Principle 1

 

Lay solid foundations for management and oversight

Responsibility for corporate governance and the internal working of each DUET entity rests with the board of RE1, RE2 or DIHL, as the case may be. The board of each company has adopted a formal charter of directors' functions and matters to be delegated to management, having regard to the recommendations in the Principles. An outline of the boards' responsibilities as set out in each company's charter is set out below:

  • Setting objectives, goals and strategic direction for management, with a view to maximising investor wealth
  • Monitoring the implementation of DUET's investment policy
  • Approving and monitoring the progress of major capital expenditure, capital management, acquisitions and divestures
  • Adopting an annual budget for the managed vehicle and monitoring its financial performance
  • Consulting with Macquarie and AMPCI on the appointment or, where appropriate, removal of the CEO or CFO or their equivalents
  • Participating in the review of the performances of the CEO and CFO or their equivalents and where appropriate replacing those officers
  • Appointing and removing the company secretary
  • Monitoring senior management's, or in the case of DIHL, RE1's performance, implementation of strategy, and resources
  • Reviewing, ratifying and monitoring systems of risk management, compliance and codes of conduct
  • Approving and monitoring financial and other reporting
  • Setting the highest business standards and codes for ethical behaviour and monitoring compliance with them.

In addition to the matters outlined above, formal delegations provide for the DUET boards to make all decisions in respect of investments and divestments, approval of directors to be appointed to DUET's asset boards, any further funding or security required for existing investments, managed vehicle level capital management and restructuring, significant related party transactions (in accordance with the DUET related party protocol), approval of financial accounts, auditors, budgets for the managed vehicle, distributions, annual reports and any significant changes to policies or debt facilities. The CEO and CFO have delegated authority (through the external management arrangements and directorships on asset boards) to make decisions in respect of managed vehicle level day-to-day administration up to certain delegated levels and day-to-day matters for asset administration including appointment of advisers and approvals of asset business plans, budgets, capital expenditure, refinancings, hedging and valuations.

Full board meetings are held at least bimonthly for RE1, RE2 and DIHL, and other meetings are called as required. Directors are provided with board reports in advance of board meetings, which contain sufficient information to enable informed discussion of all agenda items. Each independent/non-executive director of RE1, RE2 and DIHL has received a letter of appointment which details the key terms of their appointment. This letter has been enhanced for the more recent board appointments to include all of the recommended matters in the Principles. The CEO and CFO, being DUET's senior executives, have formalised job descriptions and, as Macquarie and AMPCI employees, letters of appointment.

To ensure that the DUET senior executives properly perform their duties, the following procedures are in place:

  • The CEO and CFO are AMPCI and Macquarie employees respectively, seconded to RE1 or RE2 as required. The performance of staff is assessed as part of AMPCI’s or Macquarie’s formal employee performance appraisal process as applicable. Employees are assessed against set behavioural and technical competencies. The assessment criteria use in the determining remuneration are outlined in the remuneration report, which is included in DUET's annual report. The relevant boards provide annual feedback on the performance of the CEO and CFO
  • A review of the performance of RE1 as adviser against its contractual obligations by the DIHL independent directors, with external assistance if required
  • A formal induction program to allow senior executives to participate fully and actively in management decision-making
  • Access by executives to continuing education to update and enhance their skills and knowledge.