Dexus

Governance and Remuneration

Our Board and Group Management Committee are committed to excellence in corporate governance and aspire to the highest standards of conduct and disclosure.

Governance

Good corporate governance is the foundation for the long-term success of the group, and the achievement of Dexus’s strategy is underpinned by a strong governance platform.

Our Board and Group Management Committee are committed to excellence in corporate governance and aspire to the highest standards of conduct and disclosure. To support this aspiration, we have embedded a set of well-defined policies and processes that enhance corporate performance and protect the interests of all key stakeholders.

We continue to focus on organisational culture by encouraging an environment where our people feel comfortable in raising issues and ensuring our Board and management are kept informed of incidents that may impact the business.

Our Board and its respective Board Committees have overall responsibility for corporate governance and are collectively responsible for the long term success of the group.

The Dexus Board and Board Committee membership
DirectorBoardAudit
Committee
Risk
Committee
People &
Remuneration
Committee
Nomination
Committee
Richard Sheppard
Darren Steinberg
Penny Bingham-Hall
John Conde
Tonianne Dwyer
Mark Ford
The Hon. Nicola Roxon
Peter St George
DirectorBoardAudit
Committee
Risk
Committee
People &
Remuneration
Committee
Nomination
Committee
Richard Sheppard
Darren Steinberg
Penny Bingham-Hall
John Conde
Tonianne Dwyer
Mark Ford
The Hon. Nicola Roxon
Peter St George
Chair and member
Member
SWIPE
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Board of Directors

Our Board comprises a majority of Independent Directors with all directors other than the CEO being Independent Non-Executive Directors. The Board currently consists of seven Independent Non-Executive Directors and one Executive Director.

The Board renewal process over the past several years has produced an experienced Board of Directors with a broad and diverse skill set. Our Board has determined that, along with individual director performance, diversity is integral to a well-functioning board. We also acknowledge that an effective Board relies on board members with different tenures. Our current focus is on Board renewal centred around the skills and experience needed to complement other directors.

From L to R: Penny Bingham-Hall, Mark Ford, The Hon. Nicola Roxon, Darren Steinberg, Richard Sheppard, Tonianne Dwyer, Peter St George, John Conde

Richard Sheppard
Chair and Independent Director
BEc Hons, FAICD

Appointed to Board on 1 January 2012

Richard Sheppard is both Chair and Independent Director of Dexus Funds Management Limited, Chair of the Board Nomination Committee and a member of the Board People & Remuneration Committee.

Richard is a Director of Snowy Hydro Limited, Star Entertainment Group and the Bradman Foundation.

Richard brings to the Board extensive experience in banking and finance and as a director and Chairman of listed and unlisted property trusts. He was Managing Director and Chief Executive Officer of Macquarie Bank Limited and Deputy Managing Director of Macquarie Group Limited from 2007 until late 2011. Following seven years at the Reserve Bank of Australia, Richard joined Macquarie Group’s predecessor, Hill Samuel Australia in 1975, initially working in Corporate Finance. Richard became Head of the Corporate Banking Group in 1988 and headed a number of the Bank’s major operating Groups, including the Financial Services Group and the Corporate Affairs Group. He was a member of the Group Executive Committee since 1986 and Deputy Managing Director since 1996. Richard was also Chairman of the Australian Government’s Financial Sector Advisory Council, Macquarie Group Foundation, Eraring Energy and Green State Power Pty Limited.

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Penny Bingham-Hall
Independent Director
BA (Industrial Design), FAICD, SF (Fin)

Appointed to Board on 10 June 2014

Penny Bingham-Hall is an Independent Director of Dexus Funds Management Limited, Chair of the Board People & Remuneration Committee and a member of the Board Nomination Committee and Board Risk Committee.

Penny is a Non-executive Director of Fortescue Metals Group Ltd, BlueScope Steel Limited, Port Authority of NSW and Taronga Conservation Society Australia. She is also an independent director of Crescent Foundation and Macquarie Specialised Asset Management Limited.

Penny has broad industry experience having spent more than 20 years in a variety of senior management roles with Leighton Holdings Limited including Executive General Manager Strategy, responsible for the Group’s overall business strategy and Executive General Manager Corporate, responsible for business planning, corporate affairs including investor relations and governance systems. She is a former director of the Australian Postal Corporation, SCEGGS Darlinghurst Limited and the Global Foundation. Penny also served as the inaugural Chair of Advocacy Services Australia Limited from 2008 to 2011.

