Principle 2 - Structure the Board to Add Value
- Board and Board Committee Terms of References
- Selection and Appointment of Non-Executive Directors Policy
- Board Membership Policy
- Directors’ Code of Conduct
2.1 Dexus corporate governance structure
The following Committees support the Board in discharging its responsibilities:
- Board Audit Committee
- Board Nomination Committee
- Board People & Remuneration Committee
- Board Risk Committee
Board Committee membership and responsibilities are revised regularly to ensure maximum effectiveness. The Terms of Reference for the Dexus Board and the Board Committees are reviewed at least annually.
Non-Executive Directors have a standing invitation to attend any or all Board Committee meetings. Each Board Committee meeting considers improvements to reporting or processes that would benefit the Committee, as well as any items that require immediate reference to the Board or a regulator (where applicable).
The Board Nomination Committee oversees all aspects of:
- Board renewal
- Board and Board Committee performance evaluation
- Director nominations
During the Reporting Period, the members of the Board Nomination Committee were:
- Richard Sheppard, Chair, Non-Executive Director (Chair)
- John Conde AO, Non-Executive Director
- Penny Bingham-Hall, Non-Executive Director
The Board Nomination Committee met twice throughout the Reporting Period and all members attended all meetings.
The Board Nomination Committee Terms of Reference can be found at www.dexus.com/boardcommittees
The Board and Board Committees are supported by Management Committees as set below (as at 30 June 2017):
|To lead and guide the Board|
1 Non-executive Chair
|To ensure that the fiduciary and statutory obligations to its Investors are met. Meets at least eight times a year.|
|Board Risk Committee
T Dwyer (Chair)
|Board Audit Committee
P St George (Chair)
|Board Nomination Committee
R Sheppard (Chair)
|Board People & Remuneration Committee
J Conde (Chair)
|4 Non-executive Directors||4 Non-executive Directors||
3 Non-executive Directors
|3 Non-executive Directors|
|To assist the Board and Dexus’s third party clients and capital partners in fulfilling their responsibilities as they relate to risk management (including Work, Health & Safety), compliance
management, internal audit, and sustainability practices and procedures. Meets at least four times a year.
|To assist the Board in fulfilling its responsibilities by reviewing the integrity and quality of the Group’s financial statements and disclosures including auditing, accounting and financial reporting processes. Meets at least four times a year.||To assist the Board in fulfilling its responsibilities by overseeing all aspects of Board nomination and performance evaluation (including for other entities within the Group, where applicable). Meets at least twice a year.||To assist the Board in fulfilling its responsibilities by overseeing all aspects of Director, Group Management Committee and Key Management Personnel remuneration and also oversees aspects of human resources management. Meets at least three times a year.|
|Group Management Committee
D Steinberg (Chair)
CEO & Executive Director
|To ensure that the financial and human resources of DXFM are efficiently and effectively employed in the achievement of its operational and strategic objectives.
Meets weekly, or more often as required.
2.2 Board skills matrix
The Board Nomination Committee is responsible for reviewing the size, composition, diversity, skill and desired competencies of the Board and Board Committees (and recommending approval by the Board).
The Board Nomination Committee has identified the skills and expertise deemed necessary for the Board to fulfil its obligations. The following table outlines the required skills and expertise that the Board should possess.
Areas of Skills & Expertise
- Directorship experience (past & present)
- Senior management experience
Capital and funds management
- Experience in the dynamics of raising capital and investment banking
- Experience in the management of third party funds
Finance & accounting
- Experience in analysing accounting material & financial statements and assessing financial viability
- Experience in understanding financial drivers/funding and business models
- Experience with corporate governance and standards of complex organisations
- Ability to assess and commitment to ensure the effectiveness of governance structures
People management & remuneration
- Experience in people management and influence organisational culture
- Experience in relation to remuneration and the legislation/framework governing remuneration
Property experience (including developments)
- Experience and industry knowledge in the management of properties including property development
- Understanding of stakeholder needs and industry trends
- Experience in managing areas of major risk to the organisation
- Experience in workplace health & safety, environmental and technology matters affecting organisations
- Experience in mergers & acquisitions activities
- Ability to guide and review strategy through constructive questioning and suggestions
- Experience in successful implementation of strategy
The Board has also determined that, along with individual director performance, director diversity is integral to a well- functioning board.
The Board has reviewed the skills of the current directors against the skill categories in the table above and determined that the current composition of the Board meets or exceeds the minimum requirements in each category.
2.3 Size and tenure
Dexus has determined that the size of the Board should be small enough to be able to act quickly, but large enough to ensure a diverse range of views is provided on any issue.
At 30 June 2017, the Board comprised eight members including seven independent Non-Executive Directors and the Chief Executive Officer & Executive Director. The DXFM constitution allows for the appointment of up to 10 directors.
Details of directors as at 30 June 2017 are:
|Name||Independent||Qualifications||Date Appointed||Years served|
|W Richard Sheppard (Chair)||Yes||BEc (Hons), FAICD||
1 January 2012
|5 years 6 months|
|Elizabeth A Alexander AM||Yes||BComm, FCA, FAICD, FCPA||1 January 2005||12 years 6 months|
|Penny Bingham-Hall||Yes||BA (Industrial Design), FAICD, SF (Fin)||10 June 2014||3 years|
|John C Conde AO||Yes||BSc, BE (Hons), MBA, FAICD||29 April 2009||8 years 2 months|
|Tonianne Dwyer||Yes||BJuris (Hons), LLB (Hons)||24 August 2011||5 years 10 months|
|Mark H Ford||Yes||Dip Tech (Comm), CA, FAICD||1 November 2016||8 months|
|Peter B St George||Yes||CA(SA), MBA||29 April 2009||8 years 2 months|
|Darren J Steinberg||No||BEc, FAICD, FRICS, FAPI||1 March 2012||5 years 4 months|
2.4 Board independence
Non-Executive Directors must be free of any business or other relationship that could interfere materially with the exercise of their unfettered and independent judgement.
