CORPORATE GOVERNANCE STATEMENT Introducton The GPT Group (GPT or the Group) comprses GPT Management Holdngs Lmted (ACN 113 510 188) (GPTMHL) and General Property Trust (Trust). GPT RE Lmted (ACN 107 426 504) (GPTRE) AFSL (286511) s the Responsble Entty of the Trust. GPT s stapled securtes are lsted on the Australan Securtes Exchange (ASX). The ASX Corporate Governance Councl s Corporate Governance Prncples and Recommendatons 3rd Edton (Prncples), provde a framework for good corporate governance. GPT has compled wth the Prncples for the 2017 year and lodged an Appendx 4G (Key to Dsclosure Corporate Governance Prncples and Recommendatons) wth the ASX. GPT regards good corporate governance as a fundamental component of GPT s commtment to Securtyholders. GPT s Board strves to ensure that GPT meets hgh standards of governance across ts operatons. Informaton on GPT s governance practces together wth copes of relevant polces such as Board and Commttee Charters, Code of Conduct, Contnuous Dsclosure Polcy, Whstleblower Polcy and Personal Dealng Polcy can also be found n the Corporate Governance secton of GPT s webste (www.gpt.com.au). As a result of the staplng of the unts n the Trust and the shares n GPTMHL, both enttes operate as a coordnated group. For example, the enttes must, to the extent possble, ensure the Boards of GPTRE and GPTMHL have the same composton and that meetngs are held concurrently or consecutvely. References to the Board n ths statement are references to the Board of GPTRE and GPTMHL. Ths statement s current as at 31 December 2017. Prncple 1: Lay sold foundatons for management and oversght 1.1 Role and Responsbltes of the Board and Delegaton to Management The Board s accountable to Securtyholders for GPT s performance and responsble for the overall management and governance of GPT. Specfc responsbltes of the Board are set out n the Board Charter and nclude: settng strategc drecton and ensurng t s followed; approvng and montorng busness plans; approvng major nvestments and commtments; revewng and ratfyng systems of rsk management, nternal complance and control and legal complance and codes of conduct; revewng Chef Executve Offcer and Leadershp Team performance and results; revewng Drector and Leadershp Team compensaton and benefts; and approvng and montorng fnancal and other reportng. A copy of the s avalable on GPT s webste (www.gpt.com.au). All matters not specfcally reserved for the Board and necessary for the day to day management of GPT are delegated to management and the Board has approved delegated authorty lmts for management n ths context whch are subject to perodc revew. The Board has also delegated specfc responsbltes to the Board Commttees to deal wth partcular matters. A summary of the Board Commttees and ther membershp durng 2017 are set out below. The roles and responsbltes of the Board Commttees are dscussed n more detal throughout ths statement. 1
Nomnaton and Remuneraton Commttee Gene Tlbrook (Char) Sustanablty and Audt Commttee Rsk Commttee Mchelle Eleen Doyle Somervlle (Char) (Char) Rob Ferguson Brendan Crotty Brendan Crotty Eleen Doyle Eleen Doyle Swe Guan Lm Swe Guan Lm Mchelle Somervlle The Board and the Board Commttees revew GPT s governance framework to ensure t remans approprate and takes nto account any relevant regulatory changes. The Board and Board Commttee Charters are revewed annually. 1.2 Drector and Senor Executve Appontments All new Drectors have formal agreements governng ther appontment. These agreements set out: term of appontment subject to Securtyholder approval; remuneraton; expectatons n relaton to attendance at meetngs; expectatons and procedures n relaton to other drectorshps; procedures n relaton to conflcts of nterest; nsurance and ndemnty arrangements; complance wth governance polces (ncludng Code of Conduct, Board and Commttee Charters, Personal Dealng Polcy and Conflcts Management Polcy); access to ndependent advce; and confdentalty and access to nformaton. Approprate background checks are undertaken n respect of all new Drectors pror to ther appontment. Ths ncludes background checks on character, experence, educaton, crmnal record and bankruptcy hstory. Where a Drector s standng for electon or re-electon, GPT provdes Securtyholders wth a Notce of Meetng and Explanatory Memorandum whch ncludes all nformaton n the Group s possesson to enable Securtyholders to make an nformed decson on whether to elect or re-elect a drector. All Senor Executves have formal agreements governng ther employment. These agreements set out: job descrpton; remuneraton; complance wth governance polces (ncludng Code of Conduct, Personal Dealng Polcy and Conflcts Management Polcy); confdentalty; and notce and rghts on termnaton. 1.3 Role of the Company Secretary The Board must approve the appontment or removal of the Company Secretary and the Company Secretary s accountable to the Board, through the Char, on all matters to do wth the proper functonng of the Board. 