EQT Holdings Limited (EQT) Earnings Call Transcript & Summary

Shareholders, ladies and gentlemen, good morning. My name is Jeffrey Kennett, and I'm Chairman of EQT Holdings Limited. I'd like to acknowledge the Wurundjeri people as the traditional owners of this land on which I am and all other indigenous people of the lands of where you are. We recognize their continuing connection to this land and pay our respects to their elders past and present and emerging leaders for the future. On behalf of my fellow directors and executives and employees of EQT Holdings, it gives me great pleasure to welcome you to this 2020 Annual General Meeting. This meeting is the first time we have held it online due to our restrictions here in Melbourne. Nevertheless, I am confident we can deal with all the required business in this format. While this online format may be familiar for some shareholders, I acknowledge it may be less so for others. However, I assure you that you will have the same opportunity to participate today as you would at a physical meeting. This includes being able to ask questions through the online platform and vote using an electronic voting card. I'll discuss the process a little later. A quorum is present, and therefore, I declare the meeting open. I can confirm that the Notice of Meeting was dispatched to all shareholders in accordance with the company's constitution. I will take the Notice of Meeting as read. Before going further, I would like to introduce you to my colleagues on the Board. Jim Minto from New South Wales joined the Board in March 2017 and is our Deputy Chairman. He also chairs our Board Risk Committee and is a member of our Audit and Strategy Committees. Alice Williams from Melbourne is our longest-standing director. She joined the Board in September 2007 and is Chair of our Remuneration, Human Resources and Nominations Committee and a member of our Managed Investment Schemes Compliance Committee. I'll say more at the end of the meeting regarding Alice's contribution to this company given that she is retiring at the end of this meeting. Anne O'Donnell from New South Wales joined the Board in September 2010. Anne is a member of the Board Risk Committee, the Board Remuneration, Human Resources and Nominations Committee and Chair of the Managed Investment Scheme Compliance Committee. Kevin Eley, also from New South Wales, joined the Board in November 2011. Kevin is Chair of the all-important Audit Committee and a member of the Risk Committee. Glenn Sedgwick from Melbourne joined the Board in August 2016 and is a member of the Audit Committee. He also chairs our Strategy Committee, a committee that is designed to ensure that we as a company think long term with diversity of thought. Tim Hammon from Victoria joined the Board in December 2018 and is a member of the Strategy Committee and the Remuneration, Human Resources and Nominations Committee. Catherine Robson joined the Board in February of this year, but she'd already served for a number of years on one of our subsidiary Boards, being our Superannuation Board. Catherine is a member of the Remuneration, Human Resources and Nominations Committee and the Risk Committee. Finally, Carol Schwartz from Victoria joined the Board in March of this year. And the Board has selected Carol to be the next Chair of the company, with effect from the end of this meeting should shareholders resolve to confirm her appointment as a director later in the meeting. Finally, Mick O'Brien was appointed Managing Director in July 2016 after joining Equity Trustees in 2014 as a nonexecutive director. Mick is a member of the Board Risk Committee and the Board Strategy Committee. Also representing the company here today is our Chief Financial Officer, Philip Gentry; our company Secretary, Jennifer Currie; and a number of our other executive leadership team members. We also welcome Mark Stretton from Deloitte, our group external auditors. We thank them for the quality of their independent audit services that they provide to the Equity Trustee Group. For today's meeting, the agenda is as follows. I will make some introductory remarks, and then Mick will update you on the results, our strategy and our outlook. Then we'll proceed to the formal part of the meeting with several business items as listed. Voting on the resolutions will be conducted by way of a poll using the electronic voting card you should receive after clicking Get a Voting Card button. [Operator Instructions] If you have any trouble using the platform, please check the online portal guide on the Equity Trustees website or contact the help lines shown on the screen. With that, I'll now move on to my introductory remarks. I'm pleased to report that Equity Trustees has again performed admirably in a year of unprecedented challenges, not only in our country and for our country but the world generally. The 2020 calendar year started with the catastrophic bushfires underway along Australia's East Coast, followed by COVID-19 pandemic with its tragic health and economic consequences. Financial markets have experienced extraordinary volatility, and our country faces severe economic and social challenges in a less-than-certain world order. Notwithstanding this challenging environment, Equity Trustees' foundations, which were established 132 years ago, have underpinned our continued delivery of growth in revenue and maintaining our dividends for our shareholders. The current environment presents significant opportunities for us, with the industry undergoing enormous change driven by issues exposed by the Hayne Royal Commission and banks and other wealth providers exiting noncore businesses, more recently, the impact of COVID-19 on our country. Putting clients' best interests first is an increasingly important proposition for many companies. Regulators and the community are placing a higher value on trust, which is beneficial for we at Equity Trustees because we are a company built on trust. Our governance structure has held us in good stead and remains the Board's focus. We have continued to develop our governance with the addition of Carol and Catherine to the Board. And I know that they will make an excellent contribution both to the Board and the fortunes of Equity Trustees in the years ahead. We have also added 2 new directors to our subsidiary Superannuation Board during the year. I wish to thank Tony Lally, Chairman of Equity Trustees Superannuation Limited Board; and his colleagues for their exceptional leadership over the last year when the company has been able to attract significant new business. I want to thank the chairs of each of the Board's committees for their skilled stewardship and the exercise of their responsibilities. Alongside good governance, the health and well-being of our employees is paramount. The challenges this year of working from home have increased the risk of mental illness and other physical problems for our staff. But I am pleased that our continuous monitoring of our staff shows they are in good health despite these challenges. And to that end, I want to recognize our human resources and technology teams for making the remote working environment as comfortable and productive as possible for our employees. It would be remiss of me not to comment on the regulatory environment in which we work. It continues to change at a rapid rate. Equity Trustees works constructively with our key partners and regulators, and we are pleased with the productivity and the spirit of these relationships. In so many ways, the regulators and EQT work for the same people: our clients. And we want to make sure that our clients are governed by the best practices possible. Hence, we have to work constructively, and we do, with our regulators to ensure that outcome. Equity Trustees has now existed for 132 years, and we plan to be here for another 132 and hopefully longer. Our thinking and our focus is long term. You'll hear Mick talk about how we will keep investing in the business and how the Board is driving long-term considerations. Finally, people will know the company and my passion for community service. And later, you'll see how important has been Equity Trustees' efforts in philanthropy and the charitable sector and then now our increasing indigenous business. I'm proud we can make such an impact in areas where clients and beneficiaries really benefit from our professionalism and expertise, not to mention the compassion of all of our staff when dealing with both beneficiaries and clients. Early this year, we completed the establishment of 2 perpetual charitable trusts designed to support people and communities recovering from the disastrous bushfires. The Australian Volunteer Support Trust and the Community Rebuilding Trust are a joint initiative with the Business Council of Australia and Equity Trustees' work being performed on a pro bono basis. We recently established an Aboriginal Housing Foundation to benefit the Noongar people of Southwest Western Australia. The foundation is the first indigenous community trust to have joint trustees, Equity Trustees and the South West Aboriginal Land and Sea Council. These are concrete examples of where we can use our expertise for the benefit of the community. Turning to our financial results for the year. They were again very pleasing. Revenue was up 3.2% on the prior year despite the major market downturn in the last quarter. Profit after tax was $19.2 million, which was after a provision for a long-standing tax matter. The Board was importantly able to deliver to shareholders the same dividend of $0.90 as we were able to deliver in the previous year, a remarkable achievement among financial services companies. The results reflect very significant growth in funds under supervision and investments we have made in the business to facilitate this growth. Just as importantly, we have improved our service to our clients and our beneficiaries. Equity Trustees is a special company that always puts its clients, its beneficiaries and employees first, balancing the needs of all our stakeholders to ensure a strong company that can stand the test of time. We have clearly done that this year. I'd now like to hand over to Mick and let him take you through the results in more detail.

