Pillar 1 – Governance

GOVERNING PURPOSE

Setting purpose

Pental Limited (ASX:PTL) (or “Pental” or the “Company”) is a tried and trusted Australian provider of household chemical and cleaning products. With an iconic portfolio of brands, Pental has been servicing Australians for generations with honest products that really work. The quality of Pental products is a testament to our ongoing commitment to our values, founded upon innovation, performance and a united team that propels our brand forward together. At Pental, we are passionate about making a positive difference in people’s lives by providing effective and reliable household cleaning, laundry and personal care products.

Our mission is to offer innovative and trusted brands, manufacture products for private labels, and supply the hotel industry. By upholding our values of innovation, performance, and unity, we create value for our stakeholders and contribute to building a better future for all. We are committed to responsible and sustainable practices that ensure the well-being of our people, environment, and communities.

Our vision is to be a leading supplier of shelf stable products to its chosen channels and markets, built around a reputation of delivering quality, innovation, and sustainability to the satisfaction of customer needs whilst enhancing shareholder value.During the 2022 financial year, the Pental Group welcomed the Hampers with Bite (HWB) business which was acquired on 1 September 2021. The HWB business is considered an entity under the Pental Group with integrated financial reporting and shared policies/governance; therefore this ESG report also covers the HWB business.

See also: About Us

QUALITY OF GOVERNING BODY

Governance body composition

At Pental, we are committed to upholding the highest standards of corporate governance. As part of this commitment, we believe that effective governance is essential to our long-term success. We will continue to monitor and evaluate our governance practices to ensure that we are meeting our commitments to our stakeholders. To manage the risks and opportunities of our organisation, including environmental, social, and governance (ESG) issues, the Board must possess a diverse range of skills and competencies. This diversity allows the Board to make informed decisions that consider the viewpoints of all stakeholders, resulting in outcomes that benefit everyone involved. By maintaining a breadth of knowledge and expertise, we can effectively navigate challenges and capitalise on opportunities that arise in our dynamic business environment. The biographies of our Board members are available on our website (see link below) and we are in the process of developing a Board Skills Matrix which will identify and disclose the suite of skills our Board has.

Pental has adopted a Board Charter to define the role and responsibilities of the Board, promote high standards of corporate governance and enable the Board to provide strategic guidance and effective management oversight of Pental. The responsibilities of the Board are to be carried out in conjunction with the Company’s Guide to Corporate Governance and the Code of Business Conduct and Ethics.

The majority of our Board members are independent non-executive directors who bring a diverse range of experience and perspectives to the Board. The Board annually reviews the independence of the directors in accordance with the ASX Corporate Governance Council criteria. The Company discloses the length of service of each Director in its annual report. Our Board members have varying levels of tenure, which we believe brings a balance of fresh perspectives and experience to our decision-making.

As of March 2023, the Pental Board was made up of 5 members. Of these, 4/5 are Non-executive Directors and 4/5 are independent directors. The gender ratio is 4 Male:1 Female.

The Pental Board firmly believes in the advantages of having a Board that is independent, diverse, and socially inclusive. However, the Company does not have a specific policy or measurable objective for achieving gender diversity. The Board believes the existing Code of Conduct anti-discrimination provisions provides for this. Our Board is committed to promoting diversity, equity, and inclusion within the organisation and in our communities.

See also: Board of Directors, Board Charter

STAKEHOLDER ENGAGEMENT

Material issues impacting stakeholders

At Pental, we understand the importance of engaging with our stakeholders on the material issues that impact them. As a publicly listed company, we are committed to transparently disclosing these issues to our stakeholders and providing ongoing updates.

The main mechanism we use to communicate with our shareholders is through our investor centre on our website and we engage them through a variety of channels, including reports, surveys, meetings, and other forms of direct engagement. As per the requirements of the ASX Listing Rules, the Company must continuously disclose materially price sensitive information to the market. The details and responsibilities of Pental’s continuous disclosure system is outlined in the Market Disclosure & Shareholder Communication Protocol (see link below). The protocol established a Market Disclosure Committee to help the Board achieve its objectives in establishing, implementing and supervising a continuous disclosure system. We are committed to ongoing stakeholder consultation to ensure that we continue to understand and address the material issues that are of importance to our stakeholders. We will continue to engage with our stakeholders through various channels and provide regular updates on our progress.

Consultations with our stakeholders have helped us to better understand the material issues that are of concern to them. We have analysed the feedback received from our stakeholders and identified several material issues that are of significance to them. These issues include:

Environmental sustainability
Ethical sourcing of raw materials
Labour practices and employee well-being
Product safety and quality
Cybersecurity and data privacy

Capturing consumer feedback is via Zendesk customer service software. All communications are logged, tracked, and reported weekly & monthly to management and the board.

We have taken steps to address these material issues and have communicated our progress to our stakeholders through regular updates, reports, and presentations. We have also provided avenues for our stakeholders to provide feedback on our actions and initiatives.

