Appointment and Renewal Policy

Transcription

1 Appointment and Renewal Policy Final incorporating changes requested by the Board on 27 March 2017 Version 12 Approval State Final approved by the Board 27 March 2017 effective 1/7/17 upon SFT of RTSSF into Equipsuper Replaces Version Version 11 updated 27 March 2017 Author/s Stephen Roseman, Head of Legal This document is current as at 27 March 2017 This document must not be copied, distributed, or re-issued in another form, without consent of Equipsuper Pty Ltd ABN

2 Table of Contents Part A: Introductory Provisions Introduction... 5 Part B: Fit and Proper Application of the Policy in relation to Fit and Proper issues The Policy s Objectives in relation to Fit and Proper issues Determining Fitness and Propriety Criteria for determining fitness and propriety Appointment of Responsible Persons Appointment of Directors Potential candidates for Director positions Eligibility criteria for Directors General eligibility criteria Minimum skills criteria Additional eligibility criteria for independent directors Initial fitness assessment for Directors Appointment of Executive Officers Appointment of External Responsible Persons Fitness Assessments Requirements for new Directors following appointment Annual Fitness Assessments Individual skills requirements Collective Skills Requirements Undertaking Fitness Assessments Induction and Ongoing Training for Responsible Persons Induction and ongoing training for Directors Induction and Ongoing Training for Executive Officers and External Consultants Training for External Responsible Persons Procedures for Compliance P a g e

3 9 Propriety Background Determining Propriety Conflicts of Interest Propriety Checks for new Responsible Persons Ongoing Propriety Checks Removal of Responsible Persons Removal of Responsible Persons Part C: Board renewal and assessment The Purpose of this Policy in relation to Board renewal and assessment Policy in Relation to Board Structure Overall Policy Statement Appropriate skills and experience General standards of skills and experience Minimum standards of education, qualification and experience Relevant Skills and Attributes of the Independent Director Diversity Renewal General principles for renewal Special circumstances where maximum tenure may be exceeded Staggering of Directors terms of office Principles in relation to assessment of Board, Committee and Director Performance Framework for assessing Board, Committee and Director Performance Board assessment processes Assessment processes for Board Committees Assessment processes for individual Directors Managing Board and Director Performance Satisfying Fit and Proper assessments Part D: Election Rules Introduction Definitions and Interpretation P a g e

4 16.1 Definitions and Interpretation Appointment of Election Officials Number of Directors to be Elected or Nominated and Term of Office Eligibility Eligibility criteria for Employer Directors Eligibility criteria for Member Directors Skills Requirements Information Kits Nominations Prospective Director Forms Determination of Eligibility Candidate Statement Probity Checks Accepted Candidates Candidate Statements Withdrawal of a Candidate Uncontested Elections Contested Elections No Eligible Candidates for a director position with Position-Specific Skills Roll of Voters/Nominators Voting Reduction in the Number of Candidates Counting of Votes Ascertaining the Result Recounts Appeals to the Chair Electioneering Material Declaration of Election Result Declaration of Appointment Amendment to Rules Part E: General P a g e

5 44 Whistleblowing Review of this Policy Part F: Glossary P a g e

6 Part A: Introductory Provisions 1 Introduction a) Equipsuper Pty Ltd (Trustee or the Company) is the corporate trustee of the Equipsuper Superannuation Fund (Fund). The purpose of the Fund is to provide superannuation benefits to Fund members and beneficiaries on the retirement, death, cessation of employment or disablement of members, or in other circumstances as permitted by the governing rules of the Fund or by law. Where appropriate in this policy, the Trustee, the Fund or any other related body corporate are referred to generically as Equip. b) The Board of Directors of the Trustee (collectively Directors or the Board), is structured to comply with the Superannuation Industry (Supervision) Act 1993 (SIS Act). At the date of approval of this Policy, the Board has nine directors comprising the independent chairperson, two other independent directors appointed by the other directors, three Employer Directors and three Member Directors. c) The Trustee is licensed by the Australian Prudential Regulation Authority (APRA) and holds an Australian Financial Services Licence (AFSL). d) Equipsuper Financial Holdings Pty Ltd (EFHPL) is the holding company of the Trustee. e) The composition of the Board of each of EFHPL and the Trustee is required by its Constitution to be consistent with the requirements of the SIS Act which apply to the trustee of a standard employer-sponsored superannuation fund. Further, the Constitution of the Trustee requires that the Board of the Trustee shall constitute the same persons who are members of the Board of EFHPL. f) This Appointment and Renewal Policy (Policy) has been approved by the Board in order to: i) set out its policies in relation to the meeting of fit and proper standards by directors and other Responsible Persons, board renewal and board assessment and the running of Employer Director nominations and elections and the nomination of Member Directors; and meet its obligations under the APRA Prudential Standard SPS 520 Fit and Proper (SPS 520)( Fit and Proper Standard) and the guidance for compliance with the Fit and Proper Standard provided in Prudential Practice Guide SPG 520 Fit and Proper and under APRA Prudential Standard SPS Governance (SPS 510) (Governance Standard) and the guidance for compliance with the Governance Standard provided in Prudential Practice Guide SPG Governance. 5 P a g e