Thank you, Jeff, and good morning, everyone. Can I also pass on my warmest greetings to everyone who is online this morning? I want to start by introducing the leadership team. Many of these faces will be familiar to you because we've had a very stable leadership team over the course of the last 4 years. And I think this has contributed to our strong results. For those 4 years, we've had Philip Gentry as our Chief Financial Officer and Chief Operating Officer; Sharni Redenbach, our Executive General Manager of Human Resources; Ian Westley, Executive General Manager, Trustee and Wealth Services, heading up our private client business, which, apart from covering our trusts and estates, includes philanthropy, compensatory and indigenous trusts; Mark Blair, our Executive General Manager of the Superannuation Trustee Office, driving the growth in that business as we've reshaped it in recent years; Alicia Kokocinski, our General Manager of Marketing and Communications. In more recent times for the last couple of years, we've had Darren Thompson leading our Asset Management division, who have produced stellar investment performance; and Owen Brailsford, our Chief Risk Officer, who leads a strong risk management focus for our business. I'm also pleased to say that we've continued to strengthen the team this year with the addition of Russell Beasley as our new Executive General Manager of Corporate Trustee Services; and Jennifer Currie, our new Company Secretary, such an important role in a company like ours. Jennifer is relatively new to the group and has extensive experience in similar roles for other listed companies. And Russell has been at Equity Trustees for 15 years, and he has extensive experience in managing managed investment schemes. Elevating Russell to the Executive General Manager role has allowed Harvey Kalman to take on the role of Managing Director, U.K. and Europe, and Global Head of Business Development for Fund Services, which is a critical role as we look to accelerate the development of our offshore business and maximizing opportunities here in Australia. Our strategy remains the same, and that is to be Australia's leading trustee company. It's a strategy that has held us in great stead, and we're well on our way to achieving our vision. Being a trustee company means we are a company with clear purpose. And it's a purpose to ensure we look after the interests of others in everything that we do. Jeff mentioned the unique characteristics of this company, and I'd like to think of it as a financial services company with heart. It's a simple vision, but of course, our success is in the execution where we seek to be a leader in every line of trusteeship in the Australian market. Now let me give you an overview of the FY '20 financial results. The most notable aspect of the result was a very strong growth in funds we oversee, increasing to $101 billion at the end of the financial year, an 18% increase on the prior year. And now as at 30 September, we stand at $116 billion, another increase of 15% since the end of financial year. We've made a deliberate investment in our capability throughout the year to manage this growth with a range of new experienced appointments and deployment of new technology. Our growth has come primarily from capitalizing on the industry trend to outsource the fiduciary role to specialists who can perform the role in an efficient and unconflicted manner. And the other key point I want to make is in such a challenging environment for Australia this year, with the bushfires and the pandemic and its effect on people and the investment markets, I've been really proud of the difference Equity Trustees has been able to make in providing our services to the benefit of our clients and the community and looking after our employees. The financial results have been very resilient throughout the year. Our revenue was up 3%, notwithstanding the significant market downturn in the second half, which speaks to strong underlying performance. Net profit before tax was $30.3 million and after tax $19.2 million, reflecting a provision for a one-off longstanding tax matter. Underlying earnings per share was $1.027. The Board were able to maintain the full year dividend at $0.90, which was a rare result for financial services companies in the latest reporting season. The company has maintained a healthy balance sheet. We haven't relied on any government support, haven't had to raise capital, and the balance sheet provides us with great flexibility. Pleasingly, the result has been driven consistently across the business, but obviously, our private client business was the most impacted by the markets. This slide shows the key financial metrics for the year. The top left-hand box shows revenue growth, and you can see the very consistent growth since FY '17, with the company reaching revenue of $95.4 million for the year, a 6% compound annual growth rate over the period, noting the market downturn for the last 4 months of this financial year. The box on the top right shows the net profit before tax, which has been increasing consistently to FY '19 and has come back marginally by 4% on an underlying basis this year. In the bottom left-hand corner, you can see the progression of earnings per share has remained in line with the progression of net profit. On the bottom right-hand side, you can see the growth in dividends and the maintenance of the dividend there at $0.90 per share. Now this slide shows the growth in funds under management, administration and supervision, FUMAS, in each of the 2 business divisions. This measure is an important measure because it's the prime driver of our revenue. The TWS graph has been updated to show the 2 major appointments we took on after the 30 June balance date. Shareholders will be aware of our announcement that we were appointed as the superannuation trustee to AMP Life's superannuation business following its acquisition by Resolution Life; and also to the HUB24 Super fund, one of Australia's fastest-growing platforms. These 2 superannuation appointments added $15.4 billion to our funds under supervision, which contributed to an increase of 16% on our funds under supervision since 30 June. The graphs also show the impact of our appointment as both the trustee to the AIA investment funds following AIA's acquisition of CommInsure and also as the superannuation trustee to AIA's superannuation funds in October of 2019. These appointments to AIA also added another $15 billion of funds to our oversight at the start of the year. Hence, the uplift in both TWS and CTS' funds. Let me quickly touch on each area of the business. In our private client business, it's helpful to look at this in 2 dimensions: our traditional estates and trusts; and the newer lines of business in indigenous trusts, compensatory trusts and philanthropy for living donors. You can see the results slightly down in our traditional lines, reflecting the investment markets. And on the right-hand side, you can see some good growth in areas of the business where we focus a lot of our business development activities, albeit off a smaller base. We've been quite pleased with these results. This slide shows the superannuation results. We decided 4 years ago to transition this business into a pure trustee model and move out of other parts of the value chain. And the strategy has worked exceptionally well as the industry has gone through major disruption and our independent specialist services being in high demand. You can see we have grown this business from $3 billion in FY '17 to $27 billion in the last 3 years. And I mentioned the major appointments earlier. We now provide superannuation oversight to more than 700,000 Australians and have become a new force in the superannuation market. On the Corporate Trustee Services side of our business, there are 3 areas I want to highlight. Firstly, fund governance in Australia or Responsible Entity services. In this area, we maintained our growth pace with a series of new appointments throughout the course of the year. One of those was the AIA appointment mentioned previously. And we continued growing the funds we have as listed investment trusts, the most recent being the Partners Group trust, which listed in September, raising over $0.5 billion. That subset of our CTS business now has assets under supervision of $1.8 billion from a baseline of 0 at the beginning of that year. Whilst the remuneration rules have changed for these listed vehicles, we still expect good growth in this area as the market continues to innovate with new designs and we again have some listed funds sitting in our