OUR PEOPLE

Our employees determine our success with all other stakeholder groups. They are the face of our brands to our customers, building trust at both the point of sale and at claims time. So building a workplace that supports and involves our employees, and inspires them to do their best work every day, is one of our most important goals.

We aim to build this kind of workplace by:

• attracting and retaining the right people;
• working with our employees to create a culture that promotes and supports high performance and is defined by behaviour based on our values;
• providing opportunities for our employees to develop their skills and careers ; and
• ensuring we have simple and efficient processes in place to involve and support our employees.

Offering flexible work options

As an employer of over 12,000 people, we must ensure our workplace options are flexible enough to meet the demands of today’s diverse workforce. In 2005/06, 16% of our positions were part-time (detailed in the table below). We also offer our employees:

• flexible hours;
• compressed working weeks;
• job-sharing arrangements;
• working from home options where appropriate;
• paid parental leave options;
• carers’ leave; and
• carers’ room facilities at our major sites.

As demographics change in the countries in which we operate, we have to get better at incorporating flexibility and diversity into our workplace. Where parts of our organisation embrace this, the cost of employee turnover drops rapidly, levels of employee engagement rise, innovation improves and ultimately we see better customer service. This is a long-term management obligation for us.

In Australia we already engage very productively with the Finance Sector Union, which actively participates on a task force with our employees to explore the issues of workplace diversity and flexibility. In New Zealand 52% of our people are represented by unions and they work in collaboration with IAG NZ in determining employment agreements.

Encouragingly, our employees have told us that they can satisfactorily balance their work and other commitments at IAG. In fact, 84% of engagement survey respondents (or 6,218 employees) responded positively to the work/life question in the engagement survey. As can be seen from the table below, we are tracking above the best employers’ benchmark for this question.

Supporting women in the workplace

The majority of our employees are in the 25-34 age bracket and almost 60% of them are women. There is a social and economic imperative to ensure women feel valued at IAG, and to encourage them to return to work following parental leave.

There is one woman at Executive level at IAG NZ and, as can be seen in the table below, in 2005/06 we increased the number of women on the Executive team in Australia to three out of a total of 11. This figure is impressive in comparison to other Australia-based companies. The 2006 Equal Opportunity for Women in the Workplace Agency’s (EOWA) report on Women in Leadership found that, on average, women hold 12% of executive positions in ASX200 companies, compared with IAG’s result of 27%.

In Australia, we introduced the IAG Women’s Forum and IAG’s Women’s Leadership Program to provide opportunities for women to develop their talents and careers at IAG. However, there is still a disparity of women to men in management at IAG, and we will review our performance in 2006/07 to determine if we need to do more to redress the balance.

The work we have done to date in Australia was acknowledged by EOWA, which awarded IAG with “Employer of Choice for Women” status for the second year in a row.

Providing development opportunities to our employees

Skilled and well-trained employees provide the right information in the right way to customers when and how they need it. Providing our employees with development opportunities is also one way of demonstrating how we value their contribution, and this in turn drives engagement.

The development programs available to employees cover subjects such as occupational health and safety, product knowledge, communication skills, customer service and equal employment opportunities. More business-specific content is covered off by each of the major divisions. We offer both facilitator-led and online courses, providing access to over 200 web-based programs.

Our approach to running a sustainable business means we are asking our managers to consider issues outside the financial domain, and to build relationships with many stakeholders. This is a complex proposition. We help them step up to this challenge by providing executive coaching and self-awareness tools that provide insight into their leadership styles. We also continually identify internal and external programs for development opportunities that can meet the ever-changing needs of our management team.

In addition, every year our Executive team and the top 120 leaders come together to explore key business issues in the context of our long-term strategies, as well as to develop leadership behaviours and capabilities.

We support our employees in pursuing extra-curricular training and education. In New Zealand, the number of employees enrolling in insurance qualifications through the Australia New Zealand Institute for Insurance and Finance has doubled between 2004/05 and 2005/06. IAG employees regularly attend key conferences and seminars relevant to our business and their roles, and are encouraged to share the information gleaned at these events with their teams.

We also provide financial and leave support for those employees pursuing tertiary education and professional qualifications. Juggling the pressures of study with a job can be stressful, and we are keen to make this balance easier. The External Study Support policy provides our employees with a refund of fees upon completion of each subject, and conditional leave upon an acceptable level of work being maintained.