7 g) The purpose of this Policy is to: i) ensure that the Trustee manages prudently the risks that persons acting in responsible person positions who are not fit and proper pose to the interests, or reasonable expectations, of beneficiaries, the financial position of the Trustee, the Fund, or any other relevant prudential matter. For the avoidance of doubt, this Policy is not intended to discourage or otherwise act as a barrier that would prevent those who wish to do so, from offering themselves for appointment or nominating as a director of the Trustee. The Policy does, however, set out the minimum standards of education, qualification and experience that the Board requires all Directors of the Trustee to meet; i iv) outline the approach to be taken by the Company in ensuring that there is appropriate renewal of the Board, while recognising the benefits of continuity and the principles inherent in the equal representation model prescribed by the SIS Act; provide a framework for the regular assessment of the performance of the Board as a whole, Board Committees and the Directors individually; and set out the rules that will apply to the nomination and election of Directors by Employers and the nomination and appointment of Directors by Members. h) This Policy should be read in conjunction with other relevant governance policies adopted by the Board of the Trustee or any related body corporate which apply to the Trustee and with relevant legislative requirements affecting Directors, including the SIS Act and the Corporations Act 2001 and the APRA Prudential Standards, including the Fit and Proper Standard and the Governance Standard. 6 P a g e

8 Part B: Fit and Proper 2 Application of the Policy in relation to Fit and Proper issues a) Under the SIS Act the Responsible Persons of a body corporate must comply with the Fit and Proper Standard. A Responsible Person in the SIS Act context includes a director (including alternate or acting director), company secretary or executive officer. An executive officer means a person of whatever title and whether a director or not, who is concerned or takes part in the management of a body corporate. The roles within Equip which have been identified as "executive officers" are set out in section2b). b) This Policy applies to the following: i) The Directors; Equip's Executive Officers; being: A) The Chief Executive Officer (CEO); B) The Executive Officer, Investment Strategy(EOIS); C) The Executive Officer Risk (EOR); D) The Executive Officer, Member Relationships (EOMR); E) The Company Secretary (CS); F) The Executive Officer, Liability Management (EOLM); and i Any other person who is a Responsible Person within the definition of that term in SPS 520, including the Fund Auditor and the Fund Actuary. c) Throughout this Policy the following terms have the following meanings: i) Responsible Persons refers to all of the persons listed in section 2.2; i Internal Responsible Persons means the collective group of the Directors, CEO, EOIS, EOR, EOMR,, CS and any other employee of the Trustee who is a "Responsible Person" within the definition of that term in SPS 520; External Responsible Persons means the Fund Auditor and the Fund Actuary. d) It is noted that external consultants may be appointed from time to time to undertake specific tasks or advisory functions, including being appointed as members of Board Committees. If at any time such consultants are appointed to be members of Board Committees, the Board may, at the time of the appointment, determine that a particular consultant is to be included in the group of Internal Responsible Persons, having regard to the skills of the particular consultant, the role they will perform, and the reason for their appointment. 7 P a g e

9 3 The Policy s Objectives in relation to Fit and Proper issues a) The objectives of this Policy in relation to fit and proper issues are to document, among other things the: i) Trustee s processes for ensuring compliance with the Fit and Proper Standard; i iv) Appointment processes for Responsible Persons; Eligibility criteria for persons to become a director of EFHPL and therefore of the Trustee; Processes to be followed for assessing the fitness and the propriety of Responsible Persons, both prior to appointment and on an ongoing basis; v) Induction and continuous development training programs for Responsible Persons; vi) v Ongoing monitoring of Responsible Persons, including monitoring declarations of a conflict of interest or duty, to ensure that the requirements of the Standard are being met; and Steps that may be taken by the Trustee if a Responsible Person is required to be removed from his or her position. 8 P a g e