pipeline. In the second box but still on fund governance, we are carefully building our global business. We've added 6 staff in the business and are now set up well for growing the business. We're delighted to secure AllianceBernstein, a top 30 global fund manager, as a client in the U.K. We established an Irish ICAV, which means we will be able to establish new managers and new funds more efficiently and quickly. And we successfully transitioned River & Mercantile, a local well-respected global equity fund manager, from an internal model to an outsourced model of governance for a suite of 8 funds totaling just under $4 billion. The graphs show the number of funds has grown from 8 to 22 in the year. That's a very good precursor whilst securing new funds flow in the future. I've talked about continuing to build our presence in the corporate trust market. You can see we had good growth in this area from a small base, but it's an area of increasing focus for us. We now have an ability to perform all required roles in this area of the market. And we are carving out a reputation as a keen provider to showcase our credentials to a market looking for greater choice. Now this slide is important, and shareholders would have seen it before. It shows how we maintain our focus on delivering to all of our stakeholders in the company: our clients, employees, shareholders and the community. You heard Jeff speak about the uniqueness of this company, and I think this year, more than any, saw us balance our efforts to all stakeholders. Our first target, T1, is focused on improving client satisfaction. Our second, T2, is lifting our employee engagement, a key focus of the last 4 years. T3 is growing shareholder value, which I've already spoken about. Given the unique position this company occupies, T4, deepening our community impact, differentiates us from almost all other companies. And we're very honored that we can facilitate such an impact on the community through our philanthropy business and also volunteering our time to assist others. Now I'm going to quickly walk through our results on each of these measures. Starting with T1, improving client satisfaction. We've been surveying our clients for 4 years now, gathering their insights into how we can improve our services. Delivering excellent client service is a long-term journey for this company, but we were really pleased that our results improved materially in both key measures. The Net Promoter Score, the likelihood that clients will recommend us to others, moved up from 14 to 24. And the Net Loyalty Score, the likelihood that our clients will use other services from the firm, improved again from 17 to 29. These great results were a pleasing reward for our focus on client service culture. The next measure is T2, lifting employee engagement. This is an area that we've been focused on for the last 4 years. When we started this process, we were in a very different place. I'm pleased to say now that our performance has lifted considerably. We took this survey in June at the height of the lockdown, and our results are measured against the industry prior to lockdown. Nevertheless, we are at or above the industry norm on both measures of engagement and enablement and just below high performing on enablement. Our focus on improving our engagement enablement was on training, work structure and processes, employee benefits and resourcing. And we will continue investing in our people as our most valuable asset. I covered T3 earlier, so I'll move to T4, deepening our community impact. You can see on the left-hand side the grants we made to the for-purpose sector or the charitable not-for-profit sector. We granted over $90 million to so many fabulous causes last year. And the philanthropy team really pivoted their activities in the last 6 months to where the community really needed support in these tough times due to the difficulties presented by the global pandemic. The regular granting, represented by the blue bars, increased again in FY '20. And we will be doing everything we can on the investment front this year to deliver a steady level of income to the sector as best we can. The pie chart shows the categories, the largest being medical research and health, but also very significant contributions to children and young people, aging and aged care, animals and the environment and many other charitable causes. Added to that and in line with our culture and the sentiment behind T4, during the course of the year, we contributed 40 volunteering days before that opportunity was cut off, but more than 1,200 pro bono hours in establishing the 2 trusts to assist the community in recovering from the bushfires, an effort that saw more than $10 million raised, with much already reaching impacted communities. Now it's incumbent on me to comment about our management of the business during the COVID challenging time. Obviously, we have prioritized our employees' health and well-being and our obligations to the community. I'm pleased to say our employees have handled the remote working very well and have continued to deliver excellent client service to our clients, and their well-being, we think, is very good, and have ensured that our clients' interests were equitably looked after during the severe market downturn that we saw in March and April. We've managed the expense base closely and our investments closely and importantly, as we mentioned before, pivoted our philanthropy to immediate areas of need in the community. As Australia's trusted fiduciary, we are well positioned to capitalize on the opportunities in front of us. The strategy has been working. The industry upheaval has highlighted the importance of good governance, independence and expertise. And our results demonstrate a real resilience. To prepare for our FY '21 year, we've been investing heavily ahead of the curve to bring on the right experienced people in both governance roles and in areas where the business is growing quickly. We've also had a greater focus this year on technology with investments in cybersecurity, increased process digitization and automation and implementation of new platforms in risk and compliance. And our balance sheet is in a very healthy position. This slide shows some of the key appointments we've made throughout the year. I won't run down through every line on this slide because Jeff already mentioned the changes to the holding company Board and the Superannuation Board. We likewise strengthened our Boards in the U.K. and Ireland. On the right-hand side, you can see the very important roles we've added to the business. And I can say, when we have set out to recruit key experienced people, we've found that we are increasingly being viewed as an employer of choice. We have a clear growth agenda. The industry transformation has been providing opportunities. We've been investing in our people and technology and pursuing organic and inorganic opportunities. We heavily invested in the business to make this growth happen in 2020, and we believe it gives us a great platform for 2021. Of course, market volatility will always impact our results. Subject to the markets staying around current levels, we expect the first half earnings to be somewhat lower than the prior year, principally reflecting lower Australian equity markets and lower interest rates. We expect second half earnings to improve on the first half and the full year result to continue to be tempered by the lower Australian equity market levels versus last year and the lower interest rate environment. So in closing, I'm delighted to lead the executive team and our staff. And I'd like to thank them all for their hard work and support in this very challenging year. I want to thank the Board for all their support through the course of this year. On the occasion of Alice's retirement, I want to thank her for her service to the company and bringing her great intellect and experience to bear over so many years. Thank you, Jeff, for your chairmanship over the last 3 years and your contribution over more than a decade. And thank you for your strong personal support of me. It's been very much appreciated. I know that shareholders will vote on Carol's appointment to the Board later in the meeting. And on the basis of an affirmative vote, I'm very much looking forward to working under Carol's chairing of the company. More than ever this year, I've felt extremely privileged to be able to look after our clients and be able to contribute to the community in these tough times. And to our shareholders, thank you for your support and the confidence you've shown in this company.