1.4 Dversty GPT promotes an nclusve workplace where employee dfferences such as gender, age, ethncty, culture, dsablty and sexualty are respected. GPT consders that an nclusve culture enhances performance of the busness and delvers long term benefts for all ts stakeholders. Wth ths n mnd, GPT s commtted to recrutment, selecton, development and successon processes for roles whch ensures canddates are developed, selected or promoted on the bass of ndvdual mert wthout bas, patronage or favourtsm. GPT acknowledges that females are under-represented n senor leadershp roles and as members of boards across Australa. Whle GPT s workforce s 54% female, 22% of the Leadershp team and 33% of the Non-Executve Drectors are females. Durng 2017 GPT contnued to delver on ts Dversty Strategy, mplementng strateges to promote gender dversty, ncrease Frst Natons representaton and advance LGBTI ncluson. GPT contnues to delver greater access to flexble work, provdng enhanced parental leave, addressng the gender based retrement savngs gap by contnuaton of superannuaton payments whle on parental leave, and easng the fnancal burden of employees returnng to work wth a subsdy on chldcare costs for elgble ndvduals. Through systematcally addressng ssues that prevent females from pursung ther careers and realsng ther potental at work, GPT s commtted to mprovng gender dversty throughout the busness, wth female representaton n senor leadershp roles 1 reachng 41.4% at 31 December 2017 (36.73 % at the end of 2016). Pror to 2013, GPT had no Frst Natons employees, but by the end of 2017, Frst Natons employees represented around 1% of GPT s permanent workforce, and 2.4% when graduates and nterns are ncluded. The Group also concluded ts naugural Reconclaton Acton Plan (RAP) and wll launch the Group s second RAP n 2018. GPT also made sgnfcant strdes n 2017 wth ts LGBTI strategy establshng GLAD, GPT s LGBTI Awareness & Dversty network. GLAD sgned up 120 alles, provded tranng to employees through our partnershp wth Prde n Dversty, facltated GPT s partcpaton n the Australan Workplace Equalty Index, and celebrated key dates lke IDAHOT and Wear t Purple Day. Led by our CEO, GPT strongly supported the Same Sex Marrage plebscte and provded support to our employees through the perod. GPT s performance from a dversty and ncluson perspectve was acknowledged by our employees n the 2017 Employee Engagement Survey run by Wlls Towers Watson, where GPT acheved a total favorable score for dversty and ncluson of 94%, 14% above the Australan natonal Norm 2. 1. Encompassng the GPT Leadershp Team and a select cohort of senor leadershp postons, wth ncluson determned by such factors as senorty, nfluence and P&L responsblty. 2. As defned by Wlls Towers Watson s database of over 170 companes representng over 190,000 employees. 2
GPT also approved a Mental Health Strategy n November 2017. The strategy ams to provde meanngful and practcal support to employees to preserve, mantan and, when requred, restore good mental health. The strategy ncludes educaton and tranng for people managers to provde support to employees, as well as a range of other resources ncludng access to counsellng, specalst support servces and addtonal leave provson. A copy of GPT s Dversty Polcy and addtonal nformaton regardng dversty s avalable on GPT s webste (www.gpt.com.au). GPT s most recent Gender Equalty Indcators as defned and publshed under the Workforce Gender Equalty Act are avalable at www.wgea.gov.au. 1.5 Revew of Board Performance The Board consders that annual revews of ts performance are essental n enhancng the Board s effectveness as well as provdng an opportunty to rase and resolve ssues. Performance revews may be undertaken nternally or wth the assstance of an external facltator and cover the actvtes of the Board and each of ts Commttees wth feedback beng provded by the Drectors and members of the Leadershp Team. The Board undertook an nternal revew of the Board s performance for the 2017 year. Whle the results showed that there are no materal ssues, the Board dentfed a number of refnements to consder n 2018. A revew of the Board s performance was undertaken by an external facltator n 2016. The Group also partcpates n nvestor surveys conducted by the Corporate Confdence Index and the results of ths are consdered by the Board. 1.6 Revew of Senor Executves Performance GPT has a performance management system to provde senor executves wth clear performance objectves. Components of ths system nclude GPT or busness unt fnancal and non-fnancal key performance ndcators, as well as an assessment of behavours beng consstent wth GPT s desred values and culture. Key performance ndcators are ntally set by the Board for the Chef Executve Offcer and are then cascaded nto the busness. The Nomnaton and Remuneraton Commttee s responsble for makng recommendatons to the Board on the remuneraton polcy for senor executve remuneraton. The Char of the Board and the Char of the Nomnaton and Remuneraton Commttee meet wth a number of nsttutonal securtyholders each year to dscuss GPT s remuneraton framework. The Nomnaton and Remuneraton Commttee conducts a performance revew of the Chef Executve Offcer annually. In turn, the Chef Executve Offcer conducts annual performance revews of the Leadershp Team. The performance of the Chef Executve Offcer and Leadershp Team durng 2017 was revewed n accordance wth these prncples. 1.7 Attendance at Board and Commttee Meetngs by Drectors The number of Board and Commttee meetngs held and Drectors attendance at those meetngs durng the fnancal year s set out n the Drectors Report n the 2017 Annual Fnancal Report. 