10 4 Determining Fitness and Propriety 4.1 Criteria for determining fitness and propriety a) The criteria to be used to determine whether a person is fit and proper to hold a Responsible Person position are whether: i) it would be prudent for the Trustee to conclude that the person possesses the competence, character, diligence, experience, honesty, integrity and judgement to perform properly the duties of the responsible person position; i iv) it would be prudent for the Trustee to conclude that the person possesses the education or technical qualifications, knowledge and skills relevant to the duties and responsibilities of an RSE licensee; the person is not disqualified under the SIS Act or other relevant law from holding the position; and the person either: A) has no conflict in performing the duties of a responsible person position; or B) if the person has a conflict, it would be prudent for the Trustee to conclude that the conflict will not create a material risk that the person will fail to perform properly the duties of the position. b) In determining the fitness and propriety of each Responsible Person, the Trustee will consider: i) the Responsible Person s role. A written statement must be prepared defining the role and competencies required of each person who is a Responsible Person of the Trustee; and a range of factors as set out in this policy which demonstrate the person s character, competence and experience relative to the duties which they will be required to undertake as a Responsible Person. c) In assessing "fitness" under this Policy, the following terms are used to assess a Responsible Person's level of knowledge, skill or understanding: i) Introductory level: the person has little or no knowledge of the relevant topic. i Indirect Experience: the person has a limited understanding of the relevant matter, but little or no working knowledge or actual experience of it. Basic understanding: the person has a basic or general understanding of the relevant matter, but little, or no, working knowledge or actual experience in relation to it 9 P a g e

11 iv) Working knowledge: the person has direct exposure to both theoretical and practical knowledge of the matter, including having up to 5 years' relevant experience (whether gained through working at Equip, in the superannuation or financial services industries or in other relevant roles); or v) Expert working knowledge: the person has direct exposure to both theoretical and practical knowledge of the matter, including having 5 or more years' relevant experience (whether gained through working at Equip, in the superannuation or financial services industries or in other relevant roles). d) In considering fitness, the Trustee considers both the individual skills, knowledge and experience of each Responsible Person individually, and the collective skills, knowledge and experience of all Responsible Persons collectively. e) The Trustee will retain sufficient documentation of each fit and proper assessment undertaken to demonstrate the fitness and propriety of the Trustee s Responsible Persons. 10 P a g e

12 5 Appointment of Responsible Persons 5.1 Appointment of Directors Potential candidates for Director positions Directors are appointed as required or permitted by the Constitution of EFHPL and the Trustee's Constitution and in accordance with the SIS Act and the Corporations Act Potential candidates for appointment as a director will be provided with an information kit containing appropriate information to ensure that the potential director has a reasonable basis to understand, and assess their ability to fulfil, the role of a director. For example this may include: a) A statement outlining the specific education, qualifications, experience, skills or competencies relevant to the particular director appointment; b) A summary of the duties and responsibilities of a trustee director as encapsulated in the SIS Act and at general law; c) A copy of this Policy and other relevant governance policies; d) A summary of the training obligations applicable to newly appointed directors and the ongoing training obligations applicable to all Directors; and e) An outline of the operation of the Board, including the conduct of Board meetings Eligibility criteria for Directors All potential candidates for appointment as directors, including independent directors, must, unless the Board determines otherwise, prior to appointment: a) Comply with: i) the general eligibility criteria and the minimum skills requirements specified in this Policy; i any requirements to become a director of a company that is the trustee of a regulated superannuation fund, which apply by law or any regulatory requirement; and any other requirements which may be determined by the Board from time to time, either generally or in any particular case; and b) Satisfactorily complete an initial fitness assessment and propriety assessment undertaken in accordance with this Policy. 11 P a g e

13 5.1.3 General eligibility criteria The following general eligibility criteria apply to all persons seeking to be appointed as a director of the Trustee, including independent directors. These criteria must be satisfied prior to the person taking office as a director. A person who fails to meet each of these criteria is not eligible to become, and shall not be appointed as, a director of the Trustee. It is the responsibility of each person seeking office as a director to ensure that he or she satisfies the relevant criteria, and the Trustee shall not be responsible for any costs incurred in doing so. The general eligibility criteria are: a) The person must meet all minimum requirements imposed by law, the Fit and Proper Standard, the Governance Standard, the Trustee s RSE licence or other relevant regulatory requirement, the Constitution of EFHPL and of the Trustee and any rules determined by the Board in relation to the relevant appointment process; b) The person must hold no other role or position which would, or might reasonably be expected to, create a conflict or perceived or potential conflict, with the person s role as a director (if appointed) or otherwise affect the person s ability to exercise independent judgement as a director of the Trustee (other than being a member of the Fund or an employee or nominee of an Employer who contributes to the Fund). Without limitation, this includes the person not: i) being a trustee of, or a director or employee of the trustee of, any other superannuation fund, other than a self-managed superannuation fund or a superannuation fund that the Board determines is not, and cannot reasonably be expected to become, in substantive competition with a Fund; or i having been, within the three years immediately prior to the date of the proposed appointment, an employee of, engaged as a consultant to, or be a director or employee of a consultant to, the Trustee or any related body corporate of the Trustee; or having been, within the three years immediately prior to the date of the proposed appointment, a director or employee of any party engaged by the Trustee to perform a material outsourced activity as that term is used in the Trustee s Outsourcing Policy; Minimum skills criteria Unless the Board determines otherwise, each person who seeks to become a director, including an independent director, must satisfy at least one of the following criteria in relation to education, qualifications or experience at the time at which he or she offers him or herself for appointment as a director: 12 P a g e

