Environment, Social and Governance
Employee Engagement and Wellness
Engagement and wellbeing is key to Audinate’s success. Employee feedback provided through our annual engagement survey and mid-year pulse survey informed Audinate’s people and culture initiatives.
Survey results, including all employee comments, were shared with the Remuneration and Nomination Committee and the Board. Our engagement results are in the top quartile when compared with a global peer group of small technology companies. In an environment where most employees are working at least partly remotely, it was particularly pleasing to see results relating to work and life blend comparing favourably to the global peer group.
Wellbeing initiatives include an Employee Assistance Program providing a range of services including cost-free counselling for employees and immediate family members, wellbeing theme communications, and mental health first aiders. In FY22 Audinate again provided employees the opportunity to participate in a wellbeing challenge supported by online platform resources and had greater than 40% participation. During the FY22 period there were no incidents resulting in injury requiring WorkCover notification in Australia.
Diversity and Inclusion
Audinate has a strong commitment to diversity and recognises the value of attracting and retaining people with different backgrounds, knowledge, experiences, and abilities. The Company understands that diversity not only encompasses gender but extends to age, ethnicity, religious beliefs, cultural background, language, marital or family status, sexual orientation, gender identity, disability, socio-economic background, perspective, and experience.
Audinate’s ability to foster a diverse and inclusive workplace is essential to the Company’s ability to attract, engage and retain the talent crucial for ongoing success. The policies, practices and values of the Company ensure an environment in which individual differences are valued and all employees can realise their potential and contribute to the Company’s success.
Audinate is proud of the diversity of its people. Of the Company’s approximately 180 people across 12 countries, there are 26 nationalities and 30 countries of birth represented. There is also a broad representation of age groups, with the age range spanning 5 decades.
At the end of FY22 females represented 19% of Audinate’s workforce and 29% of the Senior Executive Team (CEO and executive direct reports). The female representation on Audinate’s board is 17%. Audinate is committed to supporting increased female employee representation and is mindful of several factors that influence this.
The gender mix in relevant talent pools continues to be a significant factor. In FY21 Audinate assessed that 79% of its roles required relevant engineering or related qualifications and/or AV industry experience. The 19% female composition of the overall Audinate workforce is more favourable than the gender mix in the available talent pools according to available data. Nonetheless, Audinate is committed to practices and an environment that provides increased opportunities for female representation.
More detail is contained in the Company’s Diversity Policy.
|Country of Birth||%|
|Various (25 countries)||21%|
|21 - 24||2%|
|25 - 34||23%|
|35 - 44||35%|
|45 - 54||29%|
|55 - 64||7%|
Diversity and inclusion objectives
Audinate committed to several objectives fostering a diverse and inclusive workplace over a two-year period ending 30 June 2022. Objectives included improvements to recruitment processes, an employer branding strategy and training resources to embed diversity and inclusion into our recruitment strategy. Consultation with employees regarding future ways of working has resulted in a refinement of our hybrid work policies. Many employees have embraced working from home as a result of the positive experience during the pandemic.
An enhanced global Paid Parental Leave Policy was approved for new parents offering paid leave for primary and secondary carers. Paid parental leave supports employees with families.
Employees were consulted on diversity via the annual employee engagement survey. Answers to questions asking whether people have equal opportunities to succeed irrespective of gender, and whether people from all backgrounds have equal opportunities to succeed at Audinate were overwhelmingly positive. Training on the Prevention of Discrimination and Harassment and our Appropriate Workplace Behaviour Policy was provided throughout the Company during the year.
Audinate set an aspirational objective for 30% of people manager vacancies to be filled by females. The purpose of the objective is to build an environment that fosters female participation and to increase female candidate pools for future senior executive opportunities. Across FY21-FY22 32% of these vacancies were filled by females.
Covid-19 has continued to impact our way of working and Audinate is piloting a Hybrid Work Policy (formerly the Interim Flexible Work Location Policy). This policy will continue to be refined over time as Audinate gains experience with remote working practices and develops further understanding of how best to support flexible working.