1.8 Access to Informaton and Independent Advce Each Drector enters nto an Access and Indemnty Deed wth GPT to ensure seven years access to documents after ther retrement as a Drector. The Board collectvely, and each Drector ndvdually, subject to pror consultaton wth the Char of the Board, has the rght to seek ndependent professonal advce n the performance of ther dutes as a Drector. Each Drector also has unfettered access to nternal records and senor management. Prncple 2: Structure the board to add value 2.1 Composton of the Board and ts Commttees The Board s commtted to ensurng that drectors have a collectve mx of sklls, experence, expertse and dversty (ncludng gender dversty). The Board also seeks to have a mx of tenure for ts drectors to balance those who have establshed knowledge of GPT s busness and hstory, wth those who brng a fresh perspectve and dfferent nsghts. The Board comprses sx Non Executve ndependent Drectors and one Executve Drector, wth the Char beng a Non- Executve Drector. Detals concernng the membershp of the Board, the perod of offce and the experence and expertse of each of the Drectors are set out n the 2017 Annual Fnancal Report and are also avalable on GPT s webste. The Board has establshed the Audt Commttee, Nomnaton and Remuneraton Commttee and Sustanablty and Rsk Commttee to assst t n carryng out ts responsbltes. Each Commttee has a formal Charter settng out ts responsbltes and functons whch s revewed annually. The Char of each Commttee s an Non-Executve ndependent Drector wth the approprate qualfcatons and experence to carry out that role. Members of the Commttees must all be Non Executve Drectors. Copes of the Commttee Charters are avalable on GPT s webste (www.gpt.com.au). The Board receves mnutes of Board Commttee meetngs and updates from the Chars of each Board Commttee. Further detals can be found n the Remuneraton Report on pages 13 to 21 of the Drectors Report n the 2017 Annual Fnancal Report. 3
2.2 Nomnaton and Remuneraton Commttee GPT s Nomnaton and Remuneraton Commttee s responsble for undertakng the followng actvtes on behalf of the Board: developng and overseeng the mplementaton of GPT s remuneraton framework; revewng and approvng remuneraton levels for the Board, Chef Executve Offcer and members of the Leadershp Team; revewng and approvng key performance ndcators for the Chef Executve Offcer and assessng the Chef Executve Offcer s performance aganst those key performance ndcators; overseeng the successon plannng process for the Board, Chef Executve Offcer and the Leadershp Team; revewng and recommendng Non-Executve Drector and Chef Executve Offcer appontments; mplementng procedures for the evaluaton of the performance of the Board; and approvng and overseeng the mplementaton of GPT s dversty strategy. The members of the Nomnaton and Remuneraton Commttee are all ndependent Non-Executve Drectors and are set out n secton 1.1. The GPT Board s responsble for revewng ts successon plannng requrements and needs. If a new Non-Executve drector s requred to be apponted to the Board, the Nomnaton and Remuneraton Commttee s responsble for overseeng the selecton process. Before makng a recommendaton to the Board regardng potental canddates for the appontment of a new Non- Executve Drector, the Nomnaton and Remuneraton Commttee wll assess the sklls matrx (refer to secton 2.3), any future successon plannng needs ncludng the tenure of the Drectors and dversty on the Board n accordance wth GPT s polcy on the Selecton and Appontment of Drectors. An external professonal recrutment search frm may also be employed. A copy of GPT s Selecton and Appontment of Drectors Polcy s avalable on GPT s webste (www.gpt.com.au). 2.3 Sklls Matrx The Board s commtted to mantanng a dversty of sklls, experence and attrbutes n the membershp of the Board. The Board has dentfed the sklls and experence set out n the table below, as those requred for GPT s drectors to provde effectve governance and drecton for the Group. Sklls and experence Techncal Fnance and Captal Management Accountng Property Investment Management Property Asset Management Property Development Funds Management Mergers and Acqustons General Busness Management Strategc Plannng Rsk Management Health & Safety Governance Legal/Regulatory/Complance Human Resources and Executve Remuneraton IT & Dgtal For each of the sklls and experence dentfed, the level of experence s assessed usng a set of objectve crtera whch nclude: tertary qualfcatons; relevant ndustry experence or qualfcatons; and length of experence at a senor level. For the Techncal areas dentfed above, the Board looks to have several members wth extensve experence ganed n senor executve or professonal roles. For the General areas, more wdely spread exposure, across executve, professonal and board roles s regarded by the Board as essental. Havng assessed ts composton and the results of the analyss set out above, the Board consders that t has the approprate mx of sklls and experence to enable t to dscharge ts responsbltes. The sklls matrx contnues to be revewed and updated as approprate and used by the Board as a key component of successon plannng, commttee membershp and professonal development. 2.4 Drector Independence The Board s responsble for determnng the ndependence of each Drector. In determnng each Drector s ndependence, the Board refers to the followng factors adapted from the Prncples and set out n the : the Drector must be non executve; the Drector cannot be a substantal Securtyholder of GPT; the Drector must not have been employed n an executve capacty wth GPT wthn the last three years; the Drector must not have been a prncpal or employee of a materal professonal advser or consultant to GPT wthn the last three years; 4