14 a) The person has completed satisfactorily one or more relevant courses offered by the Australian Institute of Superannuation Trustees (AIST) in relation to Trustee governance and the role and duties of directors of superannuation fund trustees (AIST training courses), the relevant Australian Institute of Company Directors training courses in relation to company law and the general duties and obligations of directors (AICD training courses), or such other courses which are accepted by the Board to be at least equivalent in content and standard to the AIST training courses or the AICD training courses; or b) The person has relevant education, being a minimum of graduate degree qualifications in a relevant discipline, such as commerce, finance, law or business studies; or c) The person has relevant professional or business experience, which may be evidenced by: i) not less than five years experience as a director of public companies or substantial relevant private or not for profit organisations (for example, an organisation with annual turnover in excess of $5 million); or not less than five years senior management experience in financial services, or in a relevant discipline, such as accounting, legal, investment or actuarial services, or in a relevant business area within a broader commercial organisation or within organisations similar to those which are participating employers in the Fund Additional eligibility criteria for independent directors Each person who offers themselves for appointment as an independent director must satisfy all relevant requirements in the SIS Act or that are otherwise prescribed or permitted by APRA for an independent director of a company that is the trustee of a regulated superannuation fund Initial fitness assessment for Directors A person will meet the initial fitness assessment for directors, if they demonstrate that they have: a) At least a working knowledge of directors duties as set out in the Corporations Act 2001; and b) An expert knowledge in at least one of the following skills areas: i) Risk management; i iv) Investments; Superannuation operations, administration or management; Accounting / audit; 13 P a g e

15 v) Financial services or insurance industry services; vi) v Applicable laws (Corporations Act 2001, SIS Act, trust law); or Any other specialist area that may be designated by the Board, either generally or in relation to a particular director position. The initial fitness assessment must, unless the Board determines otherwise, be satisfactorily completed by a prospective director prior to appointment. However, the Board may, if it considers it appropriate having regard to all of the circumstances of a particular case, determine that a person who satisfies the general eligibility criteria and the minimum skills criteria may be appointed as a director for an initial term of 90 days, pending satisfactory completion of the initial fitness assessment. Where this occurs: c) Upon satisfactory completion of the initial fitness assessment, the Director s term of office may be extended as determined by the Board, having regard to this Policy; and d) If the initial fitness assessment is not satisfactorily completed within the initial 90 day term, the director may not continue in office as a director beyond their initial 90 day term unless the Board, after due consideration, determines that, notwithstanding the failure to meet the initial fitness assessment, the director has the necessary skills and experience to fulfil their role as a director satisfactorily, and is in all respects an appropriate person to be a director of the Trustee. 5.2 Appointment of Executive Officers a) In considering the appointment of a CEO, the Board will, generally, appoint the Governance and Rewards Committee, or other committee of the Board, to oversee and manage the recruitment and appointment process on behalf of the Board and make recommendations to the Board regarding a candidate or candidates for appointment. Generally, an external recruitment agency will be appointed to assist in the identification and consideration of appropriate candidates for the role of CEO. The preferred candidate or candidates will be required to complete an assessment to ensure that they meet the standards of fitness and propriety prescribed in this Policy satisfactorily prior to being appointed as CEO. b) The Executive Officers, other than the CEO and persons appointed to the role of secretary of the Trustee (as that term is used in the Corporations Act 2001), will be appointed by the CEO. A list of preferred candidates shall be prepared after having regard to the competencies, skills and knowledge specified for the roles. c) Persons appointed to the role of secretary of the Trustee (as that term is used in the Corporations Act 2001) (Company Secretary) will be appointed by the Board on the recommendation of the CEO, having regard to the competencies, skills and knowledge specified for the role. d) An assessment must be undertaken to ensure that a person proposed to be appointed as an Executive Officer meets the following standards of fitness and propriety satisfactorily prior to being appointed to the relevant role: 14 P a g e

