Ethics and Governance Report: Abacus Property Group Analysis

This report provides a detailed overview of Abacus Property Group, examining its board orientation, corporate governance, and stakeholder management. It begins with an executive summary and introduction, outlining the company's operations in property investment. The report delves into the company's structure, including its board composition, key stakeholders, and shareholders. It analyzes how the company retains its stakeholders and shareholders, along with its corporate governance practices. The report also explores the board orientation, corporate governance, and business policies of the company, and how the company has sustained its success in the property investment market. The report analyzes the company's communication using the legitimacy theory and concludes with a summary of the findings.

Running head: ABACUS PROPERTY GROUP
Abacus Property Group (ABP)
Name of the student:
Name of the organization:
Name of the Author:

1
ABACUS PROPERTY GROUP
Executive summary
In this report a brief overview of Abacus Property Group has been done which shows a board
orientation and the composition of the company. Abacus Property Group is a well-established
company that deals in property investment. The various ways by which the group has retained its
various stakeholders and shareholders of the company have also been discussed in this report.
The corporate governance of the company has been presented in a detailed manner in this
report. A detailed description of the board orientation of the company shoes the various ways the
company operates its business and the reason for their success in the property investment market.
The various segmentations of the company have also been depicted in the report, giving us a
brief idea of the corporate governance of the company. The report has been concluded by
interpreting the communication of the company using the legitimacy theory.

2
ABACUS PROPERTY GROUP
Table of Contents
Introduction..........................................................................................................................3
Introduction and summary of the company.........................................................................3
Summary of corporate governance......................................................................................5
Board orientation.................................................................................................................6
Interpretation of the company using legitimacy theory.....................................................15
Conclusion.........................................................................................................................16
Reference list.....................................................................................................................18

3
ABACUS PROPERTY GROUP
Introduction
The main purpose of the report is to have a clear idea of the corporate governance and the
business policies which has been followed by Abacus Property Limited. The reasons for the
success of the company in the property investment market has been discussed in the report. For
providing a detailed summary of the company, the last annual report which has been issued by
the company has been referred. The annual report of the company gave a detailed idea about the
structure of the company which includes its board structure, the various stakeholders and the
shareholders of the company. By applying the legitimacy theory, it has been found out how the
company has sustained over the years and have been constantly improving in the property
investment market. The outcome of the report is to have a detailed idea about the various ethics
and the policies which need to be followed by a company for ensuring their stronghold in a
particular market. Abacus Property Solutions has been very successful in its growth owing to its
board structure and corporate governance and following the various norms and policies of the
government.
Introduction and summary of the company
Abacus Property Group is an Australian Real Estate Investment (REIT), concentrating in
the sectors of office and self-storage. The company capitalizes in the real estate for delivering
long term returns, and the company also ensures that the security holder value is maximized. The
critical focus of Abacus is to become a robust asset-backed group by following the annuity-style
of the business model where the investments are directed to the various assets of the company
which in turn ensures the creation of value and enhances the growth of income. The critical
enablers for the marketing strategy of the company are marketing insight, repositioning
capabilities along with strategic partnering (Abacus Property Group, 2019). Abacus Property
Group is a combination of Abacus Group Holdings Limited, Abacus Storage Operations Limited,

4
ABACUS PROPERTY GROUP
Abacus Group Projects Limited, Abacus Income Trust, Abacus Trust, and Abacus Storage
Property Trust. The shares and the entities of these groups are all combined, and they trade as
one single unit under Abacus Property Group (Abacus Property Group, 2019). The company was
established in 1996 and came under the list of ASX in 2002. At present, the company is listed at
S&P/ASX 200 index with a solo corporate office in Sydney, Australia (Abacus Property Group,
2019). By February 2017, Abacus Property Group has a total asset of $2.4 billion along with an
effective third party investment stage which has deposited over $1.4 billion of property resources
along with its capital associates. In the financial year of 2017, Abacus Property Group made a
record turnover of $186.8m which was an increase of 50 percent than the previous year. This
profit was a combination of returns from the group, which mainly included the sectors of
commercial, housing development businesses, and self-storage. The Employees' Pension Scheme
(EPS) of the company increased by 46 percent (Abacus Property Group, 2019). The overall
tangible asset of the company also increased by 13.5 percent. In 2018 July, Director Dr. Frank
Wolf retired from his position after serving for 21 years. Dr. Wolf’s position was taken up by
Mr. Steven Sewell who has been associated with the company since October 2017 as the
Managing director of the company. Dr wolf has been the director of the company for eleven
years. In the same year, Dr. Wolf died while fighting with prolonged cancer. He was also the co-
founder of the company. Abacus Property Group specializes in investments on the various
opportunities relating to the central plus properties of Australia. The overarching approach of
Abacus is to finance in the properties which give maximum capital-output and adds openings
that will be helping in the future to fulfil the various needs of the security holders. The main
objective of the investments done by the group is in providing maximum value to the various
investors associated with the company. To implement these factors, Abacus applies their

5
ABACUS PROPERTY GROUP
particular knowledge, the market position of the property as well as the track record of the
property they are going to invest in. The track record of the company has shown that the group
manages the acquired properties with active management for enhancing their wealth growth.
Summary of corporate governance
The corporate governance of the company ensures the objectives of the Abacus Property
Group by monitoring the various risks as well as assess how the performance of the company is
optimized. The tactic of the group for corporate governance aligns with the Corporate
Governance Principles which has been implemented by the ASX Corporate Governance Council.
The ASX Corporate Governance Council has been applied to promote the confidence of the
investors of the company and assisted the listed entities to achieve the expectations of the
shareholders associated with a company.
The board charter which has been issued by the company at the end of 2018 sets the role
of the board of the company within the structure of the governance of the company. The
composition and the responsibilities of the board members of the company are conducted in
agreement with the governance principles. According to the board charter, the board of the
company must comprise of at least a minimum of three directors and a maximum of four
directors at any time. The board of the company consists of a maximum number of non-
executive members in comparison to executive members of the board. The non-executive
members of the company do not receive any kind of extra retirement benefits from the company
and they are not even allowed to join in any kind of incentive program implemented by the
company. The chairperson of the company, J. Thame is an independent non-executive director of
the company.

