Corporate governance approach and principles

MQA’s approach to corporate governance

The MQA boards are committed to MQA’s achievement of superior financial performance and long-term prosperity, while meeting stakeholders’ expectations of sound corporate governance practices. This statement outlines MQA’s main corporate governance practices commencing 2 February 2010.

The boards determine the corporate governance arrangements for MQA. As with all its business activities, MQA is proactive in respect of corporate governance and puts in place those arrangements which it considers are in the best interests of MQA and its investors, and consistent with its responsibilities to other stakeholders. It actively reviews Australian and international developments in corporate governance.

In particular, the MQA boards have determined that MQA will be managed and operated consistently with the ASX Corporate Governance Principles and Recommendations as well as relevant and applicable provisions of the Macquarie Funds Management Policy the principles of which can be viewed on the Macquarie website (www.macquarie.com.au).

ASX Corporate Governance Principles

The ASX Corporate Governance Council (the Council) has Corporate Governance Principles and Recommendations (the ASX Principles) which are designed to maximise corporate performance and accountability in the interests of shareholders and the broader economy. The ASX Principles encompass matters such as board composition, committees and compliance procedures.

The ASX Principles (being those under ASX’s 2nd edition of Corporate Governance Principles and Recommendations dated August 2007) can be viewed at www.asx.com.au. The ASX Principles are not prescriptive; however listed entities (including MQA) are required to disclose the extent of their compliance with the ASX Principles, and to explain why they have not adopted one of the ASX Principles if they consider it inappropriate in their particular circumstances.

MQA’s corporate governance statement is in the form of a report against the ASX Principles. 2010 amendments to the ASX Principles have recently been introduced. MQA has elected to disclose against these updated ASX Principles in this statement notwithstanding the change in reporting requirements for the recent amendments will only apply to financial years commencing on or after 1 January 2011.

MQA’s corporate governance policies largely conform to the ASX Principles. Any deviation relates mainly to MQA being an externally managed vehicle. We have noted the differences in our reporting.