Introduction

The Commonwealth Bank of Australia (Bank) and its related bodies corporate (collectively, Group) is committed to our strategy of becoming a simpler better bank, to fulfil our purpose of improving the financial wellbeing of our customers and communities.

The Bank’s corporate governance arrangements and practices are regularly reviewed and refined in light of new laws and regulations, 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 as at 7 August 2019.  These arrangements and practices met all of the requirements of the third edition of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (Recommendations) during the year ended 30 June 2019. In addition, the Group’s governance arrangements and practices already comply with a number of the new recommendations and suggestions in the fourth edition of the Recommendations. 

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 outcomes for our customers and stakeholders.

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

Policies play a key role in guiding decision making and conduct across the Group. To ensure that the Bank’s policies are fit-for-purpose, we have enhanced the Group’s policy framework and embarked on a comprehensive review of all policies and supporting procedures. 

Code of conduct

The Group's Code of Conduct articulates the standards of behaviour expected of our people when engaging with, and balancing the interests of, the Bank’s stakeholders. The Code connects our purpose, values expectations (with a ‘Should We?’ test) and key Group policies to help deliver the right outcomes.

Whistleblower protection

The Bank is committed to a culture that encourages our people and others to speak up on matters or conduct that concerns them. The Group Whistleblower Policy outlines the protections provided by the Group to protect a whistleblower from any form of retaliation or victimisation, including termination of employment, harassment and discrimination.

Anti-bribery and corruption

The Group is committed to embedding a zero tolerance appetite for bribery, corruption and facilitation payments. An Anti-Bribery & Corruption (AB&C) framework, comprising a Group AB&C Policy and Standard has been created to:

  • formally acknowledge the serious nature of bribery & corruption;
  • prohibit the giving of bribes or other improper benefits to public officials;
  • identify potential risks and appropriate controls around offering or accepting gifts, entertainment or hospitality;
  • require all parts of the Group to identify and understand the bribery and corruption risks relative to their operations, and implement relevant controls; and
  • outline the requirements for escalating and reporting AB&C policy breaches.

Diversity and Inclusion

The Group Diversity and Inclusion Policy outlines our approach and commitment to diversity and inclusion. The Policy states the expectations of leaders to deliver a workplace that is safe and inclusive, where all of our working parents feel supported, flexible work practices are encouraged and everyone is free from unlawful discrimination, bullying and harassment.

Fit and Proper

The Group Fit and Proper Policy addresses the requirements of APRA Prudential Standards CPS and SPS 520 and requires all persons appointed to a Responsible Person role (including Directors) to satisfy the fit and proper requirements prior to their initial appointment, and be re-assessed annually or at any time information which may affect their fit and proper status becomes known.

Conflicts Management

The Group Conflicts Management 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.

Securities 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; and
  • hedging, and undertaking other dealings such a short -term trading and margin lending.

It also prohibits certain specified persons and their associates from dealing in Group securities except during limited ‘trading windows’.

Slavery and Human Trafficking

During the 2019 financial year, the Group published its latest Slavery and Human Trafficking Statement which discloses the actions taken by the Group to prevent slavery and human trafficking in our business and supply chain. The statement complies 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. This enables management to undertake prudent risk-taking activities.

The Group’s Risk Management function designs and oversees 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 Business Plan.

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

Stakeholder Engagement

  • We seek to engage with our stakeholders to strengthen our partnerships with them and enhance our community participation.  This is essential, especially during a time when the Bank is focused on rebuilding trust.

Our approach to stakeholder engagement is guided by the AA1000 Accountability Stakeholder Engagement Standard and our Stakeholder Engagement Approach.

Customers

We engage with our customers through customer feedback, surveys and workshops, customer representative bodies, complaint channels and external dispute resolution bodies.

Our Customer Advocate function strengthens the Bank’s accountability for fair customer outcomes and offers a more customer-oriented approach.

Community

To deliver sustainable outcomes and financial wellbeing for our stakeholders, first we must understand the expectations of the communities in which we operate.

We engage with members of the community and community organisations through a variety of channels. For example, we participate in community events and forums, are members of industry associations and meet with Non-Governmental Organisations. The insights we gain in the process of our engagement help us continuously improve our products and services in light of evolving community expectations.

Our people

The Bank is committed to:

  • building a more inclusive and diverse culture;
  • supporting flexible work practices;
  • providing our people, regardless of gender or sexual orientation, with access to paid leave and other support to assist them with caring and family responsibilities; and
  • rewarding our people responsibly.

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 queries and feedback and a dedicated telephone number and email address are provided on the Investor Centre.

The Bank’s 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.

Corporate Reporting

The Audit Committee assists the Board discharge its responsibilities on matters relating to the external reporting of financial information for the Group.

The Group’s Policy on Publicly Issued Documents and Marketing Materials establishes the principles for an approval and verification process for public documents.

Disclosure

All market sensitive information is released to the ASX in compliance with the Bank’s continuous disclosure obligations under the Corporations Act and the ASX Listing Rules.

The Bank has a written policy for complying with its disclosure obligations. The Group Continuous Disclosure Policy was reviewed and updated in March 2019.

Annual General Meeting

The Bank recognises the importance of shareholder participation at our AGM. Shareholders are encouraged to attend and participate. The location of the Bank’s AGM is held in different locations to facilitate shareholder attendance.

The Bank also encourages shareholders to submit questions ahead of the AGM.

The Bank offers direct voting, allowing shareholders who are unable to attend the AGM to vote on resolutions without needing to appoint a proxy to attend or vote on their behalf. Additionally, the AGM is webcast live, enabling shareholders who are unable to attend the AGM in person, to view the AGM online.

Electronic Communications

Shareholders are encouraged to provide the Bank’s share registry, Link Market Services, with their email addresses, so that the Bank may communicate important information electronically.

Board Composition, Performance and Committees

Board’s Role and Responsibilities

The Board is responsible for setting the strategic objectives and risk appetite for the Bank, and for leading the culture, values and behaviours of our people. The Board appoints the Bank’s CEO. It also oversees the management, performance and Corporate Governance Framework of the Bank.

The Board delegates certain powers to its Board Committees. At its discretion, the Board may form other committees to undertake specific duties from time to time. The Board confers on the CEO the powers of the Board exercisable in management of the business of the Bank. The CEO, in turn, may delegate some of these powers to Group Executives and other officers under instruments of delegation. Despite any 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

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
  • Professor Genevieve Bell - Independent Non-Executive Director
  • Sir David Higgins - Independent Non-Executive Director
  • Paul O'Malley - 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 16 October 2019, 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), Paul O'Malley, Mary Padbury and Rob Whitfield
  • Audit Committee: Anne Templeman-Jones (Committee Chairman), Shirish Apte, Catherine Livingstone AO and Wendy Stops 
  • Risk Committee: Shirish Apte (Committee Chairman), Sir David Higgins, Catherine Livingstone AO, Anne Templeman-Jones and Rob Whitfield
  • People & Remuneration Committee: Sir David Higgins (Committee Chairman), Catherine Livingstone AO, Paul O'Malley, Mary Padbury and Wendy Stops


Further information on the Group’s key governance arrangements and practices is set out in the 2019 Corporate Governance Statement.