ETHICAL BEHAVIOUR

Anti-corruption practices

Pental Limited is committed to conducting business in accordance with all applicable laws, rules and regulations and to the highest ethical standards wherever it operates. We recognise that corruption undermines trust, distorts competition, and poses significant risks to our reputation, financial performance, and long-term sustainability. The Company strives to maintain a high standard of integrity, investor confidence and good corporate governance, including those related to anti-corruption and bribery.

Pental has implemented several initiatives to combat corruption, including:  

Developing a robust Anti-Bribery and Anti-Corruption (ABC) Policy that sets out our commitment to preventing and detecting corruption in all our business activities. An updated Pental Anti-Bribery and Anti-Corruption Policy was signed off by CEO on 20/04/2023 and is to be uploaded onto the website shortly.
Implementing a system of internal controls and procedures to ensure compliance with our ABC Policy and applicable laws and regulations.
Conducting regular risk assessments to identify potential areas of corruption risk and implementing appropriate mitigation measures.
Engaging in due diligence on our business partners, suppliers, and customers to ensure they share our commitment to ethical business practices.
Encouraging our employees and stakeholders to report any suspected instances of corruption through our whistleblowing procedures.
Adopted Code of Conduct that sets out the ethical principles and values that guide our directors and senior executives to uphold the highest standards of honesty, integrity, ethical and law abiding behaviour.

At Pental, we take all reports of corruption seriously, and we investigate any allegations promptly and thoroughly. We have had no reported incidents of corruption or bribery involving our employees or business partners in the last year. However, we remain vigilant and continue to monitor our operations and relationships with third parties to ensure compliance with our ABC Policy and applicable laws and regulations.

Mechanisms to protect ethical behaviour

Pental is committed to upholding the highest standards of ethical behaviour and conducting our business with integrity. The Company expects and requires its staff to perform their duties in a lawful and ethical manner. Pental believes that transparency and accountability are key to maintaining trust with our stakeholders, including our shareholders, employees, customers, and the wider community. In this disclosure statement, we outline the mechanisms we have in place to protect ethical behaviour within our organisation.

Pental has a robust Whistle-blower Policy that provides protection to any person who wishes to report any improper conduct, including unethical behaviour or violations of the law, without fear of retribution or retaliation. The policy outlines the procedures for reporting concerns and the steps we take to investigate and address any issues raised. We ensure that all Complaints are treated confidentially and that all parties involved are given a fair hearing. Our Whistleblower Policy is easily accessible on our company website.

Pental encourages all employees to report any unethical behaviour, including violations of our code of conduct or any other policies and procedures. The mechanisms in which a Complainant can lodge a matter is by reporting the matter to the Chief Financial Officer who is Pental’s designated Whistleblower Investigations Officer or emailing or calling the helpline which is operated for Pental by Oliver Carton, Company Secretary, Pental’s designated Whistleblower Protection Officer as follows:

Email: oliver@ocarton.com.au
Tel: 0412149118

Complainants may choose to remain anonymous when making a Complaint and Pental will protect a Complainant’s anonymity, except where anonymous reporting is prohibited by the law. All Complaints are taken seriously, and we investigate and address any concerns promptly and professionally.Ethical issues can be complex and difficult to navigate, therefore it is encouraged that employees seek advice and guidance on ethical behaviour. We have a number of mechanisms in place to support them. Our employees can seek advice from their managers, HR, or Whistleblower Protection Officer. We also provide ongoing training on compliance and the Whistleblower Policy is part of all employees’ induction process. Pental continually provided learning updates via Sentrient, an Online Compliance Training program.

See also: Whistleblower Policy

RISK AND OPPORTUNITY OVERSIGHT

Risk and opportunity oversight

At Pental, risk management and opportunity identification are crucial components of the company’s operations. To effectively address potential risks and challenges that may impact the business, Pental has established a comprehensive risk management system. The Company’s Board has appointed Pental’s Audit and Risk Committee who is dedicated to managing all potential risks and opportunities and is guided by the Audit and Risk Committee Charter. This Committee works closely with the Board to review and monitor financial reporting, compliance matters of significance, external auditing, risk management, and fraud and internal control. To learn more about Pental’s Audit and Risk Committee Charter, please refer to the link provided below.

The Company has an integrated risk management framework whose purpose is to manage and mitigate risks that have been identified in our assessment process, including ESG risks and opportunities. There are several essential elements that Pental has implemented and continually reviews and improves, including:

The adequacy and effectiveness of the internal control, financial and management reporting and risk management framework.
Reviewing risk registers and reports from management, internal audit and external audit.
Monitoring management responses and actions to correct any noted deficiencies.
Review the business continuity planning process and be satisfied that material risks are identified and appropriate business continuity plans are in place.
Pental is certified to ISO 9001:2015 Quality Management System, which requires us to maintain a high level of quality and care in our product development and delivery.

On the back of drafting this ESG baseline report, our Audit and Risk Committee is currently assessing Pental’s risk management system to understand the how ESG related risks or opportunities are currently treated. The goal is to have ESG risk and opportunities explicitly highlighted, monitored, mitigated or actioned as part of the committee’s periodic review commitments. Additionally, this would provide Board oversight on ESG risks and opportunities and assist the Company with achieving its ESG goals.