Team performance

Group Five believes in measuring performance strictly against set objectives. In the next few pages, we outline how our board and senior management performed against their key performance areas.

• CHAIRPERSON

  Key performance areas	How impact is measured	Delivery F2010	Delivery F2011
  CHAIRPERSON Evaluated by: Independent evaluation by Institute of Directors/shareholders through annual general meeting
  Focused and unified board	Focused and unified board.	Board is unified and focused.	Board is unified and focused.
  No conflicts of interest	No conflicts of interest.	No conflicts of interest declared this year.	No conflicts of interest declared this year
  Breaches of governance/ compliance	Breaches of governance/ compliance.	Integrity and governance confirmed by F2010 board review, current review in progress.	Integrity and governance confirmed by F2011 board review.
  Annual work plan delivery and improved board complement	Annual work plan delivery and improved complement of board.	Board schedule met.	Board schedule met.
  Ensuring effective board and exco interactions	Adherence to group policy for group strategy setting and budget approval.	The board has interacted with exco through strategy sessions.	In addition to meeting the board schedule, site visits with exco were conducted to the Middle East. A board sub-committee was also established to assist exco to develop a new broad-based black economic empowerment shareholder strategy.
  Board review	Board review.	Current board review in progress.	Board review highlighted the need for additional board representation in the areas of law and engineering. Two new board members joined in August 2011.
  Completion of CEO appraisal	Completion of CEO appraisal.	CEO appraisal completed.	CEO appraisal completed.
  Board attendance	Board attendance.	Board attendance good.	Board attendance good.

  
  
  

• CEO

  Key performance areas	How impact is measured	Delivery F2010	Delivery F2011
  CEO Evaluated by: Chairperson and lead independent non-executive director
  Leadership	Employee satisfaction survey.	65.9% employee satisfaction score.	67.0% employee satisfaction score.
  BBBEE	Construction Charter scorecard rating.	Level 3 BBBEE contributor	Level 2 BBBEE contributor.
  Safety	Group DIFR and fatalities.	Group DIFR improved from 0.39 to 0.33, but five fatalities, one of which was a Group Five employee.	Group DIFR worsened from 0.33 to 0.36 with six fatalities in our sub-contractor base.
  Client focus	Client survey.	Client survey conducted indicated a high client satisfaction.	Formal survey to be undertaken every three years. In the current year, the focus was on building a client sector-focused orientation through the E+C structure and integration of the group’s business development. This was achieved.
  Capacity building	% of employees trained annually.	Training interventions increased from 8 933 to 14 941.	17 234 training interventions compared to 14 941 last year.
  Organisational development, succession and transformation	Structural alignment with strategy and goals.	Structure refined to address regional business focus and launch of E+C.	Further structural changes identified in mitigation of weak markets and group strategy to expand geographically and become more sector focused.
  Compliance/risk management	External audit report.	External audits clear.	External audits clear.
  Group strategic development	Strength of order book as % of one year’s revenue.	Construction order book sustained above a year’s revenue.	Construction over-border order book sustained at a year’s revenue.
  Group financial performance	HEPS/EPS growth.	HEPS growth 10%, but material impairment reduced EPS.	HEPS down 46% based on market decline and poor performance by Manufacturing and Construction Materials. EPS reported loss due to materials impairment.
  Stakeholder communication and interaction	Client, investor and board communications feedback.	Several market awards and strong feedback.	The group has won the Investment Analysts Society award for communications and reporting in our sector for five years in a row
  Inter-company initiatives and group procurement	% internal sales.	Manufacturing internal supply 15% and Construction Materials 21.5%.	Manufacturing internal supply 13% and Construction Materials 16%.

