Corporate governance

Introduction

The Board has adopted a comprehensive framework of corporate governance guidelines, designed to balance properly performance and conformance. This enables the Commonwealth Bank of Australia (Bank) and its related bodies corporate (Group) to undertake, in an effective manner, the prudent risk-taking activities which are the basis of its business.

Throughout the 2016 financial year, the Group’s governance arrangements were consistent with the Corporate Governance Principles and Recommendations (3rd edition) published by the ASX Corporate Governance Council (ASX Principles). The Corporate Governance Statement outlines the key aspects of the corporate governance framework and compliance with the ASX Principles.

View 2016 Corporate Governance Statement

The Board

Charter

The Board’s role and responsibilities are set out in the Board Charter.

The Board carries out the legal duties of its role in accordance with the Group’s values of integrity, collaboration, excellence, accountability and service. It has regard to the interests of the Group’s customers, people, shareholders and the broader community in which the Group operates at all times.

View Board Charter.

Composition of the Board

The Board currently comprises ten (10) Directors of the Bank of which nine (9) are independent Non-Executive Directors and one is an Executive Director, being the CEO.

Details of the period of office, experience, qualifications, special responsibilities and attendance at meetings are set out in the Directors’ Report section on pages 38 to 44 of our 2016 Annual Report. Membership of the Board and Committees is set out below:

On behalf of the Bank, the Chairman provides a letter to each new Director upon appointment, setting out the terms of appointment and relevant Board policies. These include time commitment, code of ethics and continuing education. All current Directors have been provided with a letter confirming the terms of their appointment.

View form of letter of appointment.

Constitution

View Commonwealth Bank Constitution, incorporating amendments up to and including all amendments passed at the Annual General Meeting on 13 November 2008.

Board Committee Charters

The Board has adopted Charters for each Committee.

• Nominations Committee Charter
• Remuneration Committee Charter
• Audit Committee Charter
• Risk Committee Charter

Share Trading

The Board has adopted a Group Securities Trading Policy. Under that Policy, Directors are permitted to deal with the Group’s securities only within certain periods, as long as they are not in the possession of unpublished price-sensitive information.

View Group Securities Trading Policy.

Continuous Disclosure

Matters which could be expected to have a material effect on the price or value of the Bank’s securities must be disclosed under the Corporations Act and the ASX Listing Rules. The Group’s Guidