2019 Trustee Guidebook for Director Candidates - This document is current as at 11 December 2018 This document must not be copied, distributed, or ...

 
2019 Trustee Guidebook for Director Candidates - This document is current as at 11 December 2018 This document must not be copied, distributed, or ...
2019 Trustee Guidebook for Director Candidates

                           This document is current as at 11 December 2018
This document must not be copied, distributed, or re-issued in another form, without the consent of
                            Equipsuper Pty Ltd ABN 64 006 964 049

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This Trustee Guidebook for Director Candidates is intended to provide an overview only of information
that may be relevant to a person considering becoming a Director of Equipsuper Pty Ltd in its role as
the trustee of a public offer superannuation fund and its holding company, Equipsuper Financial
Holdings Pty Ltd. They do not provide legal, financial or other advice regarding the roles and
responsibilities of Directors or the potential consequences of acting as a Director for any particular
person. These documents have been compiled without reference to the circumstances or level of
knowledge or experience of any person who may be interested in becoming a Director and should be
taken as general information only.
All information provided to potential candidates regarding Equipsuper Pty Ltd, Equipsuper Financial
Holdings Pty Ltd and the Equipsuper Superannuation Fund is private and confidential and should not
be disclosed to any person or used for any purpose other than as required in connection with a
person’s potential candidacy as a Director.
All potential candidates are encouraged to read this document and the other materials on the
member Director Nomination webpage in full before deciding to nominate as a candidate in the 2018
Member Director Nominations. In order to nominate, you need to complete and return the forms and
provide the information outlined on the webpage.

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Table of Contents
1.   Background .............................................................................................................................................. 4
     1.1        About Superannuation................................................................................................................ 4
     1.2        Equipsuper Superannuation Fund .............................................................................................. 4
     1.3        Equipsuper Pty Ltd - the trustee of the Equipsuper ................................................................... 5
     1.4        Trust law and the regulatory environment ................................................................................. 6
     1.5        The Board .................................................................................................................................... 7
2.   The role of a Director ............................................................................................................................... 8
     2.1        The role of Directors ................................................................................................................... 8
     2.2        Duties of Directors ...................................................................................................................... 8
     2.3        Director skills, competencies and attributes .............................................................................. 9
3.   Director Candidate Process .................................................................................................................... 12
     3.1        How to nominate as a candidate .............................................................................................. 12
     3.2        No disqualified persons ............................................................................................................ 12
     3.3        Timing and term of appointment ............................................................................................. 12
     3.4        New Director’s induction .......................................................................................................... 12
4.   Governance of the Trustee, EFHPL and the Fund ................................................................................... 12
     4.1        Board and Committee structure ............................................................................................... 13
     4.2        Board Committees .................................................................................................................... 13
     4.3        Board meetings ......................................................................................................................... 15
5.   General Information ............................................................................................................................... 16
     5.1        Provision of information to Directors ....................................................................................... 16
     5.2        Circular Resolutions and additional meetings .......................................................................... 16
     5.3        Directors’ training and involvement in the industry ................................................................. 16
     5.4        Director Remuneration ............................................................................................................. 16
     5.5        Commitment ............................................................................................................................. 17
6.   Directors' protections ............................................................................................................................. 18
     6.1        Protection from direction ......................................................................................................... 18
     6.2        Protection from external pressure ........................................................................................... 18
     6.3        Right to seek advice .................................................................................................................. 18
7.   Directors' potential liabilities and indemnities ....................................................................................... 19
8.   Further information................................................................................................................................ 19
                Appendix 1: Timeline of major events for Equip ...................................................................... 20
                Appendix 2: Board and Committee dates - 2019...................................................................... 21

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1. Background
1.1 About Superannuation
The superannuation system is designed to provide for the retirement needs of Australians and allow
individuals to plan for retirement. Superannuation has broad coverage amongst Australia's working
population. It is compulsory for most employers to contribute a basic level of super (Superannuation
Guarantee), while some industrial Awards and Agreement prescribe minimum levels of super to be
paid, as well as mandating where those contributions should be paid. To encourage saving for
retirement, the Government also provides tax incentives to contribute to superannuation. Money
accumulating in a super fund is generally locked away until retirement. It can generally only
otherwise be accessed in the event of permanent or temporary disablement, financial hardship,
death or terminal illness.

1.2 Equipsuper Superannuation Fund
The Equipsuper Superannuation Fund (Fund) is a profit for member superannuation fund, which has
approximately $15.2 billion in assets and 74,300 members across a range of industries throughout
Australia. From its beginnings in 1931 as the pension scheme for the former State Electricity
Commission of Victoria (SECV), it has a long history of providing defined benefit and accumulation
superannuation and pension benefits. Appendix 1 provides a brief history of the Fund.
The Fund exists with the aim of providing members with adequate income in retirement, with
Equipsuper Pty Ltd as the trustee for the Fund (Trustee or Company). It continues to provide both
defined contribution (accumulation) and defined benefits, as well as pensions. In the former,
members and their employers contribute money which is invested in accordance with the member's
chosen investment strategy. Any gains or losses in investment earnings are borne by the member.
With defined benefits, the end-benefit a member receives on retirement is calculated according to a
formula which comprises the product of a member's final average salary, years of service and a
benefit multiple.
Regardless of the benefit type, contributions made by or on behalf of members are invested in
accordance with an investment strategy adopted by the Trustee, which is regularly reviewed. The
Fund is constituted as a trust, which means the laws governing trustees, together with discreet laws
covering superannuation as well as many other areas including, privacy, data, anti-money
laundering, corporations and tax, apply to the operation of the Fund and the role of the trustee.
While many of its members are employees for whom an employer sponsor is paying contributions
(known as employer-sponsored members), the Fund is also able to accept contributions for
employees who have ceased employment with their sponsoring employer, but who choose to remain
with the Fund (known as retained members). The Fund also permits members to join without an
employer-sponsor (known as personal members). In other words, the Fund is a multi-employer-
sponsored public offer superannuation fund.
Equipsuper is at the forefront of evaluating changing member demands and differentiating the Fund
as a premier provider of member support, education and advice, as well as superannuation and
pension products. Key elements of Equipsuper are listed below.
            Members and employers come from a wide range of industries, including the Fund's
             traditional base in the power, water and infrastructure sectors, but also extending to
             manufacturing, mining, science, health and allied services and professional services.
            The Fund has approximately 7,000 employers who contribute to the Fund for the
             benefit of their employees. Approximately 65 employers maintain defined benefit
             plans. Defined benefit members make up approximately 15% of the Fund's assets.