  
  
  

• CFO

  Key performance areas	How impact is measured	Delivery F2010	Delivery F2011
  CFO Evaluated by: CEO and chair of audit committee
  Leadership	Employee satisfaction survey.	65.9% employee satisfaction score.	67.0% employee satisfaction score.
  Group financial performance and position	Actual versus targets to group over-arching financial goals.	HEPS growth of 10%, but material impairment reduced EPS.	HEPS down 46% based on market decline and poor performance by Manufacturing and Construction Materials. EPS reported loss due to Construction Materials impairment.
  Financial risk management	GCR rating.	GCR level maintained.	GCR level maintained.
  Organisational development, succession and transformation	Construction Charter scorecard rating.	Level 3 BBBEE rating.	Level 2 BBBEE rating.
  External and internal compliance management	External and internal audit.	No material adverse internal or external audit findings.	No material adverse internal or external audit findings.
  Technology enhancement and development	Extent of connectivity, integration, relevant and reliable management information.	100% site connectivity, disaster recovery plan in place, tested and externally verified as effective.	100% site connectivity, disaster recovery plan in place, tested and externally verified as effective.
  Stakeholder communication and interaction	Investor and financial institution feedback.	The group has won the Investment Analysts Society award for communications and reporting in our sector for four years in a row. In F2010 we were also the overall winner.	The group has won the Investment Analysts Society award for communications and reporting in our sector for five years in a row.

  
  
  

• NON-EXECUTIVE DIRECTORS

  Key performance areas	How impact is measured	Delivery F2010	Delivery F2011
  NON-EXECUTIVE DIRECTORS Evaluated by: Independent evaluation by Institute of Directors/review by independent board evaluation service provider/shareholders through annual general meeting
  Skills, experience and technical knowledge on strategy, performance, resources, transformation, standards of conduct and evaluation of performance	Evaluation of board skills against business requirements.	The previous board evaluation found that some skills were needed, which resulted in the nominations committee being mandated to source two additional board members.	Board evaluation found that skills were needed in law and in engineering and construction. Two new board members joined in August 2011.
  Level of contribution as a board member	Attendance at required meetings and contribution to meetings.	Current members have significant experience and add value to the board. All board members are members of other committees.	Current members have significant experience and add value to the board. Outside of new members just appointed, non-executive board members are all members of other committees.
  Offering sufficient time to Group Five	Number of other commitments and results of annual board evaluation.	Some board members are foreign based and could not attend all meetings in person, but all provided valuable input into board matters.	Some board members are foreign based and could not attend all meetings in person but attended by conference facilities. All provided valuable input into board matters.

  
  
  

• COMPANY SECRETARY

  COMPANY SECRETARY Evaluated by: group risk officer
  Ethics and governance	Code of ethics maintenance and communication, effective management of Tip-offs Anonymous line.	Tip-offs line survey results very positive, with broad understanding of the line, code of ethics communicated through the group and employee survey producing good results.	Effective management of increased fraud due to tough economic environment. The group is evaluating the establishment of a social and ethics committee in line with the new Companies Act.
  Compliance with laws and regulations	Compliance exceptions, statutory and corporate status.	The group met all required statutes and compliance requirements.	The group met all required statutes and compliance requirements, with corrective action in progress within the Construction Materials cluster.
  Directors’ duties and induction	% of directors trained/inducted and adherence to laws and requirements.	No formal induction programme in place, although a number of training initiatives for board members took place. This will be addressed in the new year.	Although no formal induction or training initiatives for board members took place, they took part in further education through the Institute of Directors.
  Adherence to the Companies Act and JSE Listings Requirements	Status of adherence and discretionary rating by manager.	No adverse findings from the group’s sponsor, the JSE Limited or Securities Regulation Panel (SRP).	No adverse findings from the group’s sponsor, the JSE Limited or Securities Regulation Panel (SRP).
  BEE scheme administration	Effective administration of black management scheme (BMS) and share appreciation rights scheme.	Share schemes running effectively, with 245 black managers having benefited from the black management scheme to date.	Improved alignment of administration of scheme with external service provider required to remove process delays. During the year, the BMS reached maturity, with 58% of employees choosing to continue holding their shares.

