Commonwealth Bank of Australia

Transcription

1 Commonwealth Bank of Australia Board Charter 1. Introduction 1.1 This Charter outlines the role, responsibilities and composition of the Board of the Commonwealth Bank of Australia (CBA or Bank) and the manner in which it discharges its responsibilities for CBA and its subsidiaries (Group). 2 Role of Board 2.1 The role of the Board is to appoint the Chief Executive Officer (CEO), set the strategic objectives of the Bank, and oversee the management, performance and governance frameworks of the Bank. In carrying out its role the Board is expected to: Have regard to the interests of the Bank s customers, shareholders, employees and the broader community in which the Bank operates; Act ethically; and Operate in accordance with the CBA Constitution, this Charter, the Board Corporate Governance Guidelines, relevant CBA policies and applicable legal and regulatory requirements. 3. Responsibilities of the Board 3.1 In fulfilling its responsibilities the Board may, and has, delegated certain matters. The matters delegated to the Board Committees are described in the Committee Charters, and those delegated to the CEO are described below in Section In addition to the matters required by law to be fulfilled by the Board, the Board has reserved the following matters, and is responsible for: Strategy, Performance and Culture 3.3 Setting, with input from management, and approving, the strategic and financial plans to be implemented by management. 3.4 Overseeing the business of the Bank, by: Approving major corporate initiatives; Approving the undertaking of new business ventures in new countries or new industries; Approving capital expenditure for investments and divestments, and operational expenditure, that exceed the limits delegated to the CEO; and Monitoring the performance of management directly and through its Board Committees. 3.5 Monitoring the culture (including risk culture) of the Group through policies, processes, systems and people, and any management action plans for cultural change. 1 Commonwealth Bank of Australia

2 Risk Management 3.6 Overseeing the risk management framework and its operation by management. 3.7 Setting the Group s risk appetite, within which the Board expects management to operate, and approving the Group Risk Appetite Statement. 3.8 Approving the Risk Management Approach and any key risk frameworks and policies for managing financial and non-financial risks that require, or are reserved for, Board approval. 3.9 Overseeing the management of strategic risk and risk to the Group s reputation Assessing and forming a view on risk culture, and monitoring any actions desirable to change the risk culture Receiving from management material correspondence from regulators and reports on management s interactions with regulators, as well as maintaining open and constructive relationships with regulators Making an annual Risk Management Declaration to the Australian Prudential Regulation Authority (APRA) as required under prudential standards. Capital, Funding and Liquidity 3.13 Reviewing and approving capital management: Initiatives, including payment of dividends, share issues, buy backs and capital returns; and Policies and processes, including the Internal Capital Adequacy Assessment Process, the Group Capital Policy and the Recovery and Resolution Plan Reviewing and approving the Annual Funding Strategy, Contingent Funding Plan and Group Liquidity Risk Management Policy. Financial Reporting 3.15 Approving the Group s half and full-year financial statements and reports, and the half and fullyear financial reports required by APRA. External Auditor 3.16 Considering the appointment, and removal, of the Bank s External Auditor for shareholder approval. The CEO and Management 3.17 Appointing and assessing the performance (in conjunction with the Nominations and Risk Committees) of the CEO and determining any payments on cessation of employment Approving the appointment of the senior direct reports to the CEO and reviewing the CEO s assessment of their performance Overseeing succession planning for the CEO and the senior direct reports to the CEO. Remuneration and Performance 3.20 Approving the executive remuneration framework and principles and the Group Remuneration Policy Approving the remuneration arrangements and outcomes for the CEO, the senior direct reports to the CEO and other individuals specified in the Group Remuneration Policy, following an assessment of performance and risk behaviours. 2 Commonwealth Bank of Australia

3 3.22 Approving new, or material amendments to, performance management frameworks, variable remuneration plans, employee equity plans, employee superannuation and pensions, and benefits of material value to employees Determining the fees payable to directors within the shareholder approved fee pool limit. Diversity 3.24 Approving the Bank s Diversity Policy, and setting, and annually assessing, measurable objectives in relation to diversity and progress against achieving them. Corporate Responsibility 3.25 Approving the corporate responsibility strategy and monitoring the effectiveness of the strategy Reviewing and approving the corporate responsibility disclosures to be included in the Annual Report and corporate responsibility policies that require, or are reserved for, Board approval. Governance 3.27 Overseeing appropriate corporate governance frameworks for the Group Approving the Bank s: Corporate Governance Statement; Governance policies that require, or are reserved for, Board approval and overseeing the implementation of systems and processes for compliance with those policies; and Responsible Persons as required under the Group Fit and Proper Policy Overseeing the authorities delegated to the CEO Approving the suitability of a proposed director to be registered as an Accountable Person 1. Work Health and Safety 3.31 Overseeing and monitoring work, health and safety performance framework issues. Other Matters 3.32 Other matters specifically reserved by the Board as set out in Committee charters and any other matters designated by the Board from time to time Approving any documents required by the Bank s Constitution, legislation or regulation to be approved by the Board. 4 Role and Responsibilities of Chief Executive Officer 4.1 The Board has delegated the management of the Bank to the CEO. Except for any specific powers reserved by the Board or delegated to its Committees or an individual director, the CEO may make all decisions and take any necessary action to carry out that function. The CEO is accountable to the Board in exercising this delegated authority. 4.2 In the management of the Bank, the CEO s responsibilities include, among other matters: Implementing the strategic and financial objectives of the Bank Instilling in the Bank a culture which aligns to the Bank s values. 1 As defined in the Banking Executive Accountability Regime implemented by the Banking Act Commonwealth Bank of Australia

