Introduction

The Commonwealth Bank of Australia (Bank) and its related bodies corporate (collectively, Group) is committed to creating long-term value sustainably through improving the financial wellbeing of our customers and communities.  The Bank is focused on strengthening its governance to achieve better customer and risk outcomes.

The Bank’s corporate governance arrangements and practices are regularly refined in light of new laws, evolving stakeholder expectations and the dynamic environment in which the Bank operates.

The Corporate Governance Statement describes the key governance arrangements and practices of the Group, current at 8 August 2018.  These arrangements and practices followed the recommendations set out in the third edition of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations during the year ended 30 June 2018.

Culture

The Bank is focused on shaping a more accountable culture that not only supports the achievement of business strategies, but also drives decisions that are lawful, ethical and responsible, and that lead to better customer and risk outcomes.

Purpose and values

The Bank’s purpose is to improve the financial wellbeing of our customers and communities.  Our values are:

  • We do what is right;
  • We are accountable;
  • We are dedicated to service;
  • We pursue excellence; and
  • We get things done.

Policies

The Bank’s policies play a central role in setting decision-making rights and conduct expectations across the Group. The Bank is strengthening the governance of our policies, as well as making them simpler and easier to understand. Key policies imposing conduct standards follow.

Code of conduct

The Bank’s code of conduct, titled “Our Commitments”, articulates the standards of behaviour expected of our people, including Directors, senior executives and employees, when engaging with, and balancing the interests of, the Bank’s stakeholders.  An evolved Group Code of Conduct will be launched in the coming months.

Whistleblower protection

The Bank is committed to a culture that encourages our people and others to speak up about issues or conduct that concerns them.  The Group Whistleblower Policy outlines the actions taken to protect a whistleblower from any retaliation or victimisation, including protection from termination of employment, harassment and discrimination.  It is aligned with the Australian Bankers’ Association’s “Guiding Principles – Improving Protections for Whistleblowers”, and is summarised here.

Anti-bribery and corruption

The Bank is committed to embedding a zero appetite culture for bribery, corruption and facilitation payments across our business.  Our Anti-Bribery and Corruption Policy requires all parts of the Group to:

  • consider, identify and understand the bribery and corruption risks within their operations;
  • apply controls to those risks and monitor key risk indicators;
  • implement an assurance program to test the control environment’s ongoing effectiveness under the policy; and
  • ensure transparency in their dealings and to conduct appropriate due diligence on their business partners.

A summary of the policy can be found here.

Conflicts of interest

The Bank’s Conflicts of Interest Policy is designed to ensure that actual, perceived or potential conflicts of interests are identified, managed or prevented.  The policy outlines the organisational and administrative arrangements that have been put in place to support the identification and management of conflicts of interest.  A summary of the policy is available here.

Securites trading

The Group Securities Trading Policy sets out when our people and their associates may deal in Group securities.  The policy prohibits:

  • dealing in Group securities when in possession of inside information;
  • hedging or otherwise limiting economic risk, in relation to unvested rights or shares acquired under any of the Group’s employee incentive plans; and
  • certain specified persons and their associates from dealing in securities issued by the Bank or any Group subsidiary, except during certain periods.

Slavery and human trafficking

During the 2018 financial year, the Group published its second Slavery and Human Trafficking Statement which disclosed the actions taken by the Group to prevent slavery and human trafficking in our business and supply chain during the year ended 30 June 2017.  The statement is intended to comply with the requirements of the UK Modern Slavery Act. 

Risk management

The Group is exposed to both financial and non-financial risks, and is committed to having risk management policies, processes and practices that support a high standard of governance. 

The Group’s Risk Management function has designed, and oversees implementation of, a Risk Management Framework (Risk Framework) to allow the Group to manage risks within a Board-approved risk appetite.

The Risk Framework covers all systems, structures, policies, processes and people that identify, measure, evaluate, monitor, report and control or mitigate both internal and external sources of material risk.  It incorporates three key documents: the Group’s Risk Appetite Statement, the Group’s Risk Management Approach, and the Group’s Strategic Business Plan.

The Risk Framework is regularly reviewed in light of emerging risks arising from the changing business environment, better practice approaches, regulatory and community expectations. 

Stakeholder Engagement

The Bank is committed to providing better outcomes for customers, earning back the trust of communities, responsibly rewarding our people and delivering sustainable, long-term value to shareholders.

Customers

The Bank engages with customers in numerous ways, including through customer feedback and complaint channels, surveys and workshops, customer representative bodies, and external dispute resolution bodies.  Customers can also contact us via phone, electronically or post.

The Group has a customer advocate function to strengthen accountability for fair customer outcomes and offer a more customer-oriented approach to the Group’s business.

Community

Engagement with the Bank’s communities provides insights into improving services and products to meet changing societal needs.  The Bank engages with community organisations and members through direct and indirect channels, including external advisory panels, industry memberships, meetings, and support of events and summits.

Our people

The Group recognises the value of a diverse workforce and the need for our people to reflect our customers and local communities. The Group is committed to creating and maintaining an inclusive workplace culture that will provide sustainability for the organisation into the future.