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   Key member and employer services, including dedicated member and employer
             relations staff are provided by the Trustee office. Specialist services are outsourced to
             specialist providers, including for fund administration (Mercer), group insurance
             (Hannover and MLC Life Insurance), asset consulting (Jana) and custody (National
             Australia Bank).
            Financial Advice is a core part of our client offering, with Equipsuper Financial Planning
             Pty Ltd (a separate company wholly owned by Equipsuper Financial Holdings Pty Ltd)
             providing specialist financial planning services, principally to Fund members and their
             families, from offices in Melbourne, Traralgon in the LaTrobe Valley in Victoria,
             Brisbane, Perth and Sydney. Our financial planners work closely with Trustee office
             staff to provide member education and advice services, and to support ongoing
             product development and planning for member needs.
            The Trustee office maintains a specialist internal investments team which oversees the
             Fund's investments and manages the outsourced investment managers that invest
             money on behalf of the Fund.

1.3 Equipsuper Pty Ltd - the trustee of the Equipsuper
The Trustee as a corporate entity, was established in 1988 to become the trustee of the Fund which
was previously administered by the SECV. The Trustee's role is to act as trustee of the Fund. The
Trustee has a licence authorisation from the Australia Prudential Regulation Authority (APRA) to
enable it to act as trustee for other superannuation funds. In the future it may become the trustee of
additional funds.
The Fund operates on a profit for member basis, and therefore the Trustee is not operated to
generate or pay a profit to its shareholders. As a corporate entity, it retains only the level of net
assets required to meet regulatory requirements and ensure that it is able to fulfil its role as a
trustee. All of the shares in the Company are held by Equipsuper Financial Holdings Pty Ltd (EFHPL).
The shares in EFH are held by the Chairman on trust for the benefit of employers who contribute to
the Fund. Under the terms of this trust, the Chair must consult with, and obtain a "majority
direction" from employers before exercising key shareholder rights, such as dealing with the shares
held and voting on changes to the company's constitution.

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Equip's current corporate structure is summarised in the following diagram:

                                            Shareholder:
                                                Chair
                                             (on trust for
                                             Employers)

                                       Equipsuper Financial
                                         Holdings Pty Ltd

                                                                              Equipsuper Asset
   Equipsuper Pty Ltd                  Equipsuper Financial                     Management
                                         Planning Pty Ltd
                                                                                   Pty Ltd

     Equipsuper
 Superannuation Fund

1.4 Trust law and the regulatory environment
Regulated superannuation funds are required to be established as trusts. A trust is an arrangement
where assets are held legally by one entity (trustee) on behalf of another (beneficiaries or members).
Trustees are fiduciaries and must discharge their duties in the best interest of members, in
accordance with general and statutory trust law. The fundamental duties of a trustee are to:
    •   be familiar with the terms of the trust (which means understanding the operation of the
        trust deed and the other constituent documents that govern the operation of the Fund);
    •   not profit from their role as trustee (this does not mean that Directors are prohibited from
        being remunerated if the trust deed permits, but it does mean that Directors cannot use
        their position as a trustee to their advantage at the expense of members);
    •   administer the Fund in the best interest of members (this means that members interests
        are paramount in the administration of the Fund);
    •   act impartially between beneficiaries (this means that there must be even handedness in
        decisions impacting members that belong to different divisions within the Fund);
    •   act prudently particularly regarding the investments of the Fund (as someone responsible
        for the financial outcome of another person, this means that a degree of care and diligence
        needs to be exercised when managing the Fund, selecting and monitoring the appointment
        of investments, investment managers and other service providers);
    •   give personal attention to the office of the trustee and only delegate the trustee's powers
        and duties if permitted by the Trust Deed or legislation (this means that unless permitted to
        be delegated to Management or a Committee of the Board, through an "instrument of
        delegation", the decisions of the Trustee must be made by the Board);
    •   keep account and provide information to beneficiaries (the accounts of the Fund and of the
        Company must be properly maintained and audited. Information must be maintained in a
        form that can enable beneficiaries/members to understand their entitlements within the

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Fund).
Additional duties are imposed on trustees of superannuation funds which are contained primarily
within the Superannuation Industry (Supervision) (SIS) Act and the Corporations Act. Under the
Corporations Act and SIS Act, the Trustee is regulated and required to hold licences issued by APRA
and the Australian Securities and Investments Commission (ASIC). The licences and laws under which
the Trustee operates impose specific obligations on the Company as trustee of the Fund and on
Directors personally. Broadly speaking, APRA's role in relation to the Trustee relates to prudential
supervision. ASIC's role relates to corporations law, product information, licensing and disclosure.
The Trustee is required to comply with a range of Prudential Standards issued by APRA. These
Prudential Standards relate to APRA's prudential supervision of specific areas of the management of
the Fund, and have the force of law. Areas covered by the Prudential Standards include:
Governance; Investment Governance; Risk Management; Fit and Proper; Conflicts of Interest;
Adequacy of Resources; Outsourcing; Audit; Operational Risk Financial Requirement; Insurance in
Superannuation; Business Continuity Management and Defined Benefit Matters. There are also
Prudential Standards relating to the reporting of information to APRA. APRA also issues Prudential
Practice Guides which provide further detail on APRA's requirements and expectations under the
Prudential Standards.
The other main pieces of legislation with impact on the operation of the Fund and the Trustee are:
           The Income Tax Assessment Acts 1936 and 1997;
           Superannuation Guarantee (Administration) Act 1992;
           Superannuation (Resolution of Complaints) Act 1993;1
           Privacy Act 1988 and the Australian Privacy Principles;
           Anti-Money Laundering and Counter-Terrorism Financing Act 2006;
           Family law legislation (as it relates to separating couples and the division of super);
           Australian Securities and Investments Commission Act 2001;
           Anti-discrimination legislation.

