The corporate governance practices of Commonwealth Managed Investments Limited (CMIL) were in place throughout the reporting period and were fully compliant with the Australian Securities Exchange (ASX) Corporate Governance Council’s Principles and Recommendations, with one exception1. The following information is provided in accordance with the second edition of the Principles, released in August 20072.
The Responsible Entity
CMIL is the Responsible Entity of Commonwealth Property Office Fund (CPA or the Fund). CMIL is a wholly owned subsidiary of Commonwealth Bank of Australia (the Bank).
The role of the Responsible Entity is to manage the Fund in the unitholders’ best interests in accordance with the Fund ’s Constitution and the Corporations Act 2001 (Cth) (the Act).
ASX CORPORATE GOVERNANCE COUNCIL PRINCIPLES
FOUNDATIONS
Principle 1: Lay solid foundations for management and oversight
Companies should establish and disclose the respective roles and responsibilities of board and management.
• The Board of the Responsible Entity
• Charter
• Compliance Committee
• Compliance monitoring and reporting
• The Manager
• Performance evaluation
BOARD OF DIRECTORS
Principle 2: Structure the board to add value
Companies should have a board of an effective composition, size and commitment to adequately discharge its responsibilities and duties.
• Composition
• Board independence
• Independent professional advice
• Appointment
• Board performance
• Compliance Committee performance
ETHICS
Principle 3: Promote ethical and responsible decision-making
Companies should actively promote ethical and responsible decision-making.
• Board meetings
• Access to documents
• Code of conduct
• Insider trading policy
FINANCIAL REPORTING
Principle 4: Safeguard integrity in financial reporting
Companies should have a structure to independently verify and safeguard the integrity of their financial reporting.
• Audit Committee
DISCLOSURE
Principle 5: Make timely and balanced disclosureCompanies should promote timely and balanced disclosure of all material matters concerning the company.
• Continuous disclosure policy and procedures
UNITHOLDER COMMUNICATIONS
Principle 6: Respect the rights of unitholders
Companies should respect the rights of unitholders and facilitate the effective exercise of those rights.
• Communication policy
RISK MANAGEMENT
Principle 7: Recognise and manage risk
Companies should establish a sound system of risk oversight and management and internal controls.
• Risk management and internal controls
REMUNERATION
Principle 8: Remunerate fairly and responsibly
Companies should ensure that the level and composition of remuneration is sufficient and reasonable and that its relationship to performance is clear.
• Remuneration Committee
• Expense reimbursement
1As a result of Mr Michael Venter’s appointment on 16 May 2011 to a new role within the Bank, he is considered to be an Executive Director of CMIL. Recommendation 4.2 states that the Audit Committee should be structured so that it consists only of non-executive directors. Notwithstanding, given Mr Venter’s extensive financial experience, the CMIL Board considers that it is in the best interests of unitholders that he remains a member of the Audit Committee.
2Copies of the Corporate Governance Principles and Recommendations, ASX Corporate Governance Council are available from the Australian Securities Exchange telephone 131 279 (local call cost anywhere in Australia) or from their website.
