Perpetual : PPT - Corporate Governance Statement

Perpetual Limited ACN 000 431 827‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌

1. Introduction 3

2. Corporate responsibility: Our philosophy and approach 4

3. Our people 4

4. The community 4

5. Responsible & sustainable business practices 5

6. Strong corporate governance 6

7. Reducing environmental impact 7

8. Social sustainability risks & strategies 8

9. Social sustainability risks 8

10. Social sustainability strategies and performance 10

11. Governance 18

12. Governance overview 18

13. Board committees 23

14. Governance documents 24

15. Performance evaluation and remuneration 27

16. Risk management and internal controls 28

17. Risk management 28

18. Material risks 28

19. Internal controls framework 28

20. Managing Director and Chief Financial Officer certifications 29

21. Audit process 29

22. Auditor independence 30

23. Conclusion 31

24. Appendix: Relevant documents 32

26. INTRODUCTION‌ Purpose and document overview

    Perpetual's Board and management have a long-standing commitment to good corporate governance. Indeed success in Perpetual's core businesses, the management of other people's money and the safekeeping of assets and securities, relies on this commitment. Perpetual is also committed to transparent reporting on corporate responsibility risks and how the Executive Team and Board are mitigating these risks in pursuit of sustainable business performance.

    The purpose of this document is to outline and promote Perpetual's approach to corporate governance and to meet ASX Corporate Governance reporting requirements, including disclosure of material environmental, social and governance (ESG) risks. This document includes:

    • An overview of Perpetual's philosophy as it relates to corporate governance

    • Perpetual's response to mitigating ESG risks identified as material within the Perpetual Risk Appetite Statement1 (RAS), which is part of Perpetual's Risk Management Framework, and an overview of how Perpetual is addressing these risks. This includes social sustainability, human capital and community risks. A summary of governance structures at Perpetual including:

      • Information about the Board of Directors and its Committees (for example, composition, operating practices and performance evaluation)

      • A summary of Perpetual's key corporate governance policies, including in relation to market disclosure, shareholder engagement and diversity

      • An overview of risk management and internal controls employed by Perpetual

        ASX Corporate Governance Council principles and recommendations

        At Perpetual, good corporate governance includes a genuine commitment to the ASX Corporate Governance Council Principles and Recommendations (ASX Principles). The Board considers that it complies with all ASX Principles, and has done so throughout the reporting period. This Corporate Responsibility Statement (CRS) has been approved by the Board and is current at 30 June 2016, except where otherwise indicated. Copies or summaries of the Company documents referred to in the appendix of this CRS can be found on Perpetual's website

        at www.perpetual.com.au/About/Corporate-Governance

        1 Perpetual's approach to risk management is based on a Risk Appetite Statement set by the Perpetual Board, which outlines the risk boundaries and minimum expectations of Perpetual management.

27. CORPORATE RESPONSIBILITY: OUR PHILOSOPHY AND APPROACH‌

Perpetual is committed to ensuring its business practices have a positive effect on its people and society more broadly. We know that sustainable business success depends on the engagement of our people and with our community. Our approach is built on five focus areas.

Table 1: Corporate responsibility focus areas
FOCUS AREA		DESCRIPTION
1	Our people	Building an engaged and diverse workforce and supporting our people to thrive both personally and professionally
2	The community	Seeking to make a positive impact on local and broader communities through philanthropic activity, engagement with charity groups and strengthening relationships with Aboriginal and Torres Strait Islander peoples.
3	Responsible business practices	Investing responsibly and encouraging sustainable business practices
4	Strong corporate governance	Having the highest standards of corporate governance and business probity (refer to page 18)
5	The environment	Reducing the environmental impact of our operations

1. OUR PEOPLE‌

   The Board recognises that our people are Perpetual's greatest asset and strives to maintain an engaged, competent workforce. Our people (along with our clients and shareholders) are embedded in the strategic goals of our Lead & Grow Strategy.

   Through its RAS the Board has expressed its desire to manage human capital risk. The RAS sets out a series of measures and expectations for managing the risks associated with human capital, including consideration of:

   • Recruitment and retention practices

   • Training and development

   • Talent and succession planning.

     The risk of poor management of our most important asset, our people, is potentially material to our business, and we have developed a number of strategies to address this (see page 8).

2. THE COMMUNITY‌

A widely recognised and respected financial services organisation, Perpetual is one of Australia's largest independent wealth managers, an expert adviser to successful individuals, families and businesses, and a leading provider of corporate trustee services.

Founded as the Perpetual Trustee Company in 1886, this year marks Perpetual's 51st year as an Australian listed company. Our vision is to be Australia's largest and most trusted independent wealth manager. The strong reputation and position of trust we have built with our clients and the broader community is a key asset of Perpetual. Indeed, we believe the issue of trust will only increase in importance to our business over time.