Communicating with and listening to employees

Our employees have told us that they like to be kept informed of where the company is headed. Our annual employee survey shows that 80% of survey respondents felt that IAG kept them well informed of any important changes to the business. Sixty-four percent felt that they had enough opportunities to provide input into any major changes that affect their work life, and 91% felt they have the information they need to do their jobs well.

We communicate to our employees through many channels, including weekly email bulletins, regular newsletters and videos. We create opportunities for our Executive team and managers to communicate decisions and findings from meetings to our employees at divisional meetings, senior manager meetings and team meetings.

In 2005, our CEO invited 600 people from across the business to hear him and the rest of the Executive team discuss company priorities and directions. This interactive day included presentations on strategy, purpose and values and included an expo of our major community partners.

Channels such as staff consultative committees, employee focus groups and CEO mailboxes provide employees with the opportunity to give suggestions and feedback.

Embedding sustainable principles in our policies

Our values of honesty, transparency, teamwork, meritocracy and social responsibility underpin our behaviour and decisions, and are the foundation for how we will deliver on our purpose. It is consistent and ethical behaviour – framed by our values - that drives good relationships with our stakeholders and, ultimately, long-term business value.

Our shared responsibility for behaviour that contributes to IAG’s sustainability is articulated in a series of Group-wide policies and commitments, including the:

• IAG Commitment to Sustainability;
• IAG Environmental Commitment;
• Charter for Health, Safety and Security;
• Code of Conduct; and
• Continuous Disclosure and Insider Trading Policy.

Being transparent and honest

We have a variety of avenues that our employees can use to report issues affecting the quality of our workplace. An employee’s direct manager is the first port of call, and frank and open discussions lead to a quick and satisfactory resolution in most instances. However, in those rare cases where this does not occur, we make other options available to our employees. These include a:

• dedicated help line for Human Resources issues (including discrimination, recruitment, staff development);
• Compliance Mailbox, which is an intranet tool used for reporting and managing compliance incidents;
• Accident/Incident and Hazard Management forms for reporting and managing workplace health and safety issues; and
• CEO mailbox allowing employees to report issues directly to the IAG CEO.

ActionLine is a confidential service for employees wanting to report serious inappropriate behaviour. Launched in October 2004, ActionLine is an extra reporting mechanism. It provides an additional point of escalation if all other management controls have failed or a person feels uncomfortable using the internal mechanisms, and supports IAG's Code of Conduct.

ActionLine is managed on our behalf by external consultants Deloitte. All reports of serious inappropriate behaviour are investigated and treated with discretion.

Building a safe workplace together

As a leading provider of workers’ compensation in Australia, we know a lot about safe workplace practices. We apply this knowledge to our own premises and operations, with the aim of providing a healthy, safe and secure environment for all our employees.

Our besafe program supports all our employees and provides guidance on how every individual can take responsibility for safety and preventing injuries. We also have a rigorous reporting and monitoring framework in place, and every manager and employee is required to undertake online training in OH&S.

In addition, IAG NZ offers flu vaccinations, pandemic planning, workstation assessments, and half yearly hazard audits.

Our safety performance for the year is indicated below. In Australia we have decreased our lost time injury frequency rate by more than 27% since 2003/04. These results are very pleasing and indicate our safety initiatives benefit our employees and the organisation.

Protecting human rights

The convergence of human rights and business responsibility is serious and complicated. For many years we have operated primarily as an Australian company, governed by national laws that protect human rights. As we have expanded our operations into Asia, we have been building our understanding of the variety of human rights issues. We recognise that we now need to examine how these relate to and impact our operations.

As we continue to expand, we must ensure that consistent approaches are adopted across all IAG’s businesses and considered in our future business relationships. To this end, we are consulting with our stakeholders on the IAG Code of Ethical Business Conduct. The Code will include the issue of human rights and our commitment to universally protect them.

This important policy must be underpinned by a considerable compliance framework to ensure our employees understand their responsibilities and Group expectations.

The work on the Code of Ethical Business Conduct is well advanced, and we are seeking senior-level approval of the policy and its management system. Once the Code is implemented in 2006/07, we will be able to provide links to this policy and discuss how we are maintaining the standards it outlines across our operations.