Audinate’s Board and management are committed to high corporate governance standards and to actively managing and responding to risks and opportunities. We have a number of Board endorsed policies and statements which focus on company culture including Corporate Governance Statement, Code of Conduct and Diversity policies:
Corporate Governance Statement
Audit and Risk Management Committee Charter
Remuneration and Nomination Committee Charter
Continuous Disclosure Policy
Shareholder Communications Policy
Risk Management Policy
Securities Trading Policy
Code of Conduct
Audinate Visions & Values
All of these documents are regularly reviewed and updated as necessary.
The Board aims to comprise directors with a broad range of skills, expertise, and experience from a diverse range of backgrounds that is appropriate to the Company and its strategy. The Board, together with the Remuneration and Nomination Committee, regularly reviews the skills required by the business and represented by the Directors of the Board. Together they will determine whether the composition and mix of those skills remain appropriate for the Company’s strategy, subject to limits imposed by the constitution. The Board Skills Matrix includes the following:
- Strategic and commercial acumen
- Corporate governance experience
- Financial acumen
- Risk and compliance expertise
- Global technology business to business experience
- Marketing / new product development skills
- Manufacturing expertise
- Executive leadership
- Technology infrastructure
- People, culture and conduct
- Mergers and acquisitions experience
- Equity and debt capital markets expertise
Audinate has a sound and robust risk management framework to identify, assess and appropriately manage risks. It regularly reviews and updates a detailed risk register as the risk landscape evolves. A summary of significant risks is detailed in the table below. The table below is not exhaustive and reflects a specific point in time.
We do not purport to list every risk that may be associated with Audinate’s business or the industry in which Audinate operates – the severity of risks assessed is dynamic and may change quickly, new risks may arise and other risks may be addressed or mitigated. Any of these risks and other emerging risks or matters may have a material adverse effect on the business and its financial position and performance.
More detail is contained in Audinate’s Risk Management Policy.
|Video market||As Audinate evolves to provide more video offerings this exposes the business to a new series of risks, including ability to attract new customers, competition from other video technology providers, effective product and strategy formulation, and execution risk. If the company fails to effectively manage and respond to these risks it could adversely affect our financial results.|
|Geopolitical risks||As a global business Audinate is exposed to geopolitical risks. This includes increased complexity in China – specifically risks around chip supply, manufacturing in China, exporting from HK and implications for tariffs or other trade practices.|
|Protection of intellectual property||The value of Audinate’s products is dependent on Audinate’s ability to protect its intellectual property, including business processes and know-how, copyrights, and trademarks. There is a risk that Audinate may be unable to detect the unauthorised use of its intellectual property rights in all instances. Furthermore actions Audinate takes to protect its intellectual property may not be adequate or enforceable, and failure to protect these rights may impact on operations and financial performance.|
|Global pandemics (COVID-19)||Pandemic outbreaks including COVID-19 can cause disruption to and significant impact to global economies, businesses, supply chains and our workforce.|
|Dante product shortages||Inability of Audinate to meet market demand for our Dante products, as a result of component shortages or other reasons, may jeopardise future growth if customers design out our technology and do not incorporate into new products as often.|
|Internal product deferral||Re-design of existing products (due to chip shortages) impacts Audinate’s ability to develop and release new technology.|
|Technology development risks||Audinate faces a series of risks associated with the ongoing development of its technology. These include the unlicensed use of 3rd party IP in our products exposing the business to liability and litigation. There are also challenges associated with age and nature of our technology platform, including hardware components coming end of life and the complexities of software development on an increasingly large and intricate technology platform.|
|Acquisition risks||There is a risk that Audinate undertakes a poor or expensive acquisition which would be detrimental to shareholder value.|
|Failure to attract and retain customers||Our business relies upon the ability to retain existing customers, attract new business from existing customers as well as attract new customers. It is strategically important for Audinate to reduce the cost barrier of implementing Dante whilst still being fairly compensated for our technology. If the rate of adoption diminishes or declines this would adversely impact financial performance.|
|General economic and financial market conditions||The operating and financial performance of Audinate is influenced by a variety of general domestic and global economic and business conditions that are outside the control of Audinate. There is a risk that prolonged deterioration in general economic conditions may negatively impact the demand for Audinate’s products and negatively impact Audinate’s financial performance, financial position, cash flows, dividends, growth prospects and share price.|
|Cyber security||Audinate recognises the evolving risks associated with data and cyber security, and the potential impact to the Company’s reputation and business activities. These risks are proactively managed through a Cyber Security Steering Committee, a Security Operations function and a cross-functional Security Operations Working Group. The Board Audit and Risk Management Committee has oversight of Audinate’s approach to cyber security. This structure aims to monitor security risks, work with partners to establish robust security protocols, educate employees, and implement and manage Audinate security controls, policies and procedures. No material breaches of Audinate data security were identified in FY22.|
|Supply chain||See separate section on supply chain.|
In addition to the risks described in the table above, Audinate faces other business risks including (but not limited to) competition in audio networking, industry standardisation, ability to attract and retain staff, effectively managing trade secrets, ESG risks, short-selling, impact of tariffs and foreign currency exchange risks.
