Governance

At DEXUS we pride ourselves on operating to the highest standards of corporate governance, demonstrating best practice corporate responsibility, consistent with our CR&S commitment.

DEXUS Funds Management Limited (DXFM) is the Responsible Entity of each of the four Trusts that comprise DEXUS Property Group. DXFM is also responsible for the management of a number of third party funds and mandates. Our corporate governance framework applies to all funds and mandates.

Although DEXUS Property Group is not a public company, the Board has determined that its governance framework will satisfy the highest standards of a public company. The Group therefore voluntarily conducts an annual general meeting, facilitates the appointment of Directors by DEXUS security holders and publishes a full remuneration report. Furthermore, DEXUS has elected to maintain a Compliance Committee, which provides additional oversight of the compliance function, beyond the requirements of the Corporations Act 2001.

A comprehensive approach

DEXUS has a strong governance and risk management framework in place at all levels of the business, from our prudent approach to capital management to comprehensive risk management policies and practices.

Our approach to governance is supported by our risk management framework, policies and business procedures, as follows:

Risk management framework

DEXUS has a comprehensive risk management framework in place. Our Risk & Compliance team oversees this framework and has an independent reporting line to the Board Risk Committee and Board Compliance Committee. Management Committees have been established to support the operation and oversight of the Board Committees. Board and Management Committees meet at least quarterly with additional meetings convened as required.

The framework supports the development and implementation of risk management procedures in business practices, making all employees responsible for identifying and minimising risk. This framework is based on the principles of the Australian Standard on Risk Management (AS/NZS 4360: 2004).

Each year we complete a review of our risk management framework, committee structures and policies and procedures to ensure continuous improvement in this area. In line with this commitment to continuous improvement, in 2008 a series of comprehensive risk workshops were held with senior managers to review and update our risk register. This has formed the basis of the Group’s Internal Audit program for 2009/10.

Property risk management is overseen by the Property Operations team. External service providers have been appointed to conduct environmental risk management (EM) audits and occupational health, safety and liability (OHS&L) audits. Any issues identified are reported to the Internal Risk Committee and escalated to the Board Risk Committee where appropriate.

All DEXUS properties have a comprehensive risk management program in place, addressing OHS&L and EM. Each program includes a risk management manual and an audit protocol.

Audits are carried out annually and each property receives an audit report and action plan where required. Results are communicated within the Group and peer reviewed within the portfolio to share experience and implement any necessary broader changes.

Our OHS&L program incorporates fire systems, hazard and contractor management, building design and operation, emergency response plans and pandemic procedures.

Our EM program has been developed in line with the international standard for Environmental Management Systems (ISO 14001: 2004), which incorporates elements identified under the Australian Standard for Risk Management (AS/NZS 4360) and complies with relevant legislation.

Over the coming year we plan to align our risk management framework with a climate change risk matrix to identify properties that may require an adaptation plan to address these risks. To date our initial reviews have indicated low risk.

Policies

The Risk Management framework provides clear guidance for DEXUS employees through specific policies and business procedures. Annual compliance training is compulsory for every employee.

All compliance policies are reviewed on an annual basis by senior management and approved for release by the Internal Compliance Committee. Where policies are significantly amended, the Risk & Compliance team develops and facilitates training modules to ensure our people are aware of the changes.
An overview of our key corporate governance policies, is provided below:

Whistleblowing policy

DEXUS has a Whistleblowing policy in place, whereby reports of suspected inappropriate behaviour, such as the unauthorised use of company assets, are referred to the Head of Risk and Compliance, who undertakes a confidential investigation.

Employee trading

Our Employee Trading policy requires that all employees and their associates seek approval from the Head of Risk & Compliance and the CEO before trading in DXS shares. Compliance with this policy is monitored on a quarterly basis and all employees are required to certify that they continue to comply with this policy.

Continuous disclosure

DEXUS is committed to the timely and balanced continuous disclosure of all material matters that impact the Group. Our continuous disclosure policy requires that information which is made available to the public is subject to the relevant approvals and verification prior to release.

Our continuous disclosure practices are supported by an automated system, which is designed to ensure that all material published externally is reviewed by Marketing & Communications, Risk & Compliance, Legal and the relevant business unit head prior to release. Compliance with our continuous disclosure policy is also subject to review by our Risk & Compliance team.

In 2008/09 DEXUS established a Continuous Disclosure Committee comprising executive management to further ensure that all business activities which may require disclosure to the market are formally considered.

Code of Conduct policy

All employees are required to declare their compliance with our Code of Conduct policy on a quarterly basis and undertake ongoing training.

Embedding CR&S into our governance framework

Our CR&S management framework aims to incorporate CR&S best practice throughout our business and is built on our established foundation of prudent risk management. The consideration of governance, environmental, social and economic issues are a fundamental part of our portfolio management process at all levels of operation.

Our CR&S Committee was established in 2007 to oversee the development and implementation of strategy, and systems to progress our sustainability programs and enable us to respond to emerging CR&S issues. The Committee meets quarterly with additional meetings scheduled as required. The CR&S Committee comprises senior management including the Chief Operating Officer and the sector heads of each of our business units and is further supported by our Community Engagement Working Group and our Workplace Working Group.

The CR&S Committee reports to the Board Risk Committee and our Executive Committee. The Board has ultimate responsibility for CR&S and formally reviews our progress quarterly.

Further information on our approach to corporate governance can be found on pages 4 to 9 of the DEXUS Annual Report.