Hello. Thank you, Mick, very much indeed. And thank you all very much for -- ladies and gentlemen, for you joining us on this AGM in this new format. There's about 150 online, and we thank you for making yourselves available. We will now move on to the formal part of today's meeting. Our Company Secretary has confirmed that the Notice of Meeting has been sent to all shareholders and other persons entitled to receive it within the notice period and in accordance with the Corporations Act and the constitution. The matters requiring consideration today are outlined in detail in the Notice of Meeting, and we will take the Notice of Meeting as read. Equity Trustees' financial statements for the 2020 financial year, together with the auditor's report, are now in our annual report, which is available on our website. Our share registry provider, Link Market Services, will conduct the voting at today's meeting by way of a poll, and [ Tuskett Koha ] of Link will act as our returning officer. Votes will be counted after the meeting and published on the ASX. [Operator Instructions] We will address resolutions -- specific questions as we move through each of the resolutions shortly. Once the formal business is completed, we will address any general questions. If we aren't able to get through all of them today or if there are specific questions that would be better addressed on an individual basis, we will respond to them after the meeting. If we receive multiple questions that are similar, we'll try and amalgamate them. Shareholders can cast their vote using the electronic voting card. To receive this, you click on Get Voting Card, and you'll be asked to enter your Securityholder Reference Number, SRN, or Holder Identification Number, HIN, and your postcode if you're in Australia or country if you're outside Australia. If you are intending to vote, you'll be able to finalize and submit vote until 5 minutes after the end of the meeting. At the conclusion of the meeting, a red bar with a countdown timer will appear at the top of the webcast and slide screen advising the remaining voting time. At the close of the meeting, any vote you have placed will be automatically submitted. We will be displaying the proxies received for each resolution on the screen. Shareholders have appointed me, as Chair of the meeting, as proxy for up to 11,229,268 shares depending on the resolution, voting either for or against or with discretion for all resolutions. As indicated on the proxy form and in the Notice of Meeting, my intention as Chair is to vote all discretionary or undirected proxies in favor of each resolution. So we will now move to the first item of business. And that is to receive and consider the financial report of the company for the year ended 30th of June 2020, together with the directors' report and the auditor's report as set out in the company's 2020 annual report. I will take the reports as read. I can confirm that our auditors have not received any questions from shareholders concerning the audit of the company's account or their independence. So I will now take questions concerning the financial report. To our Company Secretary, are there any questions that have been lodged on the financial report, please?

