondi's largest operational sites in particular is assessed regularly.
Details of the arrangements in place for managing IT and the associated risks are included in Mondi's integrated report.
| |
Compliance governance | Principle 13: The governing body should govern compliance with applicable laws and adopted, non-binding rules, codes and standards in a way that supports the organisation being ethical and a good corporate citizen. |
| King IV™ Reference |
Mondi’s overarching board-level policies are designed to ensure compliance across the Group with all applicable laws, codes and best practice standards and to encourage ethical behaviour.
The matters reserved for the Boards includes specific responsibility for reviewing the Group's compliance with applicable laws, rules, codes and standards. The governing body has adopted a code of business ethics, which applies throughout the Group and sets out five fundamental principles that govern the way in which Mondi and its employees conduct business. This includes compliance with all applicable laws and regulation. Throughout the year the governing body and committees review all aspects of compliance.
The DLC Board has delegated authority to the executive committee to agree and implement appropriate policies and procedures for the Group, which includes policies and procedures necessary to ensure compliance with all applicable regulation and guidance.
The Boards and their committees regularly review compliance matters, including the procedures and policies in place, giving them a holistic view of compliance management across the Group. The internal audit function incorporate reviews with applicable legislation in to their audits and report at each meeting of the DLC audit committee which in turn reports to the Boards.
The company secretaries provide an update on changes in law and regulation at each board meeting.
A centrally coordinated internal audit programme, using internal and external resources, supports the governing body in ensuring a sound control environment. Assurance activities covering key business risks are summarised and reported annually to the governing body, audit committee and sustainable development committee.
Mondi's integrated report provides details of the role of the company secretaries and their function in relation to governance and compliance, the role of the internal audit function, key policies and procedures in place and work undertaken during the year in relation to specific pieces of legislation, changes in governance or new policies introduced.
.
| |
Remuneration governance | Principle 14: The governing body should ensure that the organisation remunerates fairly, responsibly and transparently so as to promote the achievement of strategic objectives and positive outcomes in the short, medium and long term. |
| King IV™ Reference |
The Boards have delegated oversight of remuneration to the DLC remuneration committee to ensure fair, transparent and responsible remuneration, designed to help achieve Mondi's objectives. There is a clear, shareholder-approved remuneration policy in place designed to, among other things, ensure that executive director remuneration is aligned with shareholders' interests, will support the achievement of the Group's business strategy and includes performance-based elements that are balanced between the achievement of short and long term objectives. The remuneration committee has responsibility for considering and proposing this remuneration policy. This is ultimately subject to approval by the DLC Board and shareholders.
Remuneration policies and practices are aligned with strategy and linked to individual performance through the setting of appropriate objectives that are reviewed by the Remuneration Committee. This is done on an annual basis and the objectives are set following the annual review of strategy and the business plan by the Boards. The remuneration of executive directors takes into account remuneration and employment conditions elsewhere in the Group. A significant proportion of executive director pay is performance-based, with elements subject to the achievement of financial and safety objectives. The personal objectives of the executive directors include non-financial objectives.
Incentive targets are based on a number of parameters that include financial, safety and personal objectives. The target range is set by the DLC Remuneration Committee before each award is made, usually annually.
Full details of Mondi's remuneration policy and practices, as well as the implementation of the policy, are provided in Mondi's integrated report.
| |
Assurance | Principle 15: The governing body should ensure that assurance services and functions enable an effective control environment, and that these support the integrity of information for internal decision-making and of the organisation's external reports. |
| King IV™ Reference |
The Boards have delegated oversight of the assurance services and functions in place to the DLC audit committee, including the relationship with the external auditor, monitoring of the internal audit function and review of principal risks. External assurance is also received on certain sustainability disclosures. The chairman of the DLC Audit Committee reports back to the DLC Board on each of these matters, with the Boards ultimately retaining responsibility for risk management.
The DLC audit committee has oversight of the Group's risk management and internal control framework. The internal control and risk management framework is designed to address all the significant strategic, sustainability, financial, operational and compliance-related risk. The DLC audit committee, on behalf of the DLC Board, is also responsible for overseeing the integrity of the Group's financial reporting, the accounting treatment of certain transactions and the internal control environment. The audit committee reports to the DLC Board on each of these matters and assists it in assessing the financial information provided.
Mondi has in place a robust and well-defined risk management approach. This includes an annual detailed review by each business unit of the risks applying to their part of the business. They each compile a risk register which is reviewed and approved by the individual operating committees. The most significant risks are then reported to the executive committee, the audit committee and the DLC Board. Management assurance is provided on both a formal and informal basis. A number of specialist Group functions have also been established to provide oversight of specific risk areas. These include information technology, sustainable development, safety and health, treasury and tax. Mondi is also subject to regular review by external regulatory bodies and non-regulatory parties, including annual insurance assessments, sustainable development assurance and information security penetration testing.
The DLC Board retains ultimate responsibility for the approval of all financial announcements and the integrated report - these items are set out in the matters reserved for the board. There is a delegation in place to the audit committee to assist with the assessment and monitoring of the integrity of such external reports which sets out clearly defined parameters within which the committee should do this.
Mondi's integrated report provides full details of the internal control and risk management framework in place, the process for reviewing this and and the assurances received in relation to the report. The online SD report also confirms the assurance received in relation to sustainability disclosures.
| |
Stakeholders | Principle 16: In the execution of its governance role and responsibilities, the governing body should adopt a stakeholder-inclusive approach that balances the needs, interests and expectations of material stakeholders in the best interests of the organisation over time. |
| King IV™ Reference |
There are a number of policies in place governing Mondi’s practice and behaviour in relation to a variety of stakeholders, including the code of business ethics, the business integrity policy and the SD policies. Relationships with Mondi's key stakeholders are managed and monitored by the DLC Board and its committees, including the Sustainable Development Committee which undertakes an annual review of who the key stakeholders are on the DLC Board's behalf. The CEO, CFO and members of senior management undertake engagement with key stakeholders and report back to the DLC Board where appropriate.
In addition, stakeholders which could materially affect, or are affected by, the operations of the company are identified, assessed and dealt with as part of the risk management process.
There is a regular programme of engagement with a variety of stakeholders together with regular performance reporting to keep stakeholders informed. The Boards at each meeting receive a report detailing stakeholder perception of performance and this is reviewed against management expectations. Should this highlight any gaps they are considered in light of future stakeholder engagement.
More information about our stakeholders and the ways in which we engage can be found in the online SD report.
| |