1.5 The Board
The Equipsuper Financial Holdings Pty Ltd (EFHPL) and Equipsuper Pty Ltd (Trustee) Boards must be
identical and are currently structured to comprise of:
           Three Member Directors nominated by Fund members;
           Three Employer Directors elected by Fund employers; and
           Three Independent Directors appointed by the Board. One of these
Independent Directors acts as Chair of the Board.
This structure satisfies the current "equal representation" requirements of SIS, which are
intended to ensure that there is equal representation of employer and member interests on the
Board. It is, however, important for all Directors to be aware that they are not appointed by, or to
represent, any specific constituency or interest group. Rather, the role of the Director is to act in
the best interests of the members as a whole. All Directors must exercise impartial and objective
judgement and treat all members of the Fund equally and fairly, having regard to all
circumstances relevant to a particular matter.

                         1
                          This legislation governs the creation and operation of a statutory external dispute
                         resolution body known as the Superannuation Complaints Tribunal (SCT). Legislation
                         has recently been passed which will see the replacement of the SCT with the
                         Australian Financial Complains Authority (AFCA). AFCA is due to be established on 1
                         July 2018.

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Following the merger with the Rio Tinto Staff Superannuation Fund on 1 July 2017, Rio Tinto has the
right to appoint one Employer Director to the Equip Board. Selection and appointment of the other
two Employer Directors is based on an employer vote conducted by an independent external
organisation.

2. The role of a Director
2.1 The role of Directors
The role of Directors generally is to provide strategic direction to the Company, and to monitor and
oversee the operational management of the Company. This includes responsibility for the
appointment of the Chief Executive Officer, and the establishment and oversight of ongoing risk,
governance and financial management systems.

2.2 Duties of Directors
If you become a Director of the Company and EFHPL, you will have obligations that arise under
general law, legislation including the Corporations Act and SIS, the Company’s licences, the Company
and EFHPL constitutions, and the Fund's Trust Deed which contains the Rules of the Fund. All new
Directors are expected to have an understanding of the general duties and legal requirements of
Directors when they join the Board. This information is not intended as a definitive explanation of a
Director's role, but only to highlight key elements that are most relevant to a potential new Director
to consider.
In addition to the general duties and obligations that apply to all company Directors, SIS imposes
specific obligations on the Directors of a company that is the trustee of a regulated superannuation
fund. These duties are specified as covenants which are deemed to be included in the governing
rules of the relevant superannuation fund.3 They include obligations to:
           Act honestly in all matters concerning the Fund;
           Exercise the same degree of care, skill and diligence as a prudent superannuation fund
            Director would exercise in relation to a fund where the person is a Director of the
            trustee of that fund, and the trustee makes investments on behalf of the fund's
            beneficiaries;
           Perform the Director's duties and exercise the Director's powers as a Director of the
            corporate trustee of the fund in the best interests of the fund's beneficiaries;
           Where there is a conflict between: (i) the Director's duties to beneficiaries of the fund
            or the interests of fund members and (ii) the Director's duties to any other person or
            their own interests or the interests of the trustee, or any associate of the Director or the
            trustee, the Director must give priority to the interests of beneficiaries, ensure that the
            interests of beneficiaries are met despite the conflict and are not adversely affected by
            the conflict, and comply with the relevant APRA Prudential Standard regarding conflicts
            management; and
           Not enter into any contract or do anything else which would prevent the Director or the
            trustee company from, or hinder the Director or trustee company in, properly
            performing or exercising the Director's or company's functions and powers.

                        2
                          The legislation was introduced into the Senate on 14 September 2017 and has been
                        referred off to a Committee.
                        3
                          Refer in particular to SIS section 52A

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SIS also imposes specific obligations or covenants on the trustee of a regulated superannuation
fund4. Directors are subject to an additional obligation to exercise a reasonable degree of care and
diligence for the purposes of ensuring that the trustee company carries out those obligations and
covenants. The covenants attaching to Directors are personal obligations deemed to be made by
each Director as if they were a party to the governing rules, and accompanied by a statutory right for
members of the Fund to sue a Director for losses arising from a breach of a covenant. The result is
that Directors have a direct and personal liability to members for any breach of the covenants and
may be joined individually in proceedings against the Company, subject to the plaintiff obtaining the
leave of the Court. Trustee Directors must therefore take particular care to ensure that they can
devote the required level of care, skill and diligence in the discharge of their duties.
Some of the specific obligations of the Trustee, which the directors must ensure are carried
out, include to:5
           Formulate, review regularly and give effect to an investment strategy for the whole of
            the Fund and for each investment option, having regard to a number of factors, which
            include the risk and likely return from the investments, the Trustee's objectives and
            strategy and the expected cash flow requirements, composition of investments, liquidity,
            tax consequences and costs;
           Formulate, review regularly and give effect to an insurance strategy for the benefit of
            beneficiaries of the Fund, which includes addressing the kinds and levels of insurance to
            be offered and the basis for the decision to offer that kind and level of insurance, having
            regard to the demographic of Fund members and the method by which insurance is to
            be offered;
           Consider the cost to all beneficiaries of offering insurance of a particular kind or at a
            particular level and offer it only if the cost will not inappropriately erode the
            retirement income of beneficiaries;
           Do everything that is reasonable to pursue an insurance claim for the benefit of a
            beneficiary if the claim has a reasonable prospect for success;
           Formulate, review regularly and give effect to a risk management strategy that relates
            to relevant activities or proposed activities of the Trustee and the risks that arise in
            operating the Fund; and
           Maintain and manage financial resources to cover the operational risk that relates to
            the Fund in accordance with relevant prudential standards.