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John Conde AO
Independent Director
BSc, BE (Hons), MBA, FAICD

Appointed to Board on 29 April 2009

John Conde is an Independent Director of Dexus Funds Management Limited and Dexus Wholesale Property Limited and a member of the Board Audit Committee and Board Nomination Committee.

John is the Chairman of Cooper Energy Limited and the McGrath Foundation. He is President of the Commonwealth Remuneration Tribunal (as President, John automatically serves as a Member of the Independent Parliamentary Expenses Authority) and Deputy Chairman of Whitehaven Coal Limited.

John brings to the Board extensive experience across diverse sectors including commerce, industry and government. He was previously Chairman of Bupa Australia Holdings Pty Limited, Ausgrid (formerly EnergyAustralia), Destination NSW, Sydney Symphony Orchestra and the Australian Olympic Committee (NSW) Fundraising Committee. John was Director of BHP Billiton and Excel Coal Limited, Managing Director of Broadcast Investment Holdings Pty Limited, Director of Lumley Corporation and President of the National Heart Foundation of Australia.

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Tonianne Dwyer
Independent Director
BJuris (Hons), LLB (Hons)

Appointed to Board on 24 August 2011

Tonianne Dwyer is an Independent Director of Dexus Funds Management Limited and Dexus Wholesale Property Limited, Chair of the Board Risk Committee and a member of the Board Audit Committee.

Tonianne is a Director of OZ Minerals Limited, ALS Limited, Metcash Limited and Queensland Treasury Corporation. She is also Deputy Chancellor and a member of the Senate of the University of Queensland.

Tonianne brings to the Board significant experience as a company director and executive working in listed property, funds management and corporate strategy across a variety of international markets. She was a Director from 2006 until 2010 of Quintain Estates and Development - a listed United Kingdom property company comprising funds management, investment and urban regeneration - and was Head of Funds Management from 2003. Prior to joining Quintain, Tonianne was a Director of Investment Banking at Hambros Bank, SG Cowen and Societe Generale based in London. She also held directorships on Cardno Limited, the Bristol & Bath Science Park Stakeholder Board, and on a number of boards associated with Quintain’s funds management business including the Quercus, Quantum and iQ Property Partnerships.

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Mark Ford
Independent Director
Dip. Tech (Commerce), CA, FAICD

Appointed to Board on 1 November 2016

Mark Ford is an Independent Director of Dexus Funds Management Limited and a member of the Board Audit Committee and Board Risk Committee.

Mark is Chair of Kiwi Property Group and Non-executive Director of the manager for China Commercial Trust. He is a Director of Prime Property Fund Asia.

Mark has extensive property industry experience and has been involved in Real Estate Funds Management for over 25 years. He was previously Managing Director, Head of DB Real Estate Australia, where he managed more than $10 billion in property funds and sat on the Global Executive Committee for Deutsche Bank Real Estate and RREEF. Mark was also a Director in the Property Investment Banking division of Macquarie and was involved in listing the previous Macquarie Office Fund. His previous directorships include Comrealty Limited, Property Council of Australia, Deutsche Asset Management Australia and he was also Founding Chair of Cbus Property Pty Limited and South East Asia Property Company. Mark previously held senior roles with Price Waterhouse and Macquarie Bank.

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Darren Steinberg
Chief Executive Officer and Executive Director
BEc, FAICD, FRICS, FAPI

Appointed to Board on 1 March 2012

Darren Steinberg is the CEO of Dexus and an Executive Director of Dexus Funds Management Limited.

Darren has over thirty years’ experience in the property and funds management industry with an extensive background in office, industrial and retail property investment and development. He has a Bachelor of Economics from the University of Western Australia.

Darren is a Fellow of the Australian Institute of Company Directors, the Royal Institution of Chartered Surveyors and the Australian Property Institute. He is a former National President of the Property Council of Australia and a founding member of Property Male Champions of Change. He is also a Director of VGI Partners Limited and a Trustee of the Museum of Applied Arts & Sciences.

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The Hon. Nicola Roxon
Independent Director
BA/LLB (Hons), GAICD

Appointed to Board on 1 September 2017

Nicola Roxon is an Independent Director of Dexus Funds Management Limited and a member of the Board People & Remuneration Committee and Board Risk Committee.

Nicola is an Independent Chair of HESTA and Non-executive director of Lifestyle Communities Limited. She is a Patron for the BreastWest Foundation. Nicola was previously Chair of Cancer Council Australia, Bupa Australia Holdings Pty Limited and the Accounting Professional and Ethical Standards Board.

Nicola has more than 20 years’ experience with background in the public sector and significant expertise in highly regulated consumer industries, professional services and the not-forprofit sector. She has deep industry knowledge of the health, government and professional service sector in positions including Federal Attorney General, Federal Minister for Health and Ageing, Member for Gellibrand and Industrial lawyer and advocate at Maurice Blackburn and the National Union of Workers.

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Peter St George
Independent Director
CA(SA), MBA

Appointed to Board on 29 April 2009

Peter is an Independent Director of Dexus Funds Management Limited, Chair of the Board Audit Committee and a member of the Board Risk Committee.

Peter is a Director of First Quantum Minerals Limited (listed on the Toronto Stock Exchange).

Peter has more than 20 years’ experience in senior corporate advisory and finance roles within NatWest Markets and Hill Samuel & Co in London. He acted as Chief Executive/Co-Chief Executive Officer of Salomon Smith Barney Australia/NatWest Markets Australia from 1995 to 2001. Peter was previously a Director of Boart Longyear, Spark Infrastructure Group, its related companies and SFE Corporation Limited.

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Board compostition
Boardprofessionalqualifications
Science
Economics
Commerce/Accounting
MBA
Law
Other
Boardtenure
0-3 years
3-6 years
6-9 years
9+ years
Board genderdiversity
Female
Male

Remuneration report

We are pleased to present the remuneration report which focuses on our remuneration strategy and outcomes, in addition to our people and culture highlights for the financial year ending 30 June 2019.

This year, Dexus continued to deliver strong results against key financial and non-financial measures set by the Board. Distribution per security growth was 5.0%, Return on Contributed Equity (ROCE) was 10.1%, and growth in Adjusted Funds From Operations (AFFO) per security was 5.5%. This result was achieved through the performance of our property portfolio, selective asset acquisitions, growth in our funds management business and the delivery of trading profits. Security holders were delivered outstanding returns in FY19 and our CEO and his management team were rewarded with above target incentive outcomes.

Importantly, this year’s outperformance was achieved while enhancing our platform’s footprint to grow in the future, as well as strong outcomes in safety, customer satisfaction, employee engagement and sustainability measures.

In our office portfolio we continue to outperform benchmarks over three and five years through higher rents and lower incentives. The securing of $3.1 billion of quality acquisitions increased our office exposure in core markets while enhancing our embedded pipeline of office development projects in both the Melbourne and Sydney CBDs. This was achieved while maintaining a strong and conservative balance sheet. Our funds management business grew to $16.2 billion through the introduction of significant new funds management partners and all funds achieved strong performance.

We are on track to achieve our gender diversity target of at least 40% female representation in senior and executive management roles by 30 June 2021. We have also been recognised externally by the Workplace Gender Equality Agency for our diversity achievements and as a pay equity ambassador.

Our customer Net Promoter score increased to +46 and our strong culture and engaged workforce was demonstrated through an employee Net Promoter score of +40. This year we progressed our goal to achieve net zero carbon emissions by 2030 and secured one of Australia’s first supply-linked Renewable Energy Supply Agreements.

Our people are at the centre of what we do and we will continue to invest in their development and reward their achievement of sustainable business outcomes that add value for all our stakeholders.

I hope you find this report informative and we look forward to receiving your support for the resolution approving this report at the 2019 AGM.

Penny Bingham-HallChair – People and Remuneration Committee

The report has been prepared and audited in accordance with section 308(3C) of the Corporations Act 2001.

Board focus
The main objective of the Board People and Remuneration Committee (PRC) is to assist the Board in fulfilling its responsibilities by developing the remuneration strategy, framework and policies for Non-Executive Directors, Executive KMP and the Group Management Committee (GMC), for Board approval. In FY19, the PRC were involved in:
  • Considering how the talent management strategy supports business and cultural goals

  • Reviewing the risk culture framework, metrics and assessment approach

  • Monitoring employee engagement and corporate culture metrics

  • Approving performance objectives and Key Performance Indicators for the CEO, KMP and other executives

  • Undertaking a review of CEO and KMP remuneration, including assessment of benchmarks and market trends

  • Reviewing executive and key talent assessments for succession planning and talent management

  • Monitoring programs to increase security ownership for staff and key talent

  • Introducing a security salary sacrifice program for NEDs to increase equity ownership

  • Reviewing performance against business objectives and strategic goals

  • Enhancing disclosures to address investor feedback

  • Assessing performance on inclusion and diversity strategy and progress towards gender diversity target

  • Reviewing new ASX Corporate Governance guidelines to assess alignment

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