Thank you, Jeff. I can confirm that we don't have any questions on this item of business.

All right. Thank you very much indeed. We will then move to the next item of business, which is resolution 2.1. And that concerns the election of Ms. Catherine Robson. The proxy votes are shown on the screen. Catherine has served on the Board since February. She has also served on our superannuation subsidiary Board for 6 years, and all directors recommend her election. Let us now hear from Catherine.

My name is Catherine Robson. And I'm delighted to offer myself for election to the Board of Equity Trustees. I had the privilege to serve as a nonexecutive director of subsidiary company Equity Trustees Superannuation Limited for 6 years. During this period, the superannuation business flourished. It grew from less than $1 billion in funds under trusteeship in 2014 when I joined the Board to approximately $27 billion today. I was proud to chair the Board Investment Committee during that period and oversee the uplift in both people and processes to facilitate this rapid growth. Concurrent with my subsidiary directorship, I was invited to join the holding company Risk Committee in 2015 and HR, Remuneration and Nominations Committee in 2016. Participation in these committees over the subsequent years has given me broad exposure across the Equity Trustees Group and a deep understanding of the complexity of its operations. Having spent more than 20 years advising high-net worth individuals and families, I have a deep affinity with the private client businesses at Equity Trustees. I understand the unique challenge and opportunity of delivering exceptional customer outcomes in a highly regulated environment. I bring firsthand entrepreneurial experience to the Board, having built and successfully sold an award-winning financial planning practice. I also understand the transformative potential of technology and business model innovation as a result of my nonexecutive directorship of SCALE Investors. SCALE invests early-stage venture capital in exceptional female-led start-ups. I chair one of SCALE's most promising early-stage portfolio companies, education technology innovator TalkiPlay. Equity Trustees' commitment to impactful philanthropy strongly resonates with my own not-for-profit activities in health and education. I'm a member of the Walter and Eliza Hall Institute of Medical Research Advocacy and Support Committee, I sit on the Investment Committee at Cancer Council Victoria, and I'm a member of Korowa Anglican Girls' School Council. I have a deep understanding of financial services, having commenced my career at Macquarie Bank before spending 11 years with NAB Private Wealth. In addition, I'm currently a nonexecutive director of community-owned Bank, Greater Bank, which is based in Newcastle in New South Wales. It's been an honor to serve with retiring directors, The Honorable Jeff Kennett and Alice Williams. I hope to do justice to their legacy and use my skills, knowledge and experience to contribute to Equity Trustees. And I am deeply grateful for your support for my election to the Board. Thank you.

Are there any questions concerning this particular item. Jennifer?

Thank you, Jeff. I can confirm that there are no questions on this item of business.

Thank you. I now propose that resolution 2.1 as set out in the Notice of Meeting and put the motion to the vote. Please cast your vote. [Voting]

And I move on now to the next resolution, 2.2. And that concerns the election of Ms. Carol Schwartz. The proxy votes are shown on the screen. Carol has served on the Board since February. She has had and continues to have an outstanding career in business and in the community. And her CV speaks for itself. I'm confident Carol will bring incredible energy, experience and intellect to this company. And she is ideally suited to contribute to the core purpose and the values of this company. Enough said from me. Carol, over to you.

Hello, and welcome. Thank you, Jeff, for that lovely introduction and for the opportunity to address the Equity Trustees AGM. It's a privilege to be here and to share a bit about myself with our shareholders today. I would like to acknowledge the Wurundjeri people of the Kulin Nation where I'm based today and pay my respects to their elders past, present and emerging. Over the years, I have had a diverse career across property, the arts, finance, investment, entrepreneurship, government and philanthropy. I was honored to be appointed an officer of the Order of Australia in 2019 and to be recognized for my contribution to the property sector via induction into the Australian Property Hall of Fame and as an honorary life member of the Property Council of Australia. I have chaired and participated in numerous listed and private company Boards and have also chaired major government Boards and conducted significant inquiries on behalf of government. Currently, I'm on the Boards of the Reserve Bank of Australia, Qualitas Property Partners, Skalata Ventures and Trawalla Group. Alongside these commercial ventures sits my long-standing involvement and passion for philanthropy and the not-for-profit sectors. Many of you may know that I am a strong advocate for women in leadership, particularly in business, politics and the media. As Founding Chair of the Women's Leadership Institute Australia, I am proud of catalyzing practical solutions to strengthen the representation of women, including the Pathways to Politics Program for Women, the Panel Pledge and the Women for Media database. In 2004, my husband, Alan, and I established our family foundation, the Trawalla Foundation. We work with exceptional individuals and organizations that have a vision for the future of Australia, focused on strengthening gender equality, creativity, sustainability and social justice within our society. I am also the Founding Chair of the wonderful social enterprise and B Corp, Our Community, which is working to build strong communities through stronger community organizations. I hope this brief overview of my background highlights the breadth of my experiences and what this can offer to the Equity Trustees Board in terms of skills in governance, fund management, entrepreneurship and philanthropy. I am incredibly excited about joining Equity Trustees and working with the excellent Board members, executive and staff. A big thank you to Jeff who first raised the idea of joining the Board with me and he continued to explore with me over a period of time. Equity Trustees is clearly a significant heritage Australian brand, just over 130 years old, and has a strong balance sheet and stable leadership team. The successful balance across all stakeholders is reflected in the company's notable record in recent years, continuing to deliver even in a challenging environment. I know Equity Trustees has been fortunate to enjoy the trust and support of loyal shareholders who believe in the business, recognize its value and prospects for future growth. I am so impressed by the expertise and passion within the organization, which is underpinned by a strong sense of purpose. It is highly compelling that for almost every instance where the company takes on trusteeship, it performs a role of looking after others' interests first and foremost, whether they are the beneficiaries of estates and foundations, members of superannuation funds or investors in managed investment schemes. Recent challenges in the financial services sector have demonstrated the importance of genuine trust. With a core focus and specialization in trusteeship, Equity Trustees is uniquely placed. The organization is clearly a trusted adviser in the truest sense, and I look forward to supporting that tradition as the organization continues to grow and evolve. I am especially excited about transitioning Equity Trustees to a 21st century-ready business and the opportunities this will offer for innovation in ways of working and services provided. From my discussions to date, I know this is particularly exciting and motivating for the executive and the staff. During this period of transition, I wanted to acknowledge and sincerely thank both Jeff Kennett and Alice Williams for their significant contributions to the Equity Trustees Board. Jeff has been at Equity Trustees since 2008 and is known as a dynamic and engaged Chair. Jeff has put his considerable and well-known energy behind a number of high-impact initiatives, which have further strengthened Equity Trustees' legacy and reputation particularly in relation to philanthropic giving. These achievements are now highlighted in the wonderful Philanthropy Annual Giving Review reports. Jeff's tireless work in Victoria, particularly in relation to mental health and indigenous disadvantage, is so greatly appreciated. I also wish to acknowledge the commitment of Alice Williams, who has served on this Board since 2007 and has devoted considerable energy and expertise to the Remuneration, Human Resources and Nominations Committee. Alice's great strength in financial analysis and funds management has served the CTS side of our business particularly well, and she has offered enormous experience in remuneration practices from her time chairing many other Remuneration Committees. I also note Alice's long-standing service on the Advisory Committee of one of Equity Trustees' longest-served and oldest philanthropic trusts, the Alfred Felton Bequest. Thank you so much, Alice. So in closing, thank you for the opportunity to join the Equity Trustees Board and my proposed appointment as Chair. I look forward to discovering more about this wonderful company in the coming months. I believe I can add significant value with my commercial and philanthropic experience and would be honored to serve the company should shareholders approve my appointment. Thank you.