Supply Chain Management
When selecting suppliers and contract manufacturers, Audinate evaluates the quality of their products as well as related controls and processes. Audinate assesses any potential new suppliers through an onboarding process to ensure consistency with our internal standards. Audinate has a long-standing practice of directly managing relationships with key component suppliers rather than relying on contract manufacturers to source all components for the following reasons:
- Direct evaluation of key component suppliers is part of our quality assurance process;
- Negotiating improved pricing or supply arrangements for both Audinate and our OEM customers;
- Managing lead-times and supply chain risk directly; and
- Fostering direct relationships with key technology suppliers and partners.
Our main contract manufacturer, VTech Holdings Limited (‘VTech’) is listed on the Hong Kong Stock Exchange and operates manufacturing facilities in mainland China and Malaysia. VTech publishes an annual Sustainability Report, which includes statements on ISO 9001 accreditation and compliance with Modern Slavery and Conflict Minerals regulation. Our other key suppliers and partners are leading global technology companies and publish similar annual reports.
An audit of key suppliers was completed during FY22 to identify and manage relevant risks in our manufacturing supply chain. Supplier risk management procedures and controls were reviewed with reference to the following criteria:
- Quality assurance considerations relating to repair and maintenance, training and development and where relevant production, manufacturing and calibrations including quality assurance set out in industry standards such as ISO 9001;
- Compliance and ethical considerations including compliance with Modern Slavery Act requirements, prohibitions on child labour, compliance with conflict minerals regulations, worker health and safety, discrimination, compensation and renumeration;
- Commitment to minimising impact on the environment within their manufacturing operations, utilising management systems such as ISO 14001; and
- Governance, risk and control processes in place to manage operations, including supplier supervision, counterfeit avoidance measures, stakeholder engagement and disclosures.
The audit showed our supply chain risk management controls to be generally satisfactory and did not identify any substantial residual ESG risks in our supply chain.
A supplier code of conduct is under development to improve supply chain transparency and to assist supplier understanding of the required standards.
Audinate’s long term strategy is to reduce the amount of on-premises AV equipment and facilitate a transition to AV services in cloud-based software form. Amongst other things, this will improve societal environmental outcomes by ensuring improved au
Deployment of Audinate technology is expected to reduce the amount of on-premises AV equipment and facilitate a transition to AV services in cloud-based software form. Amongst other things, this will improve societal environmental outcomes by ensuring improved audio-visual experiences for people, improving virtual collaboration and hybrid working arrangements. We recognise the importance of minimising the environmental impact of our business, as well as the opportunity for our technology to help our customers and end-users minimise the environmental impacts of their operations.
As a software technology provider, Audinate’s environmental footprint is relatively small across our global operations. We are committed to taking ongoing steps to reduce the environmental impacts of our business and are in the early stages of investigating and measuring our environmental footprint during FY23.
Global Reporting Initiative (GRI) – new in FY22
We have used the principles of The Global Reporting Initiative (GRI) Sustainability Reporting Standards (Core option) to broadly guide our disclosures. The Audinate GRI Index of our ESG disclosures against the GRI Reporting Standards should be read in conjunction with the rest of Audinate financial statements, including our FY22 Remuneration Report and the Audinate Corporate Governance Statement.