Please note: this is a summary only and does not contain the full details which are contained in the Rest Director Selection, Appointment and Exit Guidelines.
1. About Rest
The Retail Employees Superannuation Trust (Rest) was established in 1988. Open to all Australians, Rest is amongst the largest funds by membership, with around 2 million members and under $51.5 billion of funds under management*. Retail Employees Superannuation Pty Limited (Trustee) is the trustee of Rest.
2. Director selection, appointment and exit guidelines
The Trustee has in place Director Selection, Appointment and Exit Guidelines (Guidelines) which set out the Trustee's procedures for the selection, appointment and exit of the Directors and Alternative Directors of the Trustee. The Guidelines aim to ensure that Directors appointed to the Board have those attributes, as identified by the Trustee, that are required to ensure that the Board is able to adequately govern the Fund in accordance with the law and with the governing rules of Rest (together, referred to as the Relevant Requirements).
In addition, the Guidelines seek to ensure all Directors are appointed and removed in accordance with the Relevant Requirements.
The Guidelines apply to both A Class Directors (member sponsors) and B Class Directors (employer sponsors) and their Alternates, and Independent Directors.The responsibility of adherence to the Guidelines lies with the Board. Note that the Guidelines are guidelines and are not binding on the Trustee. Any significant shifts from the Guidelines must be considered by the Board.
3. Appointment and selection process
In order to exercise the duties of the Trustee, a Board must comprise of Directors who:
- collectively, have the full range of skills needed for the effective and prudent operation of the Trustee's business operations; and
- individually meet the relevant fitness and propriety requirements.
The Guidelines outline the steps involved in selecting and appointing a Director who has the skills and experience necessary to make an effective contribution to Board deliberations and processes.
The need to appoint a new Director to the Board will arise in the following situations:
- The resignation or removal of a Director.
- Removal of a nomination of a Director by the original nominating organisation.
The Board must have an equal number of A Class and B Class representative Directors and such number of Independent Directors as determined by the Board of the Trustee from time to time.
- Step 1: Establish selection criteria
Selection criteria for a new Director will be established, giving consideration to the skills, knowledge and experience required.
- Step 2: Notification of selection criteria
Member sponsors entitled to nominate A Class Directors shall be notified in writing of the Selection Criteria determined by the Board. These Criteria are to be applied by the member sponsors when considering nominees for appointment.
B Class Directors
Each employer sponsor is entitled to nominate a B Class Director for appointment. The employer sponsor entitled to nominate the B Class Director shall be notified in writing of the Selection Criteria determined by the Board. These Criteria are to be applied by the employer sponsor when considering nominees for appointment.
The Board is entitled to appoint Independent Directors in accordance with the Trustee's Constitution. The Board must be satisfied that any person nominated for appointment as an Independent Director meets the Selection Criteria in accordance with Step 1 above.
- Step 3: Selection of proposed nominee
When considering a candidate for appointment, the parties responsible for nominating a Director for appointment will be asked to consider the fitness, propriety and skills of the nominee in accordance with the Trustee's policies and procedures.
As part of the review process consideration will be given as to whether there are any conflicts or potential conflicts.
The nominating parties must advise Rest of the proposed nominee for an A Class Director office or a B Class Director office.
Nominees for Independent Directors may be provided to the Board for consideration by the requisite majority number of Directors.
- Step 4: Fit and proper assessment
Once selected, but before appointment, an initial fit and proper assessment of the proposed nominee must be conducted in accordance with the Trustee's policies and procedures.
Where it is not possible for an fitness and propriety assessment to be undertaken prior to the formal appointment of an individual Responsible Person, the initial assessment of fitness and propriety must then be completed as soon as possible after the formal appointment is made.
- Step 5: Provision of documentation
On return of the completed and signed documentation necessary for a fit and proper assessment, the proposed nominee is provided with an Induction Kit containing all relevant charters and policies.
- Step 6: Appointment of director
A Class Directors
Member sponsors will nominate the candidate to fill the role of an A Class Director by tabling a written notice signed by the Member Sponsors at the next Board meeting. The nomination for appointment will be accompanied with the necessary supporting documentation to assist the Board in assessing the fitness and propriety of the nominee.
The nominee shall be appointed as an A Class Director following the resolution by the Directors that the nominee is a fit and proper person to be appointed as a Director.
B Class Directors
The relevant Employer Sponsor will nominate the candidate to fill the role of a B Class Director by tabling a written notice signed by the Employer Sponsor at the next Board meeting. The nomination for appointment will be accompanied with the necessary supporting documentation to assist the Board in assessing the fitness and propriety of the nominee.
The appointment of the B Class Director shall require the signing of a resolution by the B Class Directors and following the passing of a resolution by the Directors that the nominee is a fit and proper person to be appointed as a Director.
The nomination of a candidate to fill the role of an Independent Director is accompanied with the necessary supporting document to assist the Board in assessing the fitness and propriety of the nominee.
The nominee shall be appointed as an Independent Director following the resolution by the Directors that the nominee is a fit and proper person to be appointed as an Independent Director.
Any Director, with the approval of the holders of that Class of share by whom the Director was appointed, may nominate in writing a person to act as an Alternate Director in his or her place.
Alternate Director nominees may be required to attend an interview with existing Directors of that Class. When considering a candidate for appointment, the Director will be asked to consider the fitness, propriety and skills of the nominee in accordance with Rest's policies and procedures. As part of the interview process, the interviewers will determine whether any conflicts exist.The proposed Alternate Director nominee will need to complete steps 4, 5 and 6 above prior to the appointment as an Alternate Director.
4. Renewal of Board
The Board has an ongoing assessment and review process to ensure that the Directors maintain the required education or technical qualifications, knowledge, skills and training.
5. Director Exit Guidelines
Resignation or Removal of Director from Office
DirectorsA person will cease to be a Director in any of the following situations:
- The Director resigns in writing.
- The A Class Director is removed by his/her nominating Member Sponsors.
- The B Class Director is removed by his/her nominating Employer Sponsors.
- The Board resolves to remove or not renew the appointment of an Independent Director in accordance with the terms under which the Independent Director was appointed.
- The office of a Director is otherwise vacated, as set out below.
Vacation of office
The office of a Director will become vacant immediately if:
- The Director becomes insolvent under administration; or
- The Director becomes of unsound mind; or
- The Trustee becomes aware that the Director is a Disqualified Person within the meaning under the SIS Act; or
- The Director is prohibited from acting as a Director, by reason of an order made under the Corporations Act 2001 or the SIS Act; or
- The Directors, excluding the relevant Director, resolve that the Director is not a fit and proper person (within the meaning of the Trustee's policies and procedures); or
- The Director dies, or the Director’s tenure of office expires.
The office of an Independent Director will also become vacant immediately on:(i)The person ceasing to be an "independent director" for the purposes of the SIS Act;
(ii) The person ceasing to satisfy a condition that the person was required to satisfy to be eligible for appointment as an Independent Director.
Any exiting Director who retires or is removed from office must be replaced by the appointment of another Director within 90 days, in accordance the Guidelines, such that the Board has an equal number of A Class Directors and B Class Directors.
An Independent Director who retires or is removed from office may be replaced by another Independent Director.
A person will cease to be an Alternate Director if:
- The Director who appointed him or her as Alternate Director vacates office as a Director.
- The Director who appointed him or her as Alternate Director revokes the appointment by notice in writing.
- The Alternate Director resigns in writing or one of the events set out in the "Vacation of Directors" section above occurs in relation to the Alternate Director.
* As at 30 June 2018.