The Board has determined that each Non-Executive Director is independent as each Non-Executive Director:
- Is not a substantial Security holder of Dexus, nor otherwise associated with a substantial Security holder of Dexus
- Is not employed, nor within the last three years has been employed, in an executive capacity by Dexus
- Has not been, within the last three years, a principal or an employee of a material professional adviser or a material consultant to Dexus
- Has not been a material supplier or customer of Dexus, or otherwise associated with a material supplier or customer
- Has no material contractual relationship with Dexus (other than as a Non-Executive Director of Dexus)
Has not served on the Board for a period which could, or could reasonably be perceived to, interfere materially with the director’s ability to act in the best interests of Dexus
- Is free from any interest and any business or other relationship which could, or could reasonably be perceived to, interfere with the director’s ability to act in the best interests of Dexus Is free from family ties or cross-directorships that may compromise director independence
The Board regularly assesses the independence of its directors in light of interests disclosed to it and has determined that each Non-Executive Director has maintained independence throughout the year. The Chair is independent and not the same person as the Chief Executive Officer.
2.5 Induction programs for new Directors
The Induction Program for newly appointed directors is comprehensive and includes familiarisation with specific structures, policies and legal documents including (but not limited to):
- Outline of the Corporate and Committee structure
- Organisational charts providing details of business units
- Terms of Reference for the Board and Board Committees
- Minutes of the previous Board and Board Committee meetings
- A copy of the Constitution
- A copy of the Business Plan
- Dexus Compliance Management Framework
- Dexus Risk Management Framework
- Dexus Risk Appetite Statement
- Key Dexus policies including:
- Directors’ Code of Conduct
- Securities Trading (including inside information) Policy
- Continuous Disclosure Policy
A newly appointed Non-Executive Director will meet with key members of management who will provide an overview of their areas of responsibility. Newly appointed Non-Executive Directors are encouraged to attend each of the Board Committee meetings to assist in understanding the Dexus business model and approach to corporate governance.
The Board generally meets monthly between February and November, with additional meetings held throughout the year as required. A Board Calendar is developed and agreed at least 12 months ahead of the new calendar year. The calendar provides dates of Board and Board Committee meetings.
Board meetings are normally held at the registered office of Dexus, although some meetings may be held ‘offsite’ allowing directors to visit Dexus owned and managed properties. To maximise participation, video conferencing facilities are utilised as required.
Each standard Board meeting includes a Non-Executive Director only session, led by the Chair, followed by a session in which the Executive Director joins the meeting. The remaining members of the Group Management Committee including the Company Secretary then join the meeting.
Senior management is also available to provide clarification or answer questions directors may have either prior to the Board meeting or may be invited to attend and present at Board meetings.
Board and Board Committee papers are provided to directors electronically at least three business days prior to the relevant meeting.
Any Action Items identified by the directors are recorded in the minutes. The Company Secretary ensures that the Action Items are appropriately addressed and progress reported to the Board.
Agenda items for Board meetings are set by the Chair in conjunction with the Chief Executive Officer and Company Secretary and include (but are not limited to):
- Chief Executive Officer’s report
- Company Secretary’s report
- Minutes of Board Committee meetings
- Reports on asset acquisitions, divestments and developments
- Management presentations
- Other business where directors can raise any topical matters
Please refer to the Governance dashboard in this Governance Statement and the Active Governance Statement timeline on pages 18-19 of Dexus’s 2017 Annual Report for some of the activities overseen and addressed by the Board during FY17.
Directors are required to attend all scheduled meetings unless prior approval is provided by the Chair. For the year to 30 June 2017, there was 100% attendance of Non-Executive Directors at all Board and Board Committee meetings (for which they are a member).
2.7 Access to training and information
Directors receive regular presentations by management and external advisers regarding sector, fund, and industry specific trends. Non-Executive Directors are encouraged to seek additional information from management as necessary.
Non-Executive Directors also attend property tours and are encouraged to pursue professional development opportunities at the Group’s expense.
Should a Non-Executive Director wish to seek independent professional advice that they believe is necessary to discharge their responsibility as a director, the matter is initially referred to the Chair. Where the Chair determines it is appropriate that advice be sought by the Non-Executive Director, Dexus will pay for such advice.
2.8 Membership on other Boards
The Board acknowledges that membership of other boards is beneficial and accordingly supports and encourages its members to hold directorships on other boards including charitable, community and other not-for-profit boards.
The Board also acknowledges that concurrent service on multiple boards by Dexus directors may impact their overall performance and ability to devote adequate time to each board/position. The Board recognises that the time required to fulfil each directorship role varies and, as a result, has determined that it is not appropriate to set a limit on the total number of directorships held.
Directors will consider the number of directorships they hold to ensure they have sufficient time to attend to the affairs of Dexus. Should a director wish to accept directorships in addition to those already held, the matter is referred to the Chair for approval.