BWP TRUST ANNUAL REPORT 2015
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>> the extent to which the skills, knowledge and experience of the
person (and additional qualities that add to the diversity of the
Board) complement the qualifications, expertise and experience
of incumbent directors;
>> the professional and personal reputation of the person; and
>> any person nominated as an executive director must be of
sufficient stature and security of employment to express
independent views on any matter.
A Board skills matrix was developed by the Board in 2012 and
has been referred to extensively during the Board renewal process
that has been underway since 2012. Expertise identified as key or
complementary are shown in Table 1. All of these competencies
are represented on the current responsible entity board.
Table 1: Skills and experience
Key skills and
experience
Complementary skills and
experience
Property experience in the
REIT sector
Commercial
ASX listed entity experience
Executive/business leadership
Financial acumen
Property valuations
Governance & regulatory
compliance
Board experience
In addition to the skills and experience in Table 1, the Board expects
its directors to have fundamental qualities such as honesty and
integrity, interpersonal skills, good instincts and judgement, and a
commitment to contribute and create value for unitholders.
All non-executive directors are expected to voluntarily review their
membership of the Board from time to time taking into account length
of service, age, qualifications and expertise relevant to the responsible
entity’s then current policy and programme, together with the other
criteria considered desirable for composition of a balanced board and
the overall interests of the responsible entity and the Trust.
In addition, each quarter, all non-executive directors are required to
review the number of directorships that they hold and confirm that
they are able to devote sufficient time and attention to properly fulfil
their duties and responsibilities to the Board of the responsible entity.
NEWAPPOINTMENTS PROCESS
Two additional directors were appointed to the Board during
the year. Prior to their appointments, appropriate checks were
undertaken with regard to character, experience, education,
criminal record and bankruptcy history. No adverse information
was revealed by the checking process. The responsible entity has
a written agreement with each director setting out the terms of
their appointment.
Both directors met with the Board and management prior to their
appointments and were provided with extensive induction materials
to assist them to perform their roles effectively from inception.
DIRECTOR INDEPENDENCE
The rules and regulations applicable to managed investment
schemes rely on the “external†director component of a
responsible entity board (or its compliance committee) to ensure
there is an adequate level of independence on the board.
It is the responsible entity’s policy that the board composition
will comprise a majority of non-executive directors who meet the
external director requirements and who the Board considers are
able to bring an independent view to the Board’s deliberations.
Six of the responsible entity’s eight directors are considered by
the Board to be external directors as defined by section 601JA
of the Act (refer Compliance Committee above for section 601JA
requirements). Of the seven non-executive directors, Tony
Howarth is the one exception by virtue of his directorship on the
Wesfarmers Limited Board.
In making an assessment of each director’s “external†status, the
Board considers all relevant facts and circumstances. It takes
into account if a director has any of the relationships or interests
described under section 601JA of the Act and whether that
relationship or interest is material.
The test of whether a relationship or interest is material is
based on the nature of the relationship or interest and on
the circumstances and activities of the director. Materiality is
considered from the perspective of the Trust, the persons or
organisations with which the director is associated, and from the
perspective of the director.
The Board reviews the “external†status of its directors
before they are appointed, on an annual basis, and at the
commencement of any significant transactions requiring
unitholder approval.
In the Board’s review of each of the directors in office at the date
of this report the following deliberations were made in respect of
Tony Howarth.
Tony Howarth was nominated to the Board byWesfarmers Limited
and is a director on theWesfarmers Limited Board. For these
reasons, Mr Howarth is not eligible to be considered an “externalâ€
director of the responsible entity. However, Mr Howarth is not on
the Bunnings Group Limited Board (theWesfarmers entity with
which the Trust conducts most of its related party transactions), and
he has no direct involvement with that business. Accordingly, the
responsible entity’s Board is satisfied there are few instances under
which his dual board roles are likely to create a conflict of interest for
him. Where significant transactions between Bunnings and the Trust
require both unitholder approval andWesfarmers Board approval,
Mr Howarth limits his participation on one, or both, of the boards in
relation to that transaction in order to appropriately deal with any
perceptions of a conflict of interest.
Overall, the Board is satisfied that all directors bring an
independent judgement to bear on Board decisions in relation
to the affairs of the Trust and its unitholders, but the Board also
accepts there is a need to manage the potential for any perception
that Tony Howarth’s dual board roles could lead to a conflict of
interest in some circumstances.