the Drector must not have been a materal suppler or customer to GPT wthn the last three years; the Drector has no materal contractual relatonshp wth GPT other than as a Drector; the Drector has not served on the Board for a perod whch could, or could reasonably be perceved to, materally nterfere wth the Drector s ablty to act n the best nterests of GPT; the Drector s free from any nterest and any busness or other relatonshp whch could, or could reasonably be perceved to, materally nterfere wth the Drector s ablty to act n the best nterests of GPT; and the Drector s past performance (f applcable) n ther role as a Drector. The Board recognses that the above factors are relevant n determnng ndependence, but consders that ndependence s a matter of judgment havng regard to all the facts and crcumstances of partcular relatonshps. The Board consders that of the matters set out above, the most relevant consderaton for determnng the ndependence of GPT s Drectors s that a Drector be free from any nterest, busness or other relatonshp whch could, or could reasonably be perceved to, materally nterfere wth the Drector s ablty to act n the best nterests of GPT. Ths prncple s also used when consderng ssues such as the materalty of any dentfed nterest, busness or relatonshp. The Board evaluates the materalty of any nterests or relatonshps on a case by case bass havng regard to the crcumstances of each Drector. Based on the crtera above, the Board consders all of ts Non- Executve Drectors to be ndependent. 2.5 Notfcaton of Interests and Conflcts Drectors are requred to notfy the Char of any contract, offce (ncludng other drectorshps) or nterest whch mght nvolve a conflct of nterest and a lst of nterests s ncluded at the front of the agenda for each Board meetng. The Board has developed a Conflcts Management Polcy to provde gudance n the event of a conflct of nterest arsng from the exstence of oblgatons owed by certan Drectors to other corporate enttes, and also from any materal personal nterests held by the Drectors. In partcular, where a conflct of nterest may exst, the conflcted Drectors wll not vote on the matter beng consdered or take reman present for the dscusson unless all the non-conflcted drectors agree otherwse. A copy of GPT s Conflcts Management Polcy s avalable on GPT s webste (www.gpt.com.au). 2.6 Inducton and Tranng On commencement of employment, all Drectors and employees undertake an nducton program whch ncludes nformaton on GPT s values, Code of Conduct, H&S and employment practces and procedures. General complance tranng s provded to all employees and specfc tranng s provded dependng on job functon (eg to meet lcensng requrements, or to meet specfc ndustry or professonal body accredtaton requrements). GPT has also bult an n house learnng and development capablty to support the mantenance and development of requred employee capabltes. Ongong tranng for Drectors nvolves educaton programs whch are ncorporated nto the Board program, vsts to GPT s offces or assets and presentatons on developments mpactng the busness or the wder economy. Prncple 3: Act ethcally and responsbly 3.1 Culture and Code of Conduct The Board s commtted to mantanng a transparent and nclusve culture at GPT and understands the mportance of the Board s and management s role n promotng a transparent and nclusve culture. GPT s employee engagement surveys nclude questons desgned to allow all GPT employees to provde ther vews on GPT s culture. The results of those surveys are reported to the Board. The Group s Code of Conduct s an mportant aspect of establshng and mantanng that culture and asssts Drectors and employees to ensure that ther conduct and the conduct of GPT meets the hghest ethcal and professonal standards. All Drectors and employees are bound by GPT s Code of Conduct. The Code of Conduct does not seek to provde prescrptve rules on every ethcal ssue that may be faced by Drectors or employees. Rather t provdes a benchmark for ethcal behavour to assst GPT to mantan the trust and confdence of all of GPT s stakeholders. The Code of Conduct also artculates the consequences f these standards are not met. All employees receve Code of Conduct tranng on commencement of employment wth GPT and routne refresher tranng thereafter. GPT also has a Whstleblower Polcy whch deals wth reportng and nvestgatng unethcal behavour. Copes of GPT s Code of Conduct and Whstleblower Polcy are avalable on GPT s webste (www.gpt.com.au). 5
3.2 Tradng n Securtes and Hedgng In addton to ts responsbltes under the Corporatons Act 2001, the Board has establshed a Personal Dealng Polcy for tradng n GPT Securtes. Ths polcy provdes that: subject to specfc exemptons set out n the polcy, Drectors and employees are only permtted to trade n GPT Securtes n the sx week perod begnnng one day after the announcement of GPT s half year, full year results, the Annual General Meetng of Securtyholders; or the provson by the Board of forecasts n an offer document released to the market; even durng the permtted tradng wndow, no Drector or employee may deal n GPT Securtes f he or she has nformaton whch, f publcly avalable, mght have a materal mpact on the prce of those Securtes; and key Management Personnel (as defned by secton 9 of the Corporatons Act 2001) may not enter nto an arrangement (wth anyone) f the arrangement would have the effect of lmtng that persons rsk exposure n respect of an element of ther remuneraton that has not vested or has vested but remans subject to a holdng lock. GPT s Code of Conduct also sets out an explanaton and prohbton of nsder tradng. A copy of GPT s Personal Dealng Polcy s avalable from GPT s webste (www.gpt.com.au). 3.3 Poltcal Donatons GPT s polcy prohbts the makng of poltcal donatons. 3.4 Sustanablty and Rsk Commttee GPT s commtted to operatng a sustanable busness delverng long-term Securtyholder value. The Board has establshed a Sustanablty and Rsk Commttee wth a focus on: overseeng the rsk management, complance and nternal control frameworks of GPT and consderng any rsk and complance matters relatng to the affars of GPT that t determnes to be desrable; revewng GPT s system for complance wth relevant laws, regulatons, ndustry standards and codes; and revewng and montorng GPT s sustanablty strategy, and overseeng the mplementaton of polces and systems n support of GPT s sustanablty strategy, and montorng progress toward goals and ntatves for contnued mprovement. 