2.3 Director skills, competencies and attributes
Competency Statements specifying both mandatory eligibility criteria, including minimum levels of
qualifications, education or experience, and the desired skills and competencies for Director
candidate appointments is provided in the Competency Statements. The mandatory eligibility
criteria must be met by all candidates.
Of course, each Director cannot be an expert in all matters that are considered by the Board, and all
Directors will bring different backgrounds and expertise to their role. The Trustee is seeking to
encourage diversity of thought and background among Directors, who will ideally come from a
broad range of professional and personal backgrounds.
However, there are core skills and knowledge which all Directors must have, and it is useful for any
person considering becoming a Director to think about the qualities, knowledge and characteristics
that will be needed for them to perform their role effectively.

                        4
                            Refer generally to SIS section 52
                        5
                            Refer in particular to SIS sections 52(6), (7) and (8)

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APRA requires those in positions of responsibility for a superannuation fund (responsible persons,
which includes Directors) to be "fit & proper". The following table provides a summary of what may
generally be regarded as the necessary attributes of a Director of the Trustee and EFHPL, to meet
APRA's fit and proper requirements.6 This list may help you to consider whether you are suited to,
and wish to undertake, the role of a Director.

  Attributes                 Comments

  Integrity                  The Company acts as trustee of a regulated superannuation fund and is
                             responsible for the investment and management of members'
                             retirement savings.
                             Directors should therefore be persons of proven integrity and the
                             highest ethical character, and share the Trustee's values.
  Reputation                 Directors should have a reputation, both personal and professional,
                             which is consistent with, and will help uphold, the image and reputation
                             of the Company and the Fund.
  Judgement                  Directors must have the ability to exercise sound business judgement on
                             a broad range of issues.
                             They should be innovative, and be able to "think outside the box".
  Independence               Directors must exercise independent judgment in determining matters
                             affecting the Fund and the Company, having regard to the overall
                             interests of Fund members. In any situation of a conflict of interests
                             Directors must not put their own interests ahead of the interests of
                             Members or the Company.
  Confidentiality            Directors will become aware of considerable information in relation to
                             the Fund, its members and contributing employers and its strategic
                             direction, which is highly confidential. Directors must not disclose or
                             use any confidential information received in their role as a Director
                             other than properly for the Fund’s purposes.
                             This means that Directors must not talk about any confidential
                             information inappropriately (including, for example, to their family) and
                             must be careful that any material they have in relation to the Fund, such
                             as Board and Committee papers and email correspondence, is kept
                             securely.
  Focus on strategic         A key role of Directors is to set and oversee the strategic direction of the
  direction                  Fund. It is important that Directors are people who can see the big
                             picture, and contribute to the development of a vision and strategy for
                             Equip's future, as well as maintaining Board level oversight of the Fund.

                       6
                           Also refer to the Trustee's Board Appointment and Renewal Policy.

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Financial literacy and   While the Board needs a range of skills among Directors, all Directors
ability to understand    are responsible for reviewing and approving the financial reports for
investments              both the Trustee, EFHPL and the Fund each year, and must be able to
                         read, understand and discuss financial reports and management. All
                         Directors must be able to understand and contribute to the oversight of
                         the Company's and EFHPL's financial and business control systems.
                         Equip also operates in a highly regulated and competitive industry, and
                         managing financial resources appropriately is critical to business
                         success.
                         Directors also need to be able to understand matters connected with
                         the investment of the Fund's assets.
Ability to understand    Directors need to understand information and issues relating to all
and assimilate           aspects of the structure and operation of the Fund, including the
information              strategic positioning and development of the Fund, financial and
                         investment issues and legal matters.
                         Detailed information in relation to the Fund and matters to be
                         considered by the Board is provided prior to all Board meetings.
                         Specific, and often quite technical, information on particular topics is
                         also provided to the various Board Committees. Directors need to be
                         able to read and assimilate this information and participate in the Board
                         and Committee decision making. While Directors may, of course, ask
                         questions or seek further information from the Company’s
                         Management, persons who have not had experience in assimilating a
                         large volume of complex information from written material, or who may
                         not have the time to do so, are likely to find this aspect of fulfilling the
                         role of Director difficult.
Ability to contribute    The Board works as a team, so Directors are expected to be team
effectively to Board     players and contribute effectively to the Board and Committee
and Committee            discussions and deliberative processes.
meetings
Commitment               Directors must be able and willing to devote the necessary amount of
                         time to Equip's affairs. This includes the time to prepare for, as well as
                         attend Board and Committee meetings, read information provided by
                         the Company's Management and EFHPL and attend compulsory training.
                         Directors who are over-committed with other roles and activities will
                         find it hard to allocate sufficient time to be able to undertake their role
                         effectively.
                         In considering the likely time requirements, please note that most Board
                         and Committee meetings are held at the Trustee's office in Collins
                         Street, Melbourne.

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3. Director Candidate Process
3.1 How to nominate as a candidate
The Nomination Form and nomination instructions specifying the information candidates are
required to provide with their nomination are included on the website.
Candidates should note that all candidates for a Member Director position must:
           Be aged 18 and over;
           Have been a member of the Fund for 90 days or more, at the time of nomination; and
           Meet the minimum education, qualifications and experience criteria stated in the
            Competency Statement.

3.2 No disqualified persons
A disqualified person is not eligible to be a Director of a superannuation fund.7 This means that a
person considering nominating for a position as a Director on the Trustee Board must not:
           Have ever been convicted of dishonest conduct (e.g. theft);
           Be an insolvent under administration (e.g. an undischarged bankrupt);
           Have been subject to a civil penalty order (which is a special kind of penalty that can be
            imposed under the SIS legislation); and
           Have been disqualified by the regulatory (APRA) or a court.

