Corporate Governance Statement (continued)
1.5 Directors’ Independence
The Board considers that it should include significant representation by
Directors who are capable and willing to make decisions which are in
the best interests of members, free from interests and influences which
conflict with that duty and are also independent of management.
The Board assesses the independence of each Director in accordance
with the terms of the Board Charter, the interests they have disclosed
and such other factors as the Board determines are appropriate to
take into account. This assessment is carried out upon appointment,
annually and on an ongoing basis where circumstances in relation to a
Director may warrant reconsideration.
In making this determination the Board sought to assess whether
– independent of management; and
– free of any business or other relationship that could materially
interfere or be perceived to materially interfere with their unfettered
and independent judgement; and
– capable of making decisions without bias and which are in the best
interests of all members.
As noted in the Corporate Governance Principles and
Recommendations, the determination of independence as it relates to
the Trust as an externally managed entity, is made in relation to the
Responsible Entity in its corporate capacity rather than the Trust.
A non–executive Director is not regarded as an independent director if
– is a substantial securityholder of Scentre Group or an officer of, or
otherwise associated directly with, a substantial securityholder of
Scentre Group ;
– within the last 3 years had been employed in an executive capacity
by any member of Scentre Group, or has been a Director after
ceasing to hold any such employment;
– within the last 3 years had been a partner or a senior management
executive with audit responsibilities of a firm which has acted in the
capacity of statutory auditor of any member of the Group;
– within the last 3 years had been a principal, employee or consultant
of a material professional adviser to any member of the Group – for
this purpose a material professional adviser is an adviser whose
billings to the Group exceed 1% of the adviser’s total revenues;
– is a principal, employee or associate of a material supplier to, or
material customer of, any member of the Group – for this purpose
a material supplier to the Group means a supplier whose revenues
from the Group exceed 5% of the supplier’s total revenues. A
material customer is a customer whose payments to the Group
exceed 1% of the customer’s operating costs;
– has a material contractual relationship with any member of the
Group other than as a Director of the Board; and
– has any interest or business or other relationship which could
materially interfere with the Director’s ability to act in the best
interests of the Group and independently of management.
The Board currently comprises 8 members. Of these, applying the
above criteria, 5 are independent non–executive Directors. They
are: Mr Brian Schwartz, Mr Richard Egerton–Warburton, Mr Andrew
Harmos, Mr Michael Ihlein and Ms Aliza Knox.
These Directors are considered by the Board to be independent of
management and free from any business or other relationship or any
other circumstance that could materially interfere with the exercise of
objective, unfettered or independent judgement. Before commencing
on the Board, each non–executive Director signs a letter of appointment
which, amongst other things, requires each independent Director to
promptly and fully disclose to the Board any matter or circumstance
which may have impacted on their status as an independent Director, or
the likely perception of their status, as an independent member of the
Board. In addition, Directors also consult with the Chairman before
accepting any additional commitments which may impact or conflict
with the time Directors can devote to Scentre Group. If a Director
loses their status as an independent Director, that determination will be
reported to the market.
The Nomination Committee’s Charter sets out the process for selection
and appointment of new Directors and re–election of incumbent
Directors. The role and responsibilities of the Nomination Committee
are set out later in this statement.
1.6 Chairperson and Independence
The Responsible Entity notes the ASX Corporate Governance Council’s
recommendation 2.5 that listed entities should have an independent
director as Chairman. Recommendation 2.5 does not apply to externally
However, the Responsible Entity has, in previous reports, outlined
reasons why the Board considered Mr Frank Lowy as the most
appropriate person to act as the Chairman of then Westfield Group
boards, and now Scentre Group boards.
Mr Lowy is the co–founder of Westfield and has overseen the success
of Westfield since 1960. With almost 55 years direct experience in
the design, construction and management of shopping centres and
associated fund and asset management, Mr Lowy’s depth of knowledge,
range of experience and reputation is unrivalled in the industry. Mr
Lowy’s exposure to and understanding of the industry is considered to
be of significant value to the Board.
In Australia and internationally, Mr Lowy is regarded as an exceptional
and unique individual who has overseen the growth of a global retail
business which is widely regarded as a leader in its field.
For these reasons, the Board takes the view that it is in the best
interests of members that Mr Lowy, with his extensive background and
experience, be the Chairman of Scentre Group and the Trust.
In arriving at this view, the Board notes that there is presently a
majority of independent Directors on the Scentre Group Board. This
was also the case during the financial year.
1.7 The Company Secretary
The Company Secretary is appointed and removed by the Board. The
Company Secretary operates with the Chairman, the Board and the
Board Committees on all governance related issues. All Directors
have access to the Company Secretary for the purpose of obtaining
information or advice. The Company Secretary may also retain the
services of independent advisory bodies, if requested by the Board or
Board Committees. The Company Secretary is responsible for ensuring
proper processes and procedures are in place for the Board and Board
Committees and that these are complied with. The Company Secretary
also advises the Board and Board Committees on governance matters.
The office of the Company Secretary is responsible for developing
and managing the systems and processes that enable the Board to
perform its role and provides secretariat services for each of the Board
Committees. Committee agendas, papers and minutes are available to
all members of the Board.
The Company Secretary is accountable to the Board, through the
Chairman, on all governance matters.
32 / Carindale Property Trust
Annual Report 2015