The Board regularly assesses the independence of its Directors, in light of interests disclosed to it. Directors of the Responsible Entity are not technically subject to the approval of security holders. However, the Board has determined that all Directors other than the CEO, will stand for election by DEXUS stapled security holders. If a nominated Director fails to receive a majority vote that Director will not be appointed to the Board of DXFM. DXFM Directors, other than the CEO, will hold office for three years, following their first appointment (or, if appointed by the Board between DEXUS Property Group Annual General Meetings, from the date of the Annual General Meeting immediately succeeding this appointment). It is not generally expected that an Independent Director would hold office for more than ten years, or be nominated for more than three consecutive terms, whichever is the longer.
The Chair is an Independent Director, and is responsible for the leadership of the Board, for the efficient organisation and conduct of the Board’s functions, and for the briefing of Directors in relation to issues arising pertinent to the Board. The Board has clearly defined the responsibilities and performance of the CEO. The performance of the CEO is monitored by the Chair.
CVs outlining the skills and experience of each Director are set out in this Annual Report. Please refer to www.dexus.com/Corporate-Governance for a description of the procedure followed to select and appoint new Directors to the Board of DXFM, which includes specific criteria applied to determine Director independence.
Performance
To ensure that new Directors are able to meet their responsibilities effectively, Directors receive an information pack and induction briefing, which addresses the corporate governance framework, committee structures and their terms of reference, governing documents and background reports. New Directors also attend specific briefings by DEXUS management on business strategy and operations. In addition, Directors undertake training, through regular presentations by management and external advisers on sector, fund and industry specific trends and conditions throughout the year. Directors are also encouraged to:
take independent professional advice, at the Group’s expense and nnindependent of management;
seek additional information from management; and nn
directly access the Company Secretary, General Counsel, Head of nnRisk and Compliance and other DEXUS executives as required.
The Board Nomination and Remuneration Committee oversees the Board performance evaluation program which extends over a two year period. The process is designed to identify opportunities for performance improvement. In 2008, the evaluation process looked at the performance of the whole Board and its Committees. In 2009, individual Director performance will be evaluated later than scheduled, to enable new Directors to become familiar with the strategy and structures that guide the Group. In each alternate year the Board also reviews the progress of findings of the previous year’s evaluation. The evaluation is undertaken through the use of questionnaires and face to face interviews on a broad range of issues.
Governance
The Board has established a number of committees to assist it in the fulfilment of its responsibilities. Following the appointment of two new Directors, Board Committees were reviewed and memberships refreshed in May 2009. Committee Chairs were also rotated in August 2009. The Board and Board Committee Terms of Reference are revised at least annually.
Board Nomination and Remuneration Committee
A Board Nomination and Remuneration Committee has been established to oversee all aspects of Director and Executive remuneration, Board renewal, Director, CEO and management succession planning, Board and Committee performance evaluation, training and Director nominations. It comprises three Independent Directors.
The members of the Board Nomination and Remuneration
Committee are:
John C Conde AO, Independent Director (appointed a member on
nn1 May 2009 and Chair on 1 September 2009)
Christopher T Beare, Independent Directornn
Stewart F Ewen OAM, Independent Directornn
Reporting to the Board Nomination and Remuneration Committee and the Executive Committee, the Compensation Committee oversees the development and implementation of human resource management systems and advises the Board Nomination and Remuneration Committee. The Board Nomination and Remuneration Committee
also has the power to engage external consultants independently of management.
Remuneration and incentive payments for employees are considered
by the Compensation Committee following guidance from the Board Nomination and Remuneration Committee. Recommendations to the Board Nomination and Remuneration Committee are based on the achievement of approved performance objectives and market comparable data. Details of the Group’s remuneration framework for Executive, Non-Executive Directors and employees are set out in the Remuneration Report that forms part of the Directors’ Report contained in this Annual Report. In 2009 there were no base salary increases for DEXUS senior management and no fee increases for Directors. There are no schemes for retirement benefits (other than superannuation) for Non-Executive Directors.
DEXUS PROPERTY GROUP Annual REPORT 2009
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