3.3 Timing and term of appointment
The successful candidates are expected to be determined by the Board on 28 March 2019.
It is expected that the successful candidates' term of office will commence on 1 April 2019
and, subject to early termination or extension, run to 31 March 2023.
Candidates should note, however, that under the Company and EFHPL constitutions, the Board has
the power to extend or shorten Directors' terms of office, which could allow an earlier or later end to
the successful candidate's term.

3.4 New Director’s induction
The successful candidate will be provided with an induction program, including:
           A written information package of key Fund documents such as the Fund Rules, the
            Company constitutions and relevant Company policies;
           Personal briefings with key Management personnel; and
           Access to specialist trustee training programs (if required).

4. Governance of the Trustee, EFHPL and the Fund
The Trustee and EFHPL has pride in maintaining a strong governance framework to protect members'
interests and underpin the success of the Fund. A copy of Equip's Governance Framework is available
on request.

                        7
                         It is an offence for the person and also an offence for the company if the trustee
                        knows or has reasonable grounds to suspect that any of its responsible officers is a
                        disqualified person.

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4.1 Board and Committee structure
As noted above, the Trustee and EFHPL Boards are structured to meet the SIS equal representation
requirements, ensuring that both employer and member interests are represented on the Board.
Also, in accordance with SIS and the Company's Constitution, all Board decisions must be made by
a two-third majority of Directors.
The Board operates under a formal Charter which is approved by the Board, and a position
description is maintained for the position of the Chair.
The Board's key responsibilities include:
    •   Making reasonable and informed decisions in a timely manner in the best interests
        of beneficiaries (and which consider the impact of its decision on beneficiaries);
    •   Approving, reviewing and monitoring the business plan which sets out the strategic
        direction of the Fund and the annual operating budget;
    •   Ensuring that appropriate risk, compliance and financial control systems are in place and
        operating effectively;
    •   Appointing and reviewing the performance of the Chief Executive Officer;
    •   Approving the Remuneration Policy for the Trustee;
    •   Ensuring appropriate resources are available for the due administration of the Fund;
    •   Reviewing and approving Equip’s significant frameworks and policies;
    •   Effective oversight of the framework for identifying and managing risk and the approval of
        the Risk Management Framework; and
    •   The formulation and implementation of an investment strategy for the whole of the
        Fund, and overseeing the proper investment of Fund assets.
Some of these discreet responsibilities have been delegated to Board Committees. However, the
Board retains oversight and accountability for ensuring these matters are addressed and managed in
a proper way.

4.2 Board Committees
The Company currently has five standing Committees which have delegated responsibility from the
Board to deal with certain matters. These Committees are:
           Investment Committee;
           Growth and Development Committee;
           Audit, Risk and Compliance Committee;
           Member and Employer Engagement Committee; and
           Governance and Rewards Committee.
Additional committees may be established on an ad hoc basis for particular purposes. For the
purpose of Board appointments, a Nominations Committee will be established to review applications
and provide a recommendation as to the suitable candidate(s) to the Board.
Each standing Committee operates under a Charter approved by the Board, and reports regularly
to the Board. Minutes of Committee meetings are made available to all Directors.
The specific composition of each Committee is determined by the Board Chair in consultation with
individual Directors and the Board generally, having regard to the particular skills and expertise of
Directors. Management representatives or external consultants with specific expertise may be
members of some Committees.
Committee composition is generally reviewed annually.
All Directors may attend any meeting of any Committee, although if a Director is not a member of
that Committee, he or she does so as an observer. New Directors are encouraged to attend

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meetings of the Committees of which they are not a part of, to familiarise themselves with the
Committee’s functions and operations.
The five current standing Committees are outlined below.

4.2.1 Investment Committee
The Investment Committee makes recommendations to the Board regarding the Fund's investment
strategy and oversees the investment of the Fund’s assets. It generally meets six times per year. The
Investment Committee is comprised of four Directors and, under its Charter, may include external
consultants. The Board has appointed an external investment specialist as a consultant to the Committee.

4.2.2 Growth and Development Committee
The Growth and Development Committee oversees Management’s recommendations to the Board in
relation to material strategic opportunities to grow the size of the Fund to increase net benefits to members
through increased scale and increased security with diversity of membership. It generally meets four times
per year. The Committee is comprised of three Directors.

4.2.3 Audit, Risk and Compliance Committee
The Audit, Risk and Compliance Committee oversees the Group's risk, compliance and internal control
frameworks, including the activities of the internal and external auditors. It also reviews the financial
reports for the Company and the Fund prior to submission to the Board. The Audit, Risk and Compliance
Committee is comprised of four Directors.
On 1 July 2019, the ARCC’s duties will be separated to establish a separate Risk Committee and an Audit
and Compliance Committee.

4.2.4 Member and Employer Engagement Committee
The objective of the Member and Employer Engagement Committee is to assist the Board to effectively
discharge its responsibilities to Fund members and beneficiaries in overseeing:
•       the major strategies for the delivery of the overall member and employer experience, including
        products, services and benefits to Fund members and employers, in support of the Strategic Plan;
•       the performance and services provided by the Fund Administrator and Group Life Insurer(s); and
•       the management and determination of members’ claims for death and disablement benefits and
        any complaints arising from those claims.
The Committee is comprised of four directors. The Committee is scheduled to meet four times a year.

4.2.5 Governance and Rewards Committee
The Governance and Rewards Committee generally meets quarterly and is responsible for oversight of
governance and remuneration matters including the performance and remuneration of the Chief Executive
Officer, the Equip Group's Remuneration Policy and overall remuneration structure. The Committee also
reviews all governance policies and structures. It may act as a Nomination Committee for the appointment
of the Independent Chair.
The Governance and Rewards Committee is comprised of five directors.

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4.3 Board meetings
4.3.1 Number and timing of meetings
There are usually at least six Board meetings each year, although additional meetings are held as
required for the proper conduct of the Trustee Company’s business. These include four quarterly
meetings, one meeting specifically addressing the annual financial statements, and at least one
meeting focussing on strategy review.
The current schedule of meetings for 2019 is included at Appendix 2. This schedule may be subject
to change, and does not necessarily include all Board and Committee meetings which will occur
during the year.
Board meetings (other than the Strategy Day) are generally held at Equip’s offices at Level 12, 330
Collins Street, Melbourne. Where necessary, Directors may attend the meeting by phone, however,
personal attendance is required wherever possible.