  
  
  

• EXECUTIVE COMMITTEE MEMBERS

  Key performance areas	How impact is measured	Delivery F2010	Delivery F2011
  EXECUTIVE COMMITTEE MEMBERS Evaluated by: CEO
  Leadership	Employee satisfaction survey/ group policy set within specialist area.	Employee satisfaction ratings were high.	A 360 degree internal leadership survey was conducted in June. The feedback was generally positive, with “change management” and “dealing with complexities” to be addressed.
  Transformation	Achievements of transformation targets and Construction Charter scorecard rating.	The group’s largest cluster, Construction, has a Level 4 BBBEE rating and the group has a Level 3 rating.	The group this year focused on a single group scorecard and rating. It achieved a Level 2 contributor rating.
  Delivery to the group	Achieved roll out versus budgeted implementation plan.	Strategic and tactical actions implemented.	Construction (with the exception of the Middle East) and Investments and Concessions delivered well against market conditions. Manufacturing and Construction Materials were adversely affected and did not meet expectations largely due to the severe decline in market conditions.
  Organisational development and succession	Effectiveness of succession and development plans.	Succession, mentoring and training programmes in place.	Succession planning from junior to senior management was initiated during F2011. Exco succession and development is a focus area for F2012, along with a group structure review.
  Technology/skills acquisition and development	Adoption of new technologies.	Several advancements made.	Successful strategic positioning and project development in energy and power sectors and PPPs through the group’s increasing relationships with equipment and technology partners and its growing capabilities in concessions and EPC work.
  Safety	Group and cluster DIFR and fatalities.	Group DIFR improved.	Group DIFR worsened from 0.33 to 0.36 with six fatalities within the sub-contractor base.
  Compliance and quality	Audit reports.	External, internal and ISO audits clear.	External, internal and ISO audits clear.
  Group strategic development in area of responsibility	Discretionary rating by manager.	Each exco member assigned strategic tasks with good progress.	Strategy was refined and firm actions delegated amongst exco. Progress in F2011 was slowed somewhat by economic conditions, but long term strategic goals progressed well.
  Teamwork	Discretionary rating by manager.	Exco teamwork is strong as evidenced by strategy delivery and internal sales.	The leadership and strategy measure in our employee survey this year showed an increase in alignment and teamwork. A 360 degree internal learnership survey was conducted in June. The feedback is generally positive, with “change management” and “dealing with complexities” to be addressed.
  Stakeholder relations	Market survey.	Client satisfaction high, with clear areas of improvement identified.	Exco focused mainly on client relationships, which was successful.

  
  
  

• MANAGEMENT COMMITTEE MEMBERS

  Key performance areas	How impact is measured	Delivery F2010	Delivery F2011
  MANAGEMENT COMMITTEE MEMBERS Evaluated by: by: relevant executive committee member
  Financial performance	Achievement of financial performance indicators.	Generally achieved.	Not all business units achieved performance indicators due to weak markets. Refer to operational reviews from page 142.
  Cash generation	Ratio of profit to cash generation.	Not all business units met their cash targets due to weak markets.	Not all business units met their cash targets.
  Inter-company initiatives and group procurement	Rating by CEO based on annual review.	Manufacturing internal supply of 15% and Construction Materials 21.5%.	Manufacturing internal supply of 13% and Construction Materials 16%.
  Transformation	Delivery against transformation targets and Construction Charter scorecard rating.	The group’s largest cluster, Construction, has a Level 4 BBBEE rating and the group has a Level 3 rating.	The group this year focused on a single group scorecard. It achieved a Level 2 rating.
  Individual performance assessment – additional KPAs specific to area of focus	Discretionary rating by manager based on performance.	Performance ratings completed with good to excellent results.	74.5% of employees this year concluded a performance review with their managers compared to 67% in F2010.