3.5 Governance for Externally Managed Funds GPT recognses that as the manager of externally managed vehcles, conflcts or potental conflcts may arse from tme to tme between GPT and the externally managed funds. Therefore, effectve and transparent governance procedures are vtal to ensure that the nterests of nvestors n the funds are beng protected. GPT has adopted the followng basc prncples for managng conflcts of nterest that may arse: regular reportng n relaton to conflcts; tranng of executves on ther responsbltes n provdng servces to externally managed funds as part of the funds management busness; clear delneaton of the matters that requre nvestor consent n the operaton of the funds; and fees pad to GPT by the funds are as stpulated n the documentaton establshng the fund or otherwse on an arm s length bass. GPT s funds management busness currently comprses the GPT Wholesale Offce Fund and GPT Wholesale Shoppng Centre Fund (collectvely the Wholesale Funds ). The responsble entty of the Wholesale Funds s GPT Funds Management Lmted (GPTFM), a subsdary of GPTMHL (Responsble Entty). The Board of GPTFM s responsble for all decsons n respect of the Wholesale Funds and, f there s a conflct between the nvestors nterests and the nterests of GPT, the Board of GPTFM must gve prorty to ther nvestors nterests. Under the arrangements entered nto between GPT and nvestors, t has been agreed that the Board of GPTFM wll be comprsed of a majorty of ndependent drectors and transactons between the Wholesale Funds and GPT are to be approved by the Board of the GPTFM (comprsed only of ts ndependent drectors). The members of the Sustanablty and Rsk Commttee are all ndependent Non-Executve Drectors and are set out n secton 1.1. 6 6
Prncple 4: Safeguard ntegrty n corporate reportng 4.1 Audt Commttee The Board has establshed the Audt Commttee to gve assurance regardng the qualty and relablty of fnancal nformaton used by the Board and to revew and report on fnancal statements ssued by GPT. In addton, the Audt Commttee performs a range of advsory servces to the Board, ncludng: revewng the qualty and relablty of the fnancal reportng processes; revewng and reportng on fnancal statements ssued by GPT; revewng the external audtor s qualfcatons, performance, audt plans and ndependence; overseeng the nternal audt functon; overseeng the rsk management framework to dentfy and manage all major tax rsks; and ensurng that polces and procedures are n place to dentfy, measure, manage and montor treasury rsks, and that those polces and procedures are compled wth. At least one member of the Audt Commttee has relevant accountng qualfcatons and experence and all members have a good understandng of fnancal reportng and rsk management. The members of the Audt Commttee are all ndependent Non- Executve Drectors and are set out n secton 1.1. 4.2 Integrty n Fnancal Reportng, Rsk Management and Internal Control For the perod ended 31 December 2017, the Board has receved wrtten assurance from the Chef Executve Offcer and Chef Fnancal Offcer that the declaraton provded by them n accordance wth secton 295A of the Corporatons Act s, n ther opnon, founded on a sound system of rsk management and nternal complance and control whch, n all materal respects, mplements the polces adopted by the Board and that ths system s operatng effectvely and effcently n all materal respects n relaton to fnancal reportng. Snce 31 December 2017 nothng has come to the attenton of the Chef Executve Offcer and Chef Fnancal Offcer that would ndcate any materal change to these statements. 4.3 External Audtor GPT s external audtor PrcewaterhouseCoopers (PwC) was apponted n 2013. Under the Board s gudelnes for the engagement of, and dealng wth, the audtor: the audtor s appontment wll be revewed every fve years and the lead audt and revew partner must be rotated every fve years; any major non audt work to be undertaken by the audtor must be approved by the Audt Commttee; and the Audt Commttee regularly montors the type of non audt work undertaken by the audtor and the fees pad for such work and provdes advce to the Board on the ndependence of the audtor. The Audt Commttee s responsble for makng recommendatons to the Board on the appontment, reappontment, replacement, and remuneraton of external Audtors. A new lead audt and revew partner from PwC wll be apponted n 2018 n accordance wth the gudelnes. All fees pad to the audtors are dsclosed n GPT s Annual Fnancal Report. In relaton to the audt of the Annual Fnancal Report of GPT for the year ended 31 December 2017, PwC has provded wrtten confrmaton to the Board that, to the best of ts knowledge and belef, there have been no contraventons of: the audtor ndependence requrements of the Corporatons Act 2001; and any applcable code of professonal conduct. A copy of PwC s ndependence declaraton s ncluded at page 22 of the 2017 Annual Fnancal Report. GPT s audtor attends GPT s Annual General Meetng and s avalable to answer Securtyholder questons about the conduct of the audt and the preparaton and content of the Audtor s Report. 7