16 i) Fitness assessment: The person must have at least a: A) Working knowledge of all aspects of the role to which they are proposed to be appointed; and B) Basic understanding of the following: risk management; relevant accounting, auditing and operational processes; relevant legal requirements, including a relevant understanding of the SIS Act, trust law and the Corporations Act 2001; investments; and financial services industry; and Proper assessment: satisfactory results must be received for each of the propriety checks undertaken in relation to the person in accordance with section 9. e) At the discretion of the Board, a person may be appointed to a Responsible Person position prior to completion of the fitness assessment under clause5.2d), if the Board considers it appropriate having regard to all of the circumstances of a particular case, conditional upon the fitness assessment being completed satisfactorily within 90 days of the date of appointment. Where this occurs, if the fitness assessment is not satisfactorily completed within that 90 day period, the person may not, unless the Board determines otherwise, continue to be engaged in a Responsible Person position. In making a determination for this purpose, the Board may consider such factors as the Board reasonably considers appropriate, including: the nature of and any specific requirements for the relevant Responsible Person Role; the background, training, skills education and previous work experience of the relevant person; and the reasons why, or areas of knowledge in relation to which, the person did not complete the initial fitness assessment satisfactorily. 5.3 Appointment of External Responsible Persons a) Each External Responsible Person will be appointed by the Board, having regard to the nature of the relevant Responsible Person role and the background, technical skills, experience and qualifications of the proposed appointee. No person may be appointed as an External Responsible Person unless: i) They have provided evidence to the Board's satisfaction that they: A) have the technical and professional qualification and experience to perform all aspects of the role to an appropriate standard; and B) meet the requirements of the Standard in relation to the Responsible Person role for which they are proposed; and satisfactory results have been received for each of the propriety checks undertaken in relation to the person in accordance with section P a g e

17 6 Fitness Assessments 6.1 Requirements for new Directors following appointment Following the completion of the initial fitness assessment and appointment of a new director under section 5.1.6: a) To formally re-enforce their commitment, newly appointed (and reappointed) directors must confirm in writing at the time of their appointments that they understand the Fund s values, are comfortable with them and see no conflicts with them; b) A development plan will be prepared for each new director as soon as reasonably practicable following their initial appointment, having regard to their specific skills, experience, the results of their initial fitness assessment and the requirements of the Trustee s Annual Fitness Assessment; and c) Within six months of the date of appointment, each new director shall, unless the Board determines otherwise, undertake a further fitness assessment, in which the director is required to demonstrate that they have at least a basic understanding of each of the following areas of knowledge: risk management; relevant accounting, auditing and operational processes; relevant legal requirements, including a relevant understanding of the SIS Act, trust law and the Corporations Act 2001; investments; and financial services industry. 6.2 Annual Fitness Assessments An annual fitness assessment shall be undertaken in relation to all Responsible Persons at least once in every 12 month period. This assessment will consider both the individual skills of each Responsible Person, having regard to their role in relation to the Trustee, and the collective skills of all of the Responsible Persons together Individual skills requirements For the purposes of the annual fitness assessment, each Responsible Person must satisfactorily demonstrate that they have the following minimum skills: a) A working knowledge of and ability to effectively implement the duties and obligations of the Trustee of a regulated superannuation fund, and of the directors of a corporate trustee of such a fund as prescribed in the SIS Act; b) A basic understanding of relevant legal requirements, including the SIS Act, SIS Regulations, Prudential Standards and other relevant prudential requirements, trust law, Corporations Act 2001 and other legal requirements; c) A basic understanding of relevant accounting, auditing and operational processes; d) A basic understanding of investments, including investment classes, markets and investment fund manager practices; 16 P a g e

18 e) Awareness of areas where additional technical, professional or expert advice could be sought; f) A working knowledge of the diligence and soundness of judgement required to undertake and fulfil the duties and responsibilities of their respective roles; and g) A working knowledge of the requirement to exercise independent judgement in relation to matters affecting the Trustee and the Fund Collective Skills Requirements a) For the purposes of the annual fitness assessment, the Responsible Persons must collectively possess the following minimum level of skills and experience: i) A total of at least half of the Responsible Persons will have a basic understanding of financial services industry issues; i iv) A total of at least half of the Responsible Persons will possess a working knowledge of risk management and compliance frameworks; A total of at least three Responsible Persons will possess a working knowledge, and an additional two Responsible Persons will possess a basic understanding, of the operation of the Fund including the products offered through the Fund, the profile of Fund members and employers and knowledge of the key service providers; A total of at least four Responsible Persons will possess at least a basic understanding of unit pricing practices; v) A total of at least three Responsible Persons will possess a basic understanding of risk insurance and group life insurance; and vi) All directors other than the independent directors will possess at least a basic understanding of at least one of the industry sectors within which employers and members of the Fund participate. 6.3 Undertaking Fitness Assessments a) Each fitness assessment undertaken under this Policy will, unless determined otherwise by the Board, be conducted by a person independent of the Board and Management of the Trustee, who has experience and skills in relevant areas, including in the review of director and Board performance (the Assessor). A fitness assessment may be undertaken through the completion of written questions determined by the Assessor or by discussions conducted by the Assessor with Responsible Persons individually or in one or more groups. The questions asked by the Assessor must include questions directed to the requirements of the initial fitness assessments and the annual fitness assessments as set out in this Policy, and may also include such other matters as are determined by the Board, or are recommended by the Assessor in order to enable a thorough and appropriate assessment of the skills and knowledge of each Responsible Person to be made. 17 P a g e