Thank you, Carol, very much indeed. I will take any questions concerning this item, please. So Jennifer, any questions?

Thank you, Jeff. Our first question is from Stephen Mayne. Well done on managing a seamless chair succession process. Could the outgoing Chair Jeff Kennett outline how the process worked? Did we use a headhunter to help secure the services of Carol Schwartz?

Thank you, Stephen. This process of transition has taken 2 years to get to this point. I always said that on taking on the chairmanship, I would only stay for 3 years. And therefore, the Board was very focused on succession. No, we did not use a headhunting organization. The Board came together, discussed a number of names. But in the end, we decided, in this period of deep scrutiny by regulators and community, we wanted an individual who could actually continue the values that underline Equity Trustees. And they have been mentioned before by myself and by Mick O'Brien. And that is trust. More importantly than ever before, organizations, communities, regulators want to trust organizations. And so we searched, as I said, far and wide. We didn't necessarily just want to appoint another director. We wanted to appoint someone with specific skills that fitted in with the skills matrix that we have for the appointment of directors and the Chairman. But at the base of our consideration was reinforcing this element that Equity Trustees represents so well, and that is trust. And that is why I think we have been so fortunate under Mick's leadership over the last year in effecting so much new businesses -- business. People know they can entrust Equity Trustees based on a set of values and good governance, as I said, that stood the test of time. Jennifer, anything else?

Thanks, Jeff. Our next question is also from Stephen Mayne. Congratulations on the recruitment and appointment of Carol Schwartz as the new Chair who is an excellent choice. Could Carol share with the meeting her experience of the recruitment process and how the succession came to pass?

Carol, could you address Stephen, please? And if you haven't met him before, let me introduce you to him.

Thanks, Jeff, and thank you, Jennifer. And thank you, Stephen, for that question. I have met Stephen. In fact, I've had the pleasure of meeting Stephen a number of times. I -- like it was probably around August, September of last year when Jeff came to see me and broached the idea of me joining the Equity Trustees Board. And he said, "We have a very, very strict process and a matrix in place. And I'd like you to meet the other directors and then come on to the Board for a period of time to see whether there's a good fit. And let's see how it goes." So I met the other directors. I actually met Alice Williams first, who was the Chair of the Nominations Committee. I was very impressed with Alice, and she spoke very, very highly of her fellow directors, of the executive team and also of the process of selection of new directors and chairs, how they discussed it amongst themselves and how thoughtful the process was. So that was really how I was introduced into it. And I'm really pleased with the outcome, and I hope you are, too.

Thank you, Carol. And can I just -- by way of reference, I've served on a lot of Boards, public and private. And I can't think of anyone who have spent so much time before agreeing to come on to the Board with succession of chair in mind. So I spent so much time in terms of due diligence, getting to know Board members, senior executives and the workings of the company. So Carol is very, very well prepared for what will hopefully occur at the end of this meeting. Jennifer any other questions, please, on this matter?

No, there are no other questions on this item of business, Jeff. Thank you.

All right. Thank you. I now propose resolution 2.2 as set out in the Notice of Meeting and put the motion to the vote. I ask you all please to cast your vote. [Voting]

Resolution 2.3 concerns the reelection of Jim Minto. The proxy votes are shown on the screen. Jim has served on the Board since March 2017 and, during this time, has made a valuable contribution by his expertise in superannuation, insurance and trusteeship. And Jim is also Deputy Chair of the Board and, can I say, has provided invaluable support to me as Chairman on top of his normal Board duties. So let us now hear from Jim. Thank you, Jim.