Prncple 5: Make tmely and balanced dsclosure 5.1 Contnuous Dsclosure Polcy The Board s commtted to ensurng that all stakeholders are fully nformed n a tmely manner so that tradng n GPT Securtes takes place n an nformed and compettve market. GPT has a Contnuous Dsclosure Polcy whch outlnes the concepts and prncples of contnuous dsclosure, how they apply n practce, the oblgatons on GPT personnel to keep the market nformed at all tmes, the procedures to be followed n the case of a dsclosable event and the penaltes for contravenng contnuous dsclosure oblgatons. All relevant employees receve tranng on GPT s contnuous dsclosure oblgatons to ensure tmely dsclosure of materal nformaton. The Company Secretary s responsble for communcaton wth the Australan Securtes Exchange n relaton to lstng rule oblgatons ncludng contnuous dsclosure. A copy of the Contnuous Dsclosure Polcy s avalable on GPT s webste (www.gpt.com.au). Prncple 6: Respect the rghts of securtyholders The Board s commtted to effectve communcaton wth GPT s stakeholders on all major developments and events concernng GPT s operatons and fnancal results. 6.1 Communcaton wth Stakeholders In addton to complyng wth GPT s contnuous dsclosure oblgatons, tmely and accurate nformaton s made avalable to all stakeholders n the followng manner. Announcements are: released to the Australan Securtes Exchange n the case of market senstve nformaton; posted to the News and Meda secton of the GPT webste (addtonally, nterested partes can regster for GPT s Alert Servce to receve an emaled message followng new announcements); and dstrbuted to major meda and nvestor contacts. Major communcaton forums, such as Annual and Half-Year results brefngs and the Annual General Meetng, are webcast. Securtyholders are also able to elect to receve and send communcatons to the regstry electroncally. GPT s extensve webste ncludes the followng nformaton: copes of Annual Reports; hstorcal nformaton n relaton to dstrbutons ncludng all dstrbutons pad snce 1985; detaled property nformaton; and corporate governance documents such as Board and Commttee charters and polces. Executves also meet wth nvestors and ther representatves on a regular bass to dscuss GPT s performance. Addtonal nformaton regardng Stakeholder Engagement s avalable on GPT s webste under the secton on Sustanablty. 6.2 Annual General Meetng GPT s Annual General Meetng s held each year, typcally between Aprl and June. In addton to formal busness, the meetng s an opportunty for Securtyholders to be brefed on GPT s actvtes and to ask questons of the Board and management. A Notce of Meetng and accompanyng Explanatory Memorandum on proposed resolutons s provded to Securtyholders well n advance of any meetng of Securtyholders. It s also posted on GPT s webste and lodged wth the Australan Securtes Exchange. Securtyholders who are not able to attend GPT s Annual General Meetng are able to vote by proxy n accordance wth the Corporatons Act 2001 and also vew the Annual General Meetng by webcast. Addtonally, the Charman s address s mmedately announced to the Australan Securtes Exchange. Prncple 7: Recognse and manage rsk 7.1 Board oversght of rsk The Board s ultmately accountable for corporate governance and the approprate management of rsk. The Board determnes the rsk appette and oversees the rsk profle to ensure actvtes are consstent wth GPT s strategy and values. The Sustanablty and Rsk Commttee supports the Board and s responsble for overseeng and revewng the effectveness of the rsk management framework. Further nformaton about the Sustanablty and Rsk Commttee s set out n secton 4.1. The Sustanablty and Rsk Commttee s specfc responsbltes relatng to rsk management nclude: overseeng and revewng the effectveness of GPT s rsk management framework that ncorporates a system of assurance confrmng that GPT s materal rsks are beng consdered and approprately managed; montorng and assessng whether GPT operates wthn the Group s stated appette for rsk; recevng and revewng reports regardng materal busness rsks undertaken n accordance wth the rsk management framework and through these reports, montorng the progress of management acton plans; makng recommendatons to the Board on any materal ssues arsng from reports to the Sustanablty and Rsk Commttee; 8
revewng the adequacy of nsurance cover; revewng GPT s crss management, busness contnuty and dsaster recovery plans and annual testng of those plans; recevng and revewng reports n relaton to the operaton of the Whstleblower Polcy; and revewng GPT s Rsk Management Polcy. The Char of the Sustanablty and Rsk Commttee reports the proceedngs, delberatons and recommendatons of the Commttee to the next meetng of the Board followng any meetng of the Commttee. 7.2 Revewng GPT s rsk management framework The Sustanablty and Rsk Commttee s Charter requres members to oversee and revew the effectveness of GPT s rsk management framework and to revew the GPT Rsk Management Polcy. A revew has been undertaken for 2017 and the Sustanablty and Rsk Commttee s satsfed that the Group s rsk management framework and related rsk management polcy effectvely support management s executon of strategy wthn the Board s appette for rsk. 7.3 Internal Audt Internal Audt s purpose s to provde the Board and management wth ndependent and objectve assurance and advce on the effectveness of the GPT Group s system of rsk management, nternal complance, control and governance. Internal Audt personnel report to the Chef Rsk Offcer, and both have drect access to the Audt Commttee. The Audt Commttee revew and approve GPT s Internal Audt Charter and strategc nternal audt plan. The Audt Commttee receves and revews reports regardng nternal audt actvty undertaken, and through these reports montor the progress of management acton plans. The Commttee make recommendatons to the GPT Board on any materal ssues arsng from the reports. Internal Audt has unfettered access to all of GPT s assets, systems, employees and records to execute ts role and actvtes. 7.4 Materal rsk exposure The Drectors Report n the 2017 Annual Fnancal Report addresses the Group s materal rsks (ncludng any materal exposure to economc, envronmental and socal sustanablty rsks) and the strateges used to manage them. Prncple 8: Remunerate farly and responsbly 8.1 Role of the Nomnaton and Remuneraton Commttee The Board has establshed a Nomnaton and Remuneraton Commttee. Further nformaton about the commttee s set out n secton 2.2. 