19 b) Where any Annual Fitness Assessment indicates that there is a gap in the skills and knowledge of any Responsible Person individually, or of the Responsible Persons collectively, the Board will consider the appropriate steps to be taken to ensure that each Responsible Person individually, and the group of Responsible Persons a whole, have the skills, knowledge and experience as set out in this Policy, including: i) Unless the Board exercises its discretion under paragraph ( to permit a Responsible Person who did not meet the individual skills requirements set out in section to remain as a Responsible Person, the Responsible Person must cease to hold a Responsible Person position. Where the relevant person is a director, they must resign their position; i The Board may, after considering all of a relevant Responsible Person s skills and experience, and all of the circumstances relating to their failure to meet the individual skills requirements of the relevant assessment, determine that, notwithstanding that failure, it is appropriate for the Responsible Person to be permitted to remain as a Responsible Person, subject to any conditions that may be determined by the Board, including conditions requiring the person to complete further training or education to the Board s satisfaction; and The Board may take any other steps it considers reasonably necessary or appropriate to address any such gaps, including, without limitation: A) Providing for the collective skills and knowledge of the group of Responsible Persons as a whole to be augmented by the appointment of additional Responsible Persons having appropriate skills and knowledge in the relevant areas; or B) Providing for the skills and knowledge of individual Responsible Persons, or of the group of Responsible Persons as a whole, to be augmented through additional education or training and/or through the use of appropriate skilled professionals, such as legal, accounting, investment or actuarial professionals, to provide advice to the Trustee. c) Further information relating to the procedures to be followed where a Responsible Person is unable to continue in, or is removed from, a Responsible Person role is provided in section P a g e

20 7 Induction and Ongoing Training for Responsible Persons 7.1 Induction and ongoing training for Directors All new Directors are required to complete an induction program in addition to any specific training requirements identified under section 6.1, including the following: a) An internal briefing conducted by the CEO, the Company Secretary, existing directors and senior managers covering areas such as the operation of the Fund, the Trustee s policies and procedures, including corporate governance and risk management policies, and the responsibilities and duties of directors of a superannuation fund trustee; b) An Information Package of key corporate and Fund documents, for example, including: i) The Trust Deed for the Fund; i iv) The Constitution of the Trustee and its related bodies corporate; Board governance documents and policies, including Board and Committee Charters, Board Procedural Rules, Corporate Governance Statement, Code of Conduct, this Policy and the Conflicts Management Framework; Delegations of authority; and v) Copies of Equip's Risk Management Framework, Investment Governance Framework and Insurance Management Framework. c) Ongoing training is provided to directors through a variety of means including: i) Training sessions designed specifically for the directors. The topics for these sessions generally focus on areas where a skills gap or weakness has been identified and/or Directors feel it would be beneficial to receive further training; i iv) Attendance at in-house training sessions arranged by Management; Attendance at seminars conducted by relevant industry groups such as ASFA and AIST; Training provided through their employment and/or professional accreditation requirements; and v) Subscriptions to relevant industry publications, such as SuperFunds Magazine. d) The Trustee expects that directors will maintain relevant skills and knowledge by undertaking a minimum of at least 30 hours of training or self-education per year having regard to the minimum skills requirements set out in section P a g e

21 e) The Company Secretary is responsible for monitoring the training undertaken by directors. All directors who complete training courses, including AIST, ASFA or AICD courses at the request of the Company, and in order to meet the requirements of this Policy, will be required to forward evidence of their attendance and, where relevant, satisfactory completion of the course, to the Company Secretary. Each quarter directors are required to complete a training register outlining the ongoing training they have undertaken. The completed training registers are reviewed by the Company Secretary and, where considered appropriate by the Company Secretary, discussed with the CEO and the Chairman. 7.2 Induction and Ongoing Training for Executive Officers and External Consultants a) Upon appointment, all Executive Officers will receive induction training managed by the Human Resources function, which will include training in relation to the Trustee s corporate governance and risk management policies and procedures and relevant information contained in the Human Resource Manual. b) In addition to the induction program all Executive Officers will have access to soft copies of key corporate and Fund documents including for example: i) The Trust Deed for the Fund; i iv) The Constitution of the Trustee and its related bodies corporate; Copies of the Trustee s regulatory licences and, as applicable, licences for its related bodies corporate; Board governance documents and policies; v) Delegations of authority; and vi) The Risk Management Framework, Investment Governance Framework and Insurance Management Framework. c) Ongoing training for Executive Officers will be provided through various means including: i) Attendances at seminars and training courses conducted by relevant industry groups such as ASFA and AIST; i iv) In-house training sessions; Reading and self-assessment via Kaplan or an equivalent organisation; Training courses to maintain any professional accreditation; and v) Availability of relevant reading material via subscriptions to business and superannuation journals and magazines; d) The Manager, Risk and Compliance will monitor the training undertaken by the Executive Officers. Any skills gaps or non-compliance with the training requirements will be discussed with the CEO. 20 P a g e