4 Analysing the impact on the strategic objectives and financial position, when: allocating the Bank s resources or capital; approving expenditure; or making major financial decisions Assessing reputation consequences of decisions or actions taken by the Bank Implementing systems to manage the operations of the Bank. 4.3 The CEO is responsible for ensuring the timely preparation, presentation, adequacy and integrity of information provided to the Board, to enable the Board to carry out its responsibilities. 5 Role and Responsibilities of the Chairman 5.1 The Chair is an independent non-executive director and is appointed by the Board. The Chair cannot have been the CEO of the Bank at any time in the previous three years. 5.2 The Chair s principal responsibilities are to lead the Board and oversee the processes for the Board s performance of its role in accordance with this Charter. 5.3 The Chair has specific responsibilities to: Represent the views of the Board and the Bank to stakeholders including, shareholders, regulators and the community Maintain a regular dialogue with the CEO and management, serving as the primary link between the Board and management Liaise with the CEO in relation to the Board s information requirements to assist the Board with effective decision making. 6 Composition of Board Structure and Composition 6.1 The size and composition of the Board is determined in accordance with the CBA s Constitution, any applicable laws and regulations. 6.2 The Board assesses the appropriate mix of skills, experience, expertise and diversity required, and the extent to which they are represented on the Board (through, among other things, the use of a Board skills matrix). Independence 6.3 It is the Board s intention that the CEO is the only executive director and that all nonexecutive directors are independent. 6.4 The Board assesses, at least annually, the independence of each director in accordance with the independence standards adopted by the Board. Board Renewal and Tenure 6.5 The Board manages non-executive director succession in accordance with its renewal and tenure policies. 6.6 The Board appoints directors to fill casual vacancies on the Board and makes recommendations to shareholders in respect of the election or re-election of directors. The Board takes into account the results of individual performance reviews of directors in making its recommendations of the directors standing for re-election. 4 Commonwealth Bank of Australia

5 7 Induction and Continuing Education 7.1 All non-executive directors undertake an induction program. 7.2 Director education is conducted regularly and is incorporated into the annual Board calendar. 8 Board Meetings 8.1 The Board will meet as often as is necessary to fulfil its responsibilities. 8.2 The presence of one half of the members of the Board (rounded upwards if not a whole number) will constitute a quorum. 9 Board Committees 9.1 The Board may establish committees of directors it considers necessary to assist it in carrying out its functions. The standing committees of the Board are: Audit Committee Risk Committee Remuneration Committee Nominations Committee. 9.2 The Board will determine, and review as appropriate, Committee memberships and charters. 9.3 Minutes of all Committee meetings are circulated to all directors and Chair s provide verbal reports on Committee business at the next Board meeting. 9.4 The Board is able to form ad-hoc Committees for special purpose business. 10 Company Secretary 10.1 The Company Secretary is accountable to the Board, through the Chair, on matters relating to the proper functioning of the Board All directors have direct access to the Company Secretary. 11 Access, Reliance and Advice 11.1 The Board has free and unfettered access to senior management, any other relevant internal and external party and information, and may make any enquiries to fulfil its responsibilities The Board may obtain independent advice at the Bank s expense, including by engaging and receiving advice and recommendations from appropriate independent experts Board members are entitled to rely on information and advice provided by management of the Bank on matters within their responsibility, and on the expertise of independent experts, as long as they are not aware of any reasonable grounds where such a reliance is inappropriate. 12 Declaration of Interests 12.1 Directors are required to take all reasonable steps to avoid actual, potential or perceived conflicts of interests and declare them to the Chair and the Board if they arise. 5 Commonwealth Bank of Australia

6 13 Board Performance and Charter Review 13.1 The Board will annually assess its performance (including having an external review every three years) and has processes in place to review the performance of its Committees and individual directors The Board will review the adequacy of this Charter at least every two years. 14 Other 14.1 Directors of the Board will be available to meet with APRA on request. Charter Approved: June Commonwealth Bank of Australia