Hello, everyone. I'm Jim Minto, and I'm really delighted to have been able to serve as a director of your company, Equity Trustees, over the last 3 years. Equity Trustees has a unique position in the Australian financial services industry and is really well-placed for the next phase in its long and successful history. There aren't many companies that have been around as long as this one. And it can only continue to be around for a long time into the future with really good strategies, execution and by looking after its clients. My interest as a director relates to this unique industry where I had my first job, and I could see the power of what trustee companies do. And in fact, it was my first CEO role. Although I'm a chartered accountant, I've really had most of my career in management and 26 years as a CEO in various parts of financial services. The purpose and role played by trustee companies in society has been really valuable. The challenge for the next 3 years is to deliver more sustainable growth and leverage into the needs and aspirations of consumers as these evolve. So our business is changing. People are looking for very modern financial services offers. Equity Trustees has expanded into superannuation as a leading specialist superannuation trustee and has won some major appointments in recent times. We've diversified into Europe the same line of business that we run in Australia but doing it in a different market with our clients who are also based there. At the core of everything we do really is protecting investors' interests. We're a responsible entity. We are in effect the trustee of funds of major share market funds where our job is to make sure the manager does their job right and that investor interests are protected. So I would be very happy to serve you for a further period of 3 years. I think good governance will really help underpin our success going forward, and I'd be pleased to be part of that success should you see the result today. Thank you very much.

Thank you, Jim. I consider ourselves to be most fortunate to have an individual of Jim's experience in what is a very large part of Equity Trustees business. Jennifer, are there any questions concerning this item, please?

Thank you, Jeff. There are no questions on this item of business.

Thank you. I now propose resolution 2.3 as set out in the Notice of Meeting and put the motion to the vote. So please cast your vote. [Voting]

Resolution 3, remuneration report. Resolution 3 concerns the adoption of the remuneration report for 2020. The proxy votes are shown on the screen. I note the vote on this resolution is nonbinding. Jennifer, any questions here, please.

Thank you, Jeff. Our first question is from [ Peter Ed ] for the Australian Shareholders' Association.

Yes.

I note that you do not currently have a policy on nonexecutive directors holding shares in the company. I acknowledge that most directors do hold shares. Will the forthcoming review of directors' remuneration include a policy for holding company shares?

Thank you. As you will note, most of our directors do have shares, and all directors intend to have shares. So I think that probably answers the question as succinctly as I can. Thank you. Any other questions?

No, Jeff, that's the only question on this item of business.

Thank you. I now propose resolution 3 as set out in the Notice of Meeting and put the motion to the vote. Please cast your vote. [Voting]

Resolution 4 concerns the granting of a long-term incentive award for Mick O'Brien as part of his compensation package. The proxy votes are shown on the screen. Jennifer, do we have any questions here, please?

Thanks, Jeff. We have not received any questions on this item of business.

All right. Thank you very much indeed. I now propose resolution 4 as set out in the Notice of Meeting and put the motion to the vote. Please cast your vote. [Voting]

Resolution 5 concerns the reinsertion of the proportional takeover provisions into the company's constitution. These provisions must be renewed every 3 years or they will cease to have effect. These provisions have not been renewed within the last 3 years, so it must be reinserted at this AGM in order that they apply to proportional takeover offers moving forward. The Board considers that these provisions are important as they assist in ensuring that shareholders are compensated by an adequate control premium in the event of a proportional takeover and allow shareholders to decide whether a proportional takeover bid is acceptable and should be permitted to proceed. This is a special resolution and must receive the vote of at least 75% of votes cast by members entitled to vote in order to pass. I will now take questions concerning this item. Jennifer, do we have any?

Thanks, Jeff. There are no questions on this item of business.

Thank you very much. I now propose resolution 5 as set out in the Notice of Meeting and put the motion to the vote. Please cast your vote. [Voting]

That concludes the formal business of the meeting. If you have not already done so, please submit your votes as we will be declaring the poll closed shortly. We now have time for any general questions. So Jennifer, over to you. Do we have any general questions?

Thanks, Jeff. We do have a few.

Go.

The first one is from Stephen Mayne. Since the Hayne Royal Commission, ASIC has made lots of noise about getting tough on the financial services industry. Have we noticed any step-up in the regulatory pressure on our business? And what, if anything, has changed in terms of our relationship and engagement with the regulators over the past 2 years?

Thank you, Stephen. I think the Hayne Royal Commission not only put pressure on a lot of corporate companies, but it also put pressure on the regulators. And we at Equity Trustees, for many years now, as long as Alice and I have been on the Board, have had a very good relationship with the regulators. By that, I mean we see the regulators not as policemen and women but as having the same clients as we do and that all of us and they and we, that is the regulators and we, want the best outcomes for our shareholders, for our beneficiaries, for those who are the beneficiary of philanthropic trusts. And so we spend a lot of time with the regulators. It's not to say we're hand in glove. And at times they make demands upon us, which we respond to. Sometimes we find them tougher with others, but it's a very fruitful working relationship. We are not annoyed by regulators. They have a job to do. We have a job to do. And although pressure has been applied to them and standards have perhaps lifted -- the high jump bar has been lifted higher, I would like to think that, as of this meeting, our relationships with the regulators is extremely healthy. We work together, and I think that is to the betterment of society. So as I said, we don't see them as policemen and women. We see them as having a job to do with a common audience and a common community. I hope that answers your question, Stephen. Next, Jennifer.

Thank you, Jeff. Next one is also from Stephen. Some of the language used by our Chairman attacking the Victorian government over recent -- the recent lockdown has been a little over-the-top in recent times. Shouldn't public company chairs leave politics behind and adopt a more neutral position on contentious public issues?

Well, that's hardly to do with the administration of Equity Trustees, Stephen. But the reality is, I think there are a lot of people speaking out around the impact of COVID, the number of deaths, where it is counted here in Victoria are over 800, the closure of many businesses, many of whom are obviously indirectly related to EQT. Leadership takes different shapes and different forms always. But we're all part of one society. And we all want the best for society. And I think and I've always thought that leadership, whether it be of governments or whether it be of organizations, commercial, not-for-profit, sporting, do have a right and a responsibility to speak out. And unfortunately, silence is not always golden. Any other questions, Jennifer?