22 e) Executive Officers are required to satisfy the minimum training requirements set out in the Trustee s Learning and Development Policy. f) Upon appointment External Consultants who are Responsible Persons (if any) will receive induction training arranged through the Company Secretariat similar to that provided to Executive Officers, but tailored to the role and requirements of the External Consultant. g) As a minimum the Trustee expects any External Consultants who are appointed to Board Committees to complete at least 30 hours ongoing training per year through the same means as directors. h) The Company Secretary is responsible for monitoring the training undertaken by the External Consultants where it is required and each quarter the External Consultants (if any) are required to complete and return to the Company Secretary a training register outlining the training they have undertaken. The completed training registers are reviewed by the Company Secretary and, where considered appropriate by the Company Secretary, discussed with the CEO and the Chairman. 7.3 Training for External Responsible Persons Each External Responsible Person is required to undertake at least the minimum ongoing training or professional development which is required to enable them to maintain relevant professional qualifications, accreditation or licenses. The Company Secretary is responsible for obtaining evidence that each External Responsible Person satisfies these requirements on at least an annual basis. 8 Procedures for Compliance To ensure the Trustee continues to apply the fitness requirements set out in this Policy the Trustee has developed the following compliance measures: a) The criteria for initial and annual fitness assessment will be reviewed on an annual basis to ensure they continue to reflect the skills and knowledge required to conduct the operations and to understand the risks of the Fund and the Trustee; b) An assessment of all Responsible Persons skills and knowledge must be completed at least annually as required by section 6.2; c) The Company Secretary is responsible for ensuring that all assessments are undertaken at the required times, and that all issues arising from any assessment are brought to the attention of the Chairman or, if the issue relates to the Chairman, to the Chairmen of the Investment Committee and the Audit, Risk and Compliance Committee; 21 P a g e

23 d) It is the overall responsibility of the Chairman of the Board, after considering the advice of the Assessor, the Company Secretary, the CEO or any other advice the Chairman considers appropriate, to ensure that any issues identified in any assessment are addressed effectively and as soon as is reasonably practicable, so as to ensure that any such issue does not adversely affect the ability of the Trustee to manage the Fund, the Trustee s business and the risks relevant to them, appropriately; e) The Company Secretary is responsible for ensuring that appropriate procedures are in place to ensure that induction and training is undertaken as required by this Policy; and f) The Company Secretary is responsible for ensuring that the requirements to be met in initial and annual fitness assessments are reviewed at least annually, and on an adhoc basis in response to relevant triggers such as: i) Resignation/removal of a Responsible Person; i iv) Significant change to the nature and/or complexity of the Trustee s operations; Significant change in the nature or assessed severity of material risks affecting the Fund or the Trustee s business generally; and Significant regulatory change, including changes to the SIS Act, the Corporations Act 2001, the Fit and Proper Standard or the Governance Standard or other regulatory requirements. 9 Propriety 9.1 Background a) The propriety limb under the Fit and Proper Standard must be satisfied by each Responsible Person: i) Prior to appointment as a Responsible Person; and On an ongoing basis throughout the period during which a person holds a responsible person position. b) A Responsible Person is appointed by the Trustee on the basis of satisfactorily completing the minimum standards for propriety set out under this Policy. In particular, no Responsible Person will be appointed or, in the case of a director, may offer themselves for appointment or nomination, where he/she is a: i) disqualified person under the SIS Act or other APRA or ASIC administered legislation; or person prohibited from being a director of a corporation under the Corporations Act 2001 or similar overseas legislation. 22 P a g e

24 c) If the Trustee becomes aware that a Responsible Person has become a disqualified person the Trustee will take immediate action to remove that person from that role in accordance with section Determining Propriety a) In reaching a decision with respect to the propriety of an individual prior to or following appointment as a Responsible Person, the Trustee will consider whether the individual: i) has demonstrated a lack of willingness to comply with legal obligations, regulatory requirements or professional standards, or been obstructive, misleading or untruthful in dealing with a regulatory body or a court; i iv) has breached a fiduciary duty; has participated in negligent, deceitful, or otherwise discreditable business or professional practices; has been reprimanded, or disqualified, or removed, by a professional or regulatory body in relation to matters relating to the person s honesty, integrity or business conduct; v) has seriously or persistently failed to manage personal debts or financial affairs satisfactorily in circumstances where such failure caused loss to others; or vi) has been substantially involved in the management of a business or company which has failed, where that failure has been occasioned in part by deficiencies in that management. b) In the event that the Trustee becomes aware that a Responsible Person may not satisfy the propriety requirements set out under this Policy the matter will be discussed by the Board. If a Responsible Person is a disqualified person the Trustee must take immediate action to remove the person from the role in accordance with section 10. In all other cases, if after careful consideration of all of the relevant circumstances, the Board determines the individual concerned does not satisfy the propriety requirements the Responsible Person must resign, or will otherwise be removed from, their role, unless they can show cause to the Board as to why they should be permitted to remain in that role. Where a Responsible Person is removed from their role, the provisions of section 10 will apply. 9.3 Conflicts of Interest a) Each Responsible Person is required to identify and appropriately manage actual and potential conflicts of interest between their duties to members and beneficiaries of the Fund and other interests. The Trustee's framework for identifying and managing conflicts of interests is set out in the Conflicts Management Framework. b) There is also a standing item on the agenda of each Board and Committee meeting which requires the directors and Committee Members to declare whether they have 23 P a g e