4.3.2 Meeting Agenda and Papers
All Board meetings follow a formal agenda which is prepared by the Executive Officer - Governance
and Risk and is approved by the Chair. Written papers on the matters to be brought to the Board
are generally circulated one week prior to the meeting.
If a Director has any questions regarding the papers prior to the meeting, they are requested to
contact the Chief Executive Officer, the responsible Executive Officer or the Executive Officer -
Governance and Risk.

4.3.3 Confidentiality
All Board and Committee Papers and other information received as a Director is confidential.
Directors must also respect and comply with the law in relation to the privacy of member and
employer information, to:
           Protect the commercial position of the Trustee (and hence the value of members’
            benefits);
           Respect members’ and employers’ privacy or commercial interests (the Company
            is subject to the Australian Privacy Principles); and
           Prevent premature release of information that may affect investment markets.

4.3.4 Minutes
The Executive Officer - Governance and Risk is responsible for keeping minutes of Board and
Committee meetings. The usual procedure is for draft minutes to be reviewed by the Chair of the
relevant meeting. Final draft minutes are then generally presented for approval at the next Board or
Committee meeting.

4.3.5 Attendance at meetings
It is not always possible for every Director to attend every meeting. Where a Director cannot
attend in person (for example, because they are ill or overseas), they are encouraged to attend
by teleconference if possible.
If a Director cannot attend a meeting in person or by phone, he or she is asked to advise the Chair or the
Executive Officer - Governance and Risk in advance of the meeting.
Equip does not allow the use of Alternate Directors. There is no ability for a Director to appoint a "proxy"
or representative to attend meetings on their behalf.
Directors who cannot attend a meeting are also asked, as far as possible, to read the papers for the
meeting and advise the Chair, another Director, the Chief Executive Officer or Executive Officer -
Governance and Risk of any issues they wish to raise in relation to matters to be presented to the
meeting, to ensure their views can be taken into account.

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In exceptional circumstances, Directors can request the Board to grant a leave of absence for up to three
months. Any further extension is subject to review by the Board.

5. General Information
5.1 Provision of information to Directors
Most information required by Directors will be provided through the formal papers for Board and
Committee meetings. All Board and Committee books are provided electronically via Diligent.
Information is also provided on matters that arise between formal meetings or which are of general
interest, such as investment performance reports and statistics, regulatory changes or significant
developments in the industry.
Directors will be provided an Equip email address, and this information is usually circulated by
email. Directors are also provided with copies of bulletins and information sent generally to Fund
members and employers.

5.2 Circular Resolutions and additional meetings
Important and urgent matters may arise between the scheduled Board meetings that require Board
approval.
When this occurs, if the matter is unlikely to require significant discussion, it will usually be dealt with
by Circular Resolution (a written resolution which is signed by all Directors). Where this is required,
the written resolution will be circulated by the Executive Officer - Governance and Risk with an
explanatory paper. Directors are asked to sign, date and return the resolution (or provide comments
on it) within a specified time.
Where an urgent matter is likely to require Board discussion, an additional Board meeting may be
called, sometimes at short notice. Every effort is made to minimise the number of additional
meetings, and where they are required, to hold them at times convenient to the majority of
Directors.

5.3 Directors’ training and involvement in the industry
All Directors are encouraged to improve and maintain their skills and education on matters relevant
to their role as a Director. Equip's Fit and Proper Policy (a copy of which is included in the
Information Kit) requires Directors to undertake a minimum of 30 hours training or self-education
per year. Directors are required to provide quarterly reports of the training and education
undertaken.
Where a Director undertakes ongoing education for other professional qualifications it may be
included for these purposes, if relevant to the Director's role at Equip.
Directors are also encouraged to participate in appropriate industry groups and forums, both to
expand their own skills and to represent the Fund.
The Company’s annual budget includes an allowance for Directors’ training and attendance at
conferences. To ensure the appropriate allocation of resources, the training program and individual
attendance at training courses and conferences may be approved by the Chair.

5.4 Director Remuneration
All Directors (other than the Chair) are paid a base annual remuneration, with an additional
allowance paid to the Chair of each Committee. The Chair is remunerated at a different rate to other
Directors. Directors are also reimbursed for reasonable out of pocket expenses. The Trustee pays
travel and accommodation costs for attendance at meetings in Melbourne, for those Directors living

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outside Melbourne. The total pool for Directors' remuneration is approved by the Fund's employers,
as the ultimate shareholders.

5.5 Commitment
Most scheduled activities involving Directors, including Board and Committee meetings, will take
place during normal business hours. Some Board training and Directors' dinners occur outside
business hours. However, as a Director you will also need to spend additional personal time on the
Company’s affairs, including time preparing for meetings, considering information provided and
attending training. This may be difficult for persons who already have other significant roles and
commitments, and it is very important that prospective Directors understand the time requirements
for effectively performing their role.
The following table indicates the general time commitment required for all Equip's Directors:

                                            Summary of expected time commitments (based on
                                                         usual Board activities)
 On becoming a Director of the           One to two day induction program, plus specific trustee
 Company for the first time              training courses run by ASFA or AIST if required.
 (depending on the Director’s            Briefings and time required for initial familiarisation with
 personal experience and                 the Fund and Companies, including reviewing the
 background).                            Induction Package, Company Policies and other important
                                         information.
                                         Any Director who has not already completed the AICD
                                         Company Directors' course or the AIST Trustee Directors
                                         Pathways courses is encouraged to undertake one of
                                         these courses.
 Board meetings                          Four quarterly meetings a year, each lasting almost a full
 (The reading times quoted will          day.
 depend on the complexity of the         Directors' training or workshops, and a Board dinner are
 matters to be considered and the        usually held in the afternoon and evening of the day prior
 length of papers.)                      to the quarterly Board meeting. An additional "breakfast"
                                         training program is also provided during the year.
                                         One additional board meeting per year taking around
                                         three to four hours for consideration of the annual
                                         financial statements.
                                         At least one full day meeting each year reviewing the
                                         Fund's strategy.
                                         Additional meetings as required on an ad hoc basis,
                                         usually of two to four 4 hours duration. In recent years, at
                                         least two additional meetings have been held in each year.
                                         Reading time and pre-meeting preparation: two to five
                                         hours per meeting.
 Committee meetings – the time           Investment Committee:
 commitment depends on the               Six meetings per year taking around three to four hours,
 Committee. Each Board member            plus pre- meeting preparation. Detailed consideration of
 other than the Chair is on two or       financial reports is required.
 three Committees.