This commitment is articulated in the Group’s Diversity and Inclusion Policy and extends to all areas of our business, including recruitment, talent development and identification, appointment to roles, Board appointments, retention of employees, promotions, performance assessment, mentoring and coaching programs, flexible work arrangements, forms of leave available to employees, succession planning, learning and development, and the Group’s other policies and procedures.

The Diversity and Inclusion Policy acknowledges that the Board sets measurable objectives for diversity, including gender diversity. The policy requires the Board to assess those objectives annually, as well as the progress in achieving the objectives.

More information on the Group’s approach to diversity and inclusion is available here,  together with copies of the Bank’s Accessibility and Inclusion Plan 2017-2020 and Reconciliation Action Plan 2017-2019.

Shareholders

The Bank seeks to provide shareholders with information that is timely, of high quality and relevant to their investment.  The Bank is committed to listening and responding to shareholder feedback.

An investor relations program facilitates two-way communication between the Bank and shareholders, and fosters participation at shareholder meetings.  The program incorporates a number of ways in which shareholders can access information and provide feedback.

Reporting

Key shareholder communications include the Group’s Annual Report, full-year and half-year financial results and quarterly trading updates.

Disclosure

The Bank takes its continuous disclosure obligations seriously.  All material information is released to the ASX in compliance with the Bank’s continuous disclosure obligations under the Corporations Act 2001 and the ASX Listing Rules.

The Bank has a written policy for complying with these disclosure obligations.  The Continuous Disclosure Policy was reviewed and updated during the 2018 financial year.

Annual General Meetings

The Bank recognises the importance of shareholder participation in meetings.  Shareholders are strongly encouraged to attend, and participate in, the Bank’s AGMs.  The location of AGMs are rotated between capital cities to facilitate shareholder attendance.

The Bank also encourages shareholders to submit their questions ahead of AGMs, as they provide useful insights into shareholder concerns and enable the Bank to provide relevant feedback.

Electronic communications

Shareholders are encouraged to communicate with the Bank electronically and a contact email address is provided on the Investor Centre for this purpose.  Shareholders are also encouraged to provide the Bank’s share registry, Link Market Services, with their email addresses, so that the Bank may communicate electronically about relevant matters, including AGMs, Annual Reports and dividend payments.  Link Market Service’s contact details are provided on the Investor Centre.

Board Composition, Performance and Committees

Board’s Role and Responsibilities

The Board appoints the CEO, sets the strategic objectives of the Bank with input from management, and oversees the management, performance, remuneration and governance frameworks of the Group.

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 action necessary to manage the Bank.  Notwithstanding the delegations by the CEO, the CEO is accountable to the Board for the exercise of the delegated powers and management’s performance. 

The Board’s role and responsibilities, including matters specifically reserved to it, are set out in the Board Charter.

Board Composition

The Board’s approach to its composition and renewal emphasises the need for:

  • Skills, expertise and experience: The Board seeks to have an appropriate mix of skills, expertise and experience to enable it to deal with current and emerging opportunities and issues, and to effectively review and challenge the performance of management.
  • Independence: The Board considers that all of its Non-Executive Directors, including the Chairman, were independent during the 2018 financial year.
  • Diversity: The Directors on the Board represent a range of nationalities and backgrounds.  Gender diversity is also a priority, with the Board setting and achieving a gender diversity objective of 40% female representation by 2020 for itself. 
  • Tenure: The Board balances longer-serving Directors with a deep knowledge of the Bank’s operations and history, and new Directors with fresh perspectives.

Current membership of the Board is set out below:

  • Catherine Livingstone AO - Independent Non-Executive Director (Chairman)
  • Matt Comyn - Executive Director
  • Shirish Apte - Independent Non-Executive Director
  • Sir David Higgins - Independent Non-Executive Director
  • Brian Long - Independent Non-Executive Director
  • Andrew Mohl - Independent Non-Executive Director
  • Mary Padbury - Independent Non-Executive Director
  • Wendy Stops - Independent Non-Executive Director
  • Anne Templeman-Jones - Independent Non-Executive Director
  • Rob Whitfield - Independent Non-Executive Director

Details of the Directors’ respective experience and qualifications can be viewed here.

Constitution

The Bank’s Constitution, incorporating amendments up to and including all amendments passed at the Annual General Meeting on 13 November 2008, is available here.

Board Committees

The Board has four principal committees that assist it in carrying out its responsibilities.  These are listed below and the Charters can be accessed from the following links:

Current membership of each Board Committee is as follows:

  • Nominations Committee: Catherine Livingstone AO (Committee Chairman), Brian Long, Mary Padbury and Rob Whitfield
  • Audit Committee: Brian Long (Committee Chairman), Shirish Apte, Catherine Livingstone AO, Wendy Stops and Anne Templeman-Jones
  • Risk Committee: Shirish Apte (Committee Chairman), Sir David Higgins, Catherine Livingstone AO, Brian Long, Andrew Mohl and Rob Whitfield
  • Remuneration Committee: Sir David Higgins (Committee Chairman), Catherine Livingstone AO, Andrew Mohl, Mary Padbury and Wendy Stops


Further information on the Group’s key governance arrangements and practices is set out in the 2018 Corporate Governance Statement.