25 any conflicts of interest or are disqualified from acting as a Director or Committee Member. Any declarations which are made at this time will be noted in the minutes of the meeting and the relevant conflict will be managed in accordance with the Conflicts Management Framework. c) External Responsible Persons are required to provide evidence on at least an annual basis of their independence, and that they do not have any conflicts of interest or duty which would affect their ability to fulfil the role to which they have been appointed. 9.4 Propriety Checks for new Responsible Persons a) The appointment of a Responsible Person is subject to the following processes and procedures: i) A criminal history check in the APRA prescribed form will be obtained; i iv) A National Bankruptcy Search will be conducted; A statutory declaration that the person has not been convicted of an offence against or arising out of a law of a foreign country, being an offence in respect of dishonest conduct; A search of the APRA and ASIC disqualified persons database; and v) Any other searches or inquiries reasonably necessary to satisfy the Trustee that a Responsible Person meets the propriety requirements for a Responsible Person, including any additional searches or inquiries reasonably necessary to clarify or provide any further information regarding any matter or suspected or likely matter disclosed through any other searches. b) Prior to being appointed each new director is required to complete and execute a Consent to Appointment as a Director, notice pursuant to the Corporations Act 2001 and notification of interests documents. 9.5 Ongoing Propriety Checks a) The following processes will be followed to ensure all Responsible Persons continue to satisfy the propriety requirements of this Policy on an ongoing basis: i) The propriety requirements will be reviewed on an annual basis to determine if there are any new circumstances which should be included in determining propriety; Any Responsible Person who: A) becomes a disqualified person under the SIS Act; B) is prohibited from being a director of a corporation under the Corporations Act 2001 (or similar overseas legislation); or C) is convicted of an offence of fraud or dishonesty, 24 P a g e

26 is required to notify the Chairman (if a director or the CEO) or the CEO (if an External Consultant or Executive Officer other than the CEO); i The propriety checks described in section 9.1a)are to be completed in relation to each Responsible Person: A) annually, or at such other frequencies as may be determined by the Board; and B) where the Responsible Person is a director, an External Consultant on any Board Committee, or an External Responsible Person, on the person being re-appointed or offering themselves for appointment or nomination as a director; and C) where the Responsible Person is an Executive Officer, prior to any change of role, significant change in responsibilities or renewal or extension of the term of appointment. 25 P a g e

27 10 Removal of Responsible Persons 10.1 Removal of Responsible Persons a) If: i) The Trustee becomes aware that a Responsible Person is a disqualified person; i In the opinion of the Board determined under section 9.2, the person does not satisfy applicable propriety criteria or should otherwise be removed from his or her position; or A Responsible Person ceases to satisfy relevant fitness criteria and the Board does not determine that it is appropriate for the person to continue in a Responsible Person position, then the Responsible Person must be removed from that position, and the Trustee will notify APRA of that fact within the prescribed time frame. b) If a Responsible Person ceases to satisfy relevant fitness criteria and the Board determines that, notwithstanding that the person does not satisfy those criteria, it is appropriate for the person to continue in a Responsible Person position, then the Trustee will notify APRA of that fact as required by the Fit and Proper Standard. c) Any process for the removal of a Director will: i) Be in accordance with the Constitution of EFHPL and of the Trustee and the Corporations Act 2001; i Comply with the requirements under the SIS Act and the Corporations Act 2001; and Be consistent with any individual arrangements made with the Director. d) Where a Director is removed from their position as a result of and in accordance with this Policy, the vacancy on the Board thereby created may be filled as a casual vacancy under the Constitution of EFHPL and of the Trustee. e) The removal of an Executive Officer or External Consultant will be governed by the individual s employment contract or letter of offer. f) The Trustee and each affected Director may seek independent legal advice regarding any proposed removal process of a Director at the Trustee s expense, if required. 26 P a g e