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The Chair of each Committee will
                                          Growth and Development Committee:
 also need to undertake additional
 work considering meeting agenda          Generally, four meetings per year, which may take one to
 and minutes, and in some areas           three hours per meeting, plus pre-meeting preparation.
 working with Management or the
 Board Chair between meetings.            Audit, Risk and Compliance Committee:
                                          Four to six meetings per year each of approximately two
                                          to three hours, plus pre-meeting preparation.

                                          Member and Employer Engagement Committee:
                                          Four to five meetings per year each of approximately two
                                          to three hours. Papers for these meetings often include
                                          lengthy reports on claims to be decided by the
                                          Committee, which may include medical reports and
                                          background information. Pre- meeting preparation time is
                                          estimated at a minimum of two hours.

                                          Governance & Rewards Committee:
                                          Generally four meetings per year each of approximately
                                          three to four hours duration. Pre-meeting preparation
                                          time will depend on the nature and complexity of the
                                          meeting agenda.
                                          Governance policy documents and strategic direction may
                                          require detailed consideration prior to the meeting.
 On-going training                        A minimum of 30 hours of training or self-education per
                                          year (as currently specified in the Fit and Proper Policy).

6. Directors' protections
The SIS legislation aims to ensure that trustees are in control of the fund and have the legal capacity
and power to fulfil their duties properly. Three specific protections and rights are contained within
SIS.

6.1 Protection from direction
Trustees must not be subject to direction by others, except in limited circumstances (e.g. binding
death benefit nominations, direction by members in relation to selection of investment options,
directions from the regulator or a court). Discretions conferred on trustees under the governing rules
of the fund they administer cannot be exercised by anyone other than the trustee without the
consent of the trustee, and amendments to the governing rules cannot be made by anyone other
than the trustee without the consent of the trustee. Employers generally have limited ability to give
trustees directions (unless the direction relates to admission of new employees, the creation of new
membership categories and voluntary employer contributions).

6.2 Protection from external pressure
There are anti-victimisation provisions in SIS which are designed to protect trustees against pressure
from employers to make decisions which are contrary to the best interests of members.

6.3 Right to seek advice
Trustees have the right to seek professional advice on any aspect of their trustee responsibilities and

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duties and to have this advice paid for by the Fund.

7. Directors' potential liabilities and indemnities
It is important that all potential Directors are aware that they are responsible and, in some instances,
can be held personally liable for the operation and management of the Company, EFHPL and the
Fund.
There are prohibitions on misleading and deceptive behaviour/statements which are contained in
the Australian Securities and Investments Commission Act 2001 and the Corporations Act 2001.
Directors can be liable for misleading and deceptive statements in disclosure materials, so it is
important to ensure that promotional or regulatory disclosures do not contain information or
statements that are false or misleading.
However, some protection is provided for Directors in relation to such liability:
           As permitted under SIS, the Trust Deed for the Fund provides that “The Trustee and each
            director of the Trustee is exempted from liability, and is to be indemnified out of the
            Fund, in respect of any cost, loss, damage, claim or liability caused or incurred in any
            manner (including without limitation negligence) in connection with the office of Trustee
            or director to the maximum extent permissible under the Relevant Law...”.
           In addition, Article 104.1 of the Company's constitution and Rule 10 of EFHPL's
            constitution provides that “every director of the Company shall be entitled to be
            indemnified out of the assets of the Company against all losses or liabilities which he or
            she may sustain or incur in or about the execution of his or her office or otherwise in
            relation thereto”. This entitlement is provided through a Deed of Indemnity and Access. The
            indemnity applies during the period of a Director’s appointment and for a further seven
            years. The Deed also provides Directors with access to Board papers for the same period. A
            copy of the pro forma Deed of Access and Indemnity can be provided on request.
           The Company also maintains insurance policies for Professional Indemnity and Crime,
            and Director’s and Officer’s Liability to protect Directors, Management and the Fund to
            the extent it is legally permissible to do so.
           Directors are also entitled to obtain legal advice where appropriate at the Company’s
            expense.

8. Further information
Further information in relation to Equip is available from our website: www.equipsuper.com.au.
If you would like any further information in relation to the role of a Director of Equip, the Fund or the
Director appointment process, please email csecretariat@equipsuper.com.au .

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Appendix 1: Timeline of major events for Equip