Thank you, Jeff. The next question is from [ Peter Ed ] for the Australian Shareholders' Association.

Yes.

I was pleased to see your continuing emphasis on employee engagement and enablement but disappointed to see the drop-off in both measures from 2019. What actions are you taking to return to previous improvement?

I think it might be best if I throw that over to Mick O'Brien, our Managing Director, as he will be there in the future and I will not. So Mick, over to you, please.

Thank you, Jeff, and thank you for the question, [ Peter ]. Look, we did have a small drop in both those measures. But we did take the survey at the height of the lockdown in Melbourne where most of our staff are, and our results are still above the industry norm. And on enablement, we're almost at the high-performing levels. But look, the critical point of these surveys is people are our #1 asset in the company. And so we want to get their feedback. And they give us very clear feedback in these surveys. And we've got a focused action plan for the next 12 months, which is going to concentrate on the work structure and processes. So that's technology and collaboration amongst the teams, on training where we've been putting our focus on our leadership training and also just ensuring we got the committed funds and scheduled times to make that training happen, on resourcing in our high-growth areas. So I think in the last year, maybe the growth was so significant that we needed to ensure the resourcing kept up to speed. And then finally, just on the benefits, I'm ensuring that we've got the right mix and fit-for-purpose benefits that are provided to our employees.

All right. Thank you, Mick, very much indeed. Jennifer, anything else, please?

Thanks, Jeff. I'm happy to confirm that we've now answered all the questions received by the company.

Excellent, excellent. Thank you very much. Thank you all for your submitted questions. And can I just comment here briefly before we move to my closing remarks? I just want to send a special thank you to our staff around Australia. They are very, very special people. And I'm sorry I haven't been able under this current environment to see you all and say goodbye to you, but your work is very, very much appreciated. All right. Well, we have previously announced that I am retiring as Chair and a director of this company at the end of this meeting. It has been an absolute privilege to have served our clients and our reputation for the last 12 years. I now want to say a few words, which even are somewhat ad-libbed. Ladies and gentlemen, thank you. That concludes our question time. I will now bring the meeting to a close. Ladies and gentlemen, we have announced previously that I will be retiring as the Chair and as a director of Equity Trustees at the end of this meeting. I can't tell you what a privilege it has been serving shareholders and our clients for the last 12 years. When my predecessor, Tony Killen, asked me to join the Board and after a lot of consideration, I agreed, I didn't know at the time that, in fact, my great-grandfather was one of the founding directors of this company in 1888, and he was to become the second Chairman and is the longest-serving Chairman having served for 22 years. It was through that connection that I got to know of him a lot better. And I can simply say to you, the values that he had, and I'm sure the other founders at the time, are the values that still exist. And we talk about them regularly. We talk about good governance. We talk about those who have entrusted us with their wills and their estates to drive benefits for community for decades to come. We talk about our clients who come in for advice. We talk about the way in which we relate to our shareholders. It's a rare company because so many companies are only driven by financial outcomes. This company is driven by a social commitment, a heart, that not only deals with those who have gone before us but tries to ensure that their wills are going to be properly administered for years to come. We think about those who benefit from their philanthropy. And we also balance that up about and with the needs of our shareholders. It is an extraordinarily good company. It's not the fastest growing. It's not necessarily a company that attracts great attention. But it has existed for 132 years on the values on which the company was founded so many years ago. It was there as a matter of trust: to look after those who have gone before, to look after those who remain and to provide for those in the future. So when I say it has been a privilege, it has been a privilege for 2 reasons: one, to be reconnected with a relative I had no idea about; but secondly, to be reinforced in this extraordinary commercial area in which we live that there's more to life than just money, and there's more to life than just profit. There is a social responsibility, but that social responsibility can only be built upon trust. My great-grandfather, as I said, was the longest-serving director. He died in office at 69. It was the age that I took over the chairmanship of this company. And I'm very happy to report, as you can obviously see, that I have survived. Can I now just reflect on one of my colleagues who is also retiring, Alice Williams? I said earlier that Alice has been on the Board now for 13 years. Alice has a prodigious mind. She served about -- just about every committee we have had. She has brought to Equity Trustees, given her experiences elsewhere, in government work and the private sector, a focus that I have rarely seen in any director of any company or government that I have led. She is going to be severely missed, her intellectual rigor. But she has been, throughout my period here, the most wonderful contributor who is never worried about time, who has always brought more to the job through her own experiences and the personality than is demanded of her. She has been financially analytical. She's been terribly respectful of the wishes of the communities that we serve here at Equity Trustees. And that is exampled by her work because she serves on the Alfred Felton Bequest Committee, which, of course, is one of our most important and long-standing, impactful philanthropic trusts. So Alice, with me, walk the plank at the end of this meeting. To you, Alice, on behalf of the Board, on behalf of those who have gone before, on behalf of those who are still clients and shareholders of Equity Trustees and on behalf of the staff, I thank you and the Board thanks you. The company will miss you. Finally, succession is very important in any organization. And the Board has worked on my succession now for some time. As I indicated to you earlier, the Board has decided, in looking at our future, needs now and then, that Carol Schwartz, who joined our Board earlier this year, will succeed me as Chairman. I have no doubt that Carol's extensive professional experience, including her nonexecutive role, the Reserve Bank of Australia, her deep integrity will serve this company well. She brings a range of different skills to the Board of Equity Trustees, but they are the skills I think we need in a world that is increasingly changing. Governance. Governance, good governance is perhaps the most important responsibility of any Board. And I would like to think that after 12 years here with Equity Trustees and handing over now to Carol as my successor, together with the skills of the Board members that currently exist, that good governance will continue to walk hand in hand with Equity Trustees for very many years to come. I thank you all. I wish you well. I now declare this meeting closed and trust that I will see you all again next year as a shareholder. Have a good day.