6
ABACUS PROPERTY GROUP
The remuneration report of Abacus Property Group shows the suitable arrangements
which have been done by the company for the directors and the executives of the company in
accordance with the Corporations Acts and Regulations. The nomination and remuneration
committee which has been appointed by the company works towards recommending the board
for the various remuneration arrangements for the executive directors as well as the non-
executive directors of the company. The remuneration policy which has been implemented by
the company works toward supporting the company in their overall objectives for the production
of various maintainable earnings by continuing their development in the security worth. The
remuneration committee of the company ensures that the company fulfills its goals and visions
which has been set for the upcoming year. The total remuneration level of the company is
assessed in accordance with the market position, in accordance with advanced rewards which is
justified by the performance of the company. The policy framework of the company has been
designed in such a way that the interest of the security holders and the executives of the company
are aligned (Abacus Property Group, 2019). The company also uses variable remuneration policy
which helps the company to ensure its sustainability of the underlying profit which helps in
covering the distribution level of the company with respect to the security price of the company.
The company makes sure that the use of secure and adjustable remuneration is aligned with the
betterment of the company and to reach its goals and visions in the long run. The remuneration
policy of the company has been implemented to facilitate the growth of the company in the
business structure they are operating in. the volatile customers of the company are not valued in
the remuneration structure of the company by the long term investors of the company. This
results in the remuneration not being enormously incentive leveraged.

7
ABACUS PROPERTY GROUP
Board orientation
Orientation Broad Composition Broad Focus
Key
communications
Shareholder-Agency The big shareholders of
the Abacus Property
Group instill power over
the company. In smaller
companies, the insiders
often own huge chunks
of the company but for
bigger companies, they
have an institution as
their shareholders. With
the huge capitalization of
AU$2.5b, Abacus
property id fairly of huge
size, which makes it
available on the radar of
institutional shareholders.
The institution owns a
majority of the shares of
the company.
Institutional
leaders mainly
focus on buying
larger company
shares under
their benchmark
status. The
institutional
shareholders
compare their
returns with the
company returns
before buying
the shares of the
company. The
institutional
investors own 16
percent shares of
the company
which depicts
the credibility of
The remuneration
committee
recommends ideas
to the board of the
company for the
election of the
executive and non-
executive directs of
the board. The
remuneration policy
followed by the
company supports
the overall
betterment of the
company by
providing
sustainable earnings
and keep on growing
in the aspect of
security value. The
total revenue of the

8
ABACUS PROPERTY GROUP
the professional
investors. The
management of
the company
answers to the
board of the
company. The
insider group of
the company
owns less than
one percent of
the company
shares. With the
company being
huge in size, the
board members
of the company
own a good
amount of hares
of the company.
The board
members of the
company own
company at the end
of 2018 was
$307,917,000. The
net income of the
company after
paying the taxes was
$246,958,000 and
the remaining profit
of the company at
the end of 2018 was
$ 246,958,000
(Abacus Property
Group,2019). The
increase in six
percent of the assets
of the company
showed that the
equity of the group
is responsible for the
income of the
company.

9
ABACUS PROPERTY GROUP
around
AU$4.2m of
shares of the
company (Smith
et al.,2017).
Shareholder-
Stewardship
The various institution
which owns the
maximum shares of the
company understands the
need for keeping the
company on track. Since
the loss of the company
will directly affect their
investment outcome. The
board of company along
with the various other
chairpersons have been
keeping the company on
track for a long time and
will be continuing to do
so in the future.
The company
looks forward to
owning the
various assets
which will be
providing them
strong cash-
backed capital.
The keep invests
in the properties
which show
diversified
portfolios by
providing
enhanced capital
growth benefits
for the company.
The markets of
The various sources
of the cash flows of
the company are the
various operating
activities of the
company like the
investment
activities, financing
activities.

10
ABACUS PROPERTY GROUP
Sydney and
Melbourne have
been very
crucial for the
company by
delivering
exceptional
scope for the
growth of the
company in the
area of net
profit.
Stakeholder-
Managerial Branch
As the company keeps on
growing it ensures that its
policies and its practices
also improve which helps
the various stakeholders
of the company
understand the
commitment of the
company and the
approach of the company
towards sustainability.
The various
powerful
stakeholders of
the company
operate in a
manner that
supports the
sustainability
commitment of
the group. The
stakeholders of
The company
interacts with the
stakeholders of the
company for
understanding the
impact of the
company on both
inside and outside
the company
premises.

11
ABACUS PROPERTY GROUP
The company takes full
responsibility for all the
various stakeholders of
the company and the
environment in which the
company operates.
the company are
interested in
having clear
disclosure of the
interaction
between them
and the
company. The
stakeholders
engaged with the
company wants
to know and
understand the
key concerns
and the
engagement of
the company.
Stakeholder-Ethical
Branch
The various stakeholders
of the company are the
contractors, managing
agents and the employees
of the company. The
diverse system of the
The company
operates regular
surveys by
engaging the
various
stakeholders of
Different volunteer
days are conducted
by the company for
deaf and blind
children of the
country. During