8.2 Remuneraton Framework GPT s remuneraton framework s desgned to demonstrate a clear and drect lnk between GPT s performance and an ndvdual s performance and remuneraton. The Board, wth the assstance of the Nomnaton and Remuneraton Commttee, ams to create a remuneraton system that: s transparent; s far and market compettve; encourages superor performance by algnng employee rewards wth the nterests of all stakeholders; attracts, motvates, retans and rewards talented and sklled drectors, executves and employees; and rewards employees who algn ther conduct and performance wth the core values and culture of GPT. Non Executve Drectors receve fees whch reflect ther sklls, responsblty and tme commtment n the dscharge of ther dutes. There s no performance lnk, n that fees are fxed wth no short or long term ncentve schemes n place. Non Executve Drectors do not receve any retrement benefts. GPT s phlosophy and the polces and procedures (ncludng n relaton to performance rghts granted under GPT s ncentve plans) that are appled to determne the nature and amount of remuneraton pad to Drectors and employees are set out n the Remuneraton secton of the Drectors Report n the 2017 Annual Fnancal Report (pages 13 to 21). GPT s Personal Dealng Polcy restrcts employees from enterng nto arrangements whch have the effect of lmtng that employee s rsk exposure n respect of an element of ther remuneraton that has not vested, or has vested but remans subject to a holdng lock. 9
ASX Corporate Governance Recommendaton Reconclaton to 31 December 2017 Prncples and Recommendatons Reference Comply 1 Lay sold foundatons for management and oversght 1.1 A lsted entty should dsclose: 1.1 a. the respectve roles and responsbltes of ts board and management; and b. those matters expressly reserved to the board and those delegated to management. 1.2 A lsted entty should: 1.2 a. undertake approprate checks before appontng a person, or puttng forward to securty holders a canddate for electon, as a drector; and b. provde securty holders wth all materal nformaton n ts possesson relevant to a decson on whether or not to elect or re-elect a drector. 1.3 A lsted entty should have a wrtten agreement wth each drector and senor executve settng out the terms of ther appontment. Selecton and Appontment of Drectors Polcy 1.2 Nomnaton and Remuneraton Commttee Charter 1.4 The company secretary s a lsted entty should be accountable drectly to the board, through 1.3 the char, on all matters to do wth the proper functonng of the board. 1.5 A lsted entty should: 1.4 a. have a dversty polcy whch ncludes requrements for the board or a relevant commttee of the board to set measurable objectves for achevng gender dversty and to assess annually both the objectves and the entty s progress n achevng them; b. dsclose that polcy or a summary of t; and c. dsclose as at the end of each reportng perod the measurable objectves for achevng gender dversty set by the board or a relevant commttee of the board n accordance wth the entty s dversty polcy and ts progress towards achevng them, and ether: 1. the respectve proportons of men and women on the board, n senor executve postons and across the whole organsaton (ncludng how the entty has defned senor executve for these purposes); or 2. f the entty s a relevant employer under the Workplace Gender Equalty Act, the entty s most recent Gender Equalty Indcators, as defned n and publshed under that Act. Nomnaton and Remuneraton Commttee Charter 1.6 A lsted entty should: 1.5 a. have and dsclose a process for perodcally evaluatng the performance of the board, ts commttees and ndvdual drectors; and b. dsclose, n relaton to each reportng perod, whether a performance evaluaton was undertaken n the reportng perod n accordance wth that process. Nomnaton and Remuneraton Commttee Charter 1.7 A lsted entty should: 1.6, 8.2 a. have and dsclose a process for perodcally evaluatng the performance of ts senor executves; and b. dsclose, n relaton to each reportng perod, whether a performance evaluaton was undertaken n the reportng perod n accordance wth that process. 2 Structure the Board to add value 2.1 The board of a lsted entty should: a. have a nomnaton commttee whch: 1.has at least three members, a majorty of whom are ndependent drectors; and 2. s chared by an ndependent drector, and dsclose: 3. the charter of the commttee; 4. the members of the commttee; and 5. as at the end of each reportng perod, the number of tmes the commttee met throughout the perod and the ndvdual attendances of the members at those meetngs; or 1.7, 2.1, 2.2, 8.1 Drectors Report b. f t does not have a nomnaton commttee, dsclose that fact and the processes t employs to address board successon ssues and to ensure that the board has the approprate balance of sklls, knowledge, experence, ndependence and dversty to enable t to dscharge ts dutes and responsbltes effectvely. 10