 Date                  Event
 15 April 1931         Establishment of the Provident Fund of the State Electricity Commission
                       of Victoria (SECV).
 1988                  Incorporation of trustee (originally called SECV Superannuation Pty Ltd).
 14 December 1993      SECV Superannuation Fund became the Victorian Electricity Industry
                       (VEI) Superannuation Fund following the passage of the Electricity
                       Industry Act.
 26 July 1994          Trustee changed its name to VEI Super Pty Ltd.
 25 June 1996          VEI Superannuation Fund elected to become a regulated
                       superannuation fund under the Superannuation Industry (Supervision)
                       Act.
 1 July 1997           Gas and Fuel Superannuation Fund merged with the VEI
                       Superannuation Fund to form the Victorian Energy Industry
                       Superannuation Fund following the passage of the Gas Industry Act.
 30 November 1998      VEI Super Pty Ltd changed its name to Equipsuper Pty Ltd.
 1 December 1998       The Victorian Energy Industry Superannuation Fund changed its name to
                       Equipsuper.
 31 March 1999         Successor Fund Deed signed to merge the Water Industry
                       Superannuation Fund with Equipsuper with effect from 1 April 1999.
 10 March 2004         Equipsuper Pty Ltd granted Australian Financial Services Licence (AFSL) by
                       ASIC.
 1 July 2005           Equipsuper Pty Ltd granted RSE Licence (public offer class) by APRA.
 5 September 2005      Equipsuper Superannuation Fund registered as a Registrable
                       Superannuation Entity with APRA, allowing it to operate as a public offer
                       Fund.
 19 March 2007         Establishment of Equipsuper Financial Planning Pty Ltd.
 15 April 2011         Equipsuper celebrates 80 years of service to members.
 June 2012             Equipsuper endorses a strategic growth plan.
 December 2012         Equipsuper rebrands as "Equip" and adopts the new "Equip" logo.
 March - October       Equip obtains its MySuper licence authorisation in March 2013. The
 2013                  MySuper product becomes available from August 2013 and existing
                       member balances are transferred to Equip MySuper in October 2013.
 July 2014             Launch of Equip MyPension
                       Equipsuper Financial Planning Pty Ltd commences operation under its
                       own Australian Financial Services Licence.
 November 2014         Equip announces a partnership with AustralianSuper as its defined
                       benefit specialist partner.
 1 July 2017           Merger of Rio Tinto Staff Superannuation Fund with Equipsuper.

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Appendix 2: Board and Committee dates - 2019
     DATE                   MEETING                                        TIMING

 28 January 2019            AUSTRALIA DAY PUBLIC HOLIDAY                   ALL DAY

 6 February 2019            Investment Committee                           9:00 AM – 12:00 PM

 7 February 2019            Audit, Risk and Compliance Committee           9:30 AM – 1:00 PM

 13 February 2019           Member and Employer Engagement Committee       9.00 AM – 1:00 PM

 14 February 2019           Governance and Rewards Committee               9:00 AM – 1.00 PM

 15 February 2019           Growth and Development Committee               9.00 AM – 12.00 PM

 26 February 2019           Board Dinner                                   6:30 PM – 9.30 PM

 27 February 2019           Board Meeting – Quarterly                      8:30 AM – 4:00 PM

 3 - 5 March 2019           Board and Executive Strategy Day – Offsite –   2.5 DAYS
                            RACV Healesville
 11 March 2019              LABOUR DAY PUBLIC HOLIDAY                      ALL DAY

 13 – 15 March 2019         CMSF Conference –                              3 DAYS
                            Brisbane – Attendees TBA
 28 March 2019              Investment Committee                           8.30 AM – 12:30 PM

 28 March 2019              Special Purpose Board Meeting                  1.30 PM – 5.00 PM

 19 April – 22 April 2019   EASTER WEEKEND                                 4 DAYS

 25 April 2019              ANZAC DAY PUBLIC HOLIDAY                       ALL DAY

 10 May 2019                Growth & Development Committee                 9:00 AM – 1:00 PM

 16 May 2019                Member and Employer Engagement Committee       9:00 AM – 12:30 PM

 16 May 2019                Governance and Rewards Committee               2.00 PM – 5.00 PM

 21 May 2019                Audit, Risk and Compliance Committee           9:00 AM – 12:30 PM

 22 May 2019                Investment Committee                           9:00 AM – 12:30 PM

 5 June 2019                Board Training - TBC

 6 June 2019                Board Meeting – Quarterly & Budget             8:30 AM – 4:00 PM

 10 June 2019               QUEEN’S BIRTHDAY PUBLIC HOLIDAY                ALL DAY

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DATE                 MEETING                                          TIMING

24 July 2019            Member and Employer Engagement Committee         9:30 AM – 1:00 PM

24 July 2019            Governance and Rewards Committee                 9:00 AM – 12:00 PM

30 July 2019            Growth and Development Committee                 9:30 AM – 12:00 PM

6 August 2019           Investment Committee                             9:00 AM – 1.00 PM

7 August 2019           Audit and Compliance Committee                   9.00 AM – 12.30 PM

7 August 2019           Risk Committee                                   2.00 PM – 5.00PM

14 August 2019          Board Training – TBA                             3.30 PM – 5.00 PM

14 August 2019          Board Dinner                                     6:30 PM – 9.30 PM

15 August 2019          Board Meeting – Quarterly                        8:30 AM – 4:00 PM

11 September 2019       Audit and Compliance Committee                   9:00 AM – 12:00 PM

18 September 2019       Investment Committee                             9:00 PM – 1:00 PM

19 September 2019       Board Meeting – Special Purpose –                9:00 AM – 4:00 PM
                        Financial Statements
27 September 2019       AFL PUBLIC HOLIDAY                               ALL DAY
5 November 2019         MELBOURNE CUP PUBLIC HOLIDAY                     ALL DAY

23 October 2019         Member and Employer Engagement Committee         9.30 AM – 1.00 PM

24 October 2019         Governance and Rewards Committee                 9.00 AM – 12.00 PM

29 October 2019         Risk Committee                                   9.00 AM – 12.00PM

29 October 2019         Growth and Development Committee                 1.00 PM – 4.00 PM

6 November 2019         Audit and Compliance Committee                   10.00 AM – 1.00 PM

7 November 2019         Investment Committee                             9.00 AM – 1:00 PM

13 – 15 November 2019   ASFA Conference – Location TBA – Attendees TBA   3 DAYS

19 November 2019        Board Training - TBA                             3.00 PM – 5:00 PM

20 November 2019        Board Meeting - Quarterly                        8.30 AM - 4.00 PM

20 November 2019        Board Dinner and Executive Christmas Dinner      6.30 PM – 9.30 PM

11 December 2019        Board Training TBC                               3.00 PM – 5.00 PM

12 December 2019        Board Meeting – [Placeholder]                    9:00 AM – 4:00 PM

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