Prncples and Recommendatons Reference Comply 2.2 A lsted entty should have and dsclose a board sklls matrx settng out the mx of sklls and 2.3 dversty that the board currently has or s lookng to acheve n ts membershp. 2.3 A lsted entty should dsclose: 2.4 a. the names of the drectors consdered by the board to be ndependent drectors; b. f a drector has an nterest, poston, assocaton or relatonshp of the type descrbed n Box 2.3 but the board s of the opnon that t does not compromse the ndependence of the drector, the nature of the nterest, poston, assocaton or relatonshp n queston and an explanaton of why the board s of that opnon; and c. the length of servce of each drector. Drectors Report 2.4 A majorty of the board of a lsted entty should be ndependent drectors. 2.1, 2.4 Drectors Report 2.5 The char of the board of a lsted entty should be an ndependent drector and, n partcular, 2.1 should not be the same person as the CEO of the entty. Drectors Report 2.6 A lsted entty should have a program for nductng new drectors and provde approprate 2.6 professonal development opportuntes for drectors to develop and mantan the sklls and knowledge needed to perform ther role as drectors effectvely. 3 Act ethcally and responsbly 3.1 A lsted entty should: 3.1 a. have a code of conduct for ts drectors, senor executves and employees; and b. dsclose that code or a summary of t. 4 Safeguard ntegrty n corporate reportng 4.1 The board of a lsted entty should: 1.7, 2.1, 4.1, 7.1 a. have an audt commttee whch: 1. has at least three members, all of whom are non-executve drectors and a majorty of whom are ndependent drectors; and 2. s chared by an ndependent drector, who s not the char of the board, and dsclose: 3. the charter of the commttee; 4. the relevant qualfcatons and experence of the members of the commttee; and 5. n relaton to each reportng perod, the number of tmes the commttee met throughout the perod and the ndvdual attendances of the members at those meetngs; or b. f t does not have an audt commttee, dsclose that fact and the processes t employs that ndependently verfy and safeguard the ntegrty of ts fnancal reportng. Audt Commttee Charter Drectors Report 4.2 The board of a lsted entty should, before t approves the entty s fnancal statements for a 4.2 fnancal perod, receve from ts CEO and CFO a declaraton that, n ther opnon, the fnancal records of the entty have been properly mantaned and that the fnancal statements comply wth the approprate accountng standards and gve a true and far vew of the fnancal poston and performance of the entty and that the opnon has been formed on the bass of a sound system of rsk management and nternal control whch s operatng effectvely. 4.3 A lsted entty that has an AGM should ensure that ts external audtor attends ts AGM and s 4.3 avalable to answer questons from securty holders relevant to the audt. 5 Make tmely and balanced dsclosure 5.1 A lsted entty should: 5.1 a. have a wrtten polcy for complyng wth ts contnuous dsclosure oblgatons under the Lstng Rules; and b. dsclose that polcy or a summary of t. 6 Respect the rghts of securty holders 6.1 A lsted entty should provde nformaton about tself and ts governance to nvestors va ts 6.1 webste. 6.2 A lsted entty should desgn and mplement an nvestor relatons program to facltate effectve 6.1 two-way communcaton wth nvestors. 6.3 A lsted entty should dsclose the polces and processes t has n place to facltate and 6.2 encourage partcpaton at meetngs of securty holders. 6.4 A lsted entty should gve securty holders the opton to receve communcatons from, and send communcatons to, the entty and ts securty regstry electroncally. 6.1 11
Prncples and Recommendatons Reference Comply 7 Recognse and manage rsk 7.1 The board of a lsted entty should: 1.7, 2.1, 4.1, 7.1 a. have a commttee or commttees to oversee rsk, each of whch: 1. has at least three members, a majorty of whom are ndependent drectors; and 2. s chared by an ndependent drector; and dsclose; 3. the charter of the commttee; 4. the members of the commttee; and 5. as at the end of each reportng perod, the number of tmes the commttee met throughout the perod and the ndvdual attendances of the members at those meetngs; or b. f t does not have a rsk commttee or commttees that satsfy (a) above, dsclose that fact and the processes t employs for overseeng the entty s rsk management framework. 7.2 The board or a commttee of the board should: a. revew the entty s rsk management framework at least annually to satsfy tself that t contnues to be sound; and b. dsclose, n relaton to each reportng perod, whether such a revew has taken place. 7.3 A lsted entty should dsclose: a. f t has an nternal audt functon, how the functon s structured and what role t performs; or b. f t does not have an nternal audt functon, that fact and the processes t employs for evaluatng and contnually mprovng the effectveness of ts rsk management and nternal control processes. 7.4 A lsted entty should dsclose whether t has any materal exposure to economc, envronmental and socal sustanablty rsks and, f t does, how t manages or ntends to manage those rsks. Sustanablty and Rsk Commttee Charter Drectors Report 7.2 7.3 7.4 8 Remunerate farly and responsbly 8.1 The Board of a lsted entty should: 1.7, 2.1, 2.2 a. have a remuneraton commttee whch: 1. has at least three members, a majorty of whom are ndependent drectors; 2. s chared by an ndependent drector; and dsclose; 3. the charter of the commttee; 4. the members of the commttee; 5. as at the end of each reportng perod, the number of tmes the commttee met throughout the perod and the ndvdual attendances of the members at those meetngs; or b. f t does not have a remuneraton commttee, dsclose that fact and the processes t employs for settng the level 8.2 A lsted entty should separately dsclose ts polces and practces regardng the remuneraton of non-executve drectors and the remuneraton of executve drectors and other senor executves. 8.3 A lsted entty whch has an equty-based remuneraton scheme should: a. have a polcy on whether partcpants are permtted to enter nto transactons (whether through the use of dervatves or otherwse) whch lmt the economc rsk of partcpatng n the scheme; and b. dsclose that polcy or a summary of t. Nomnaton and Remuneraton Commttee Charter 8.2 Drectors Report 3.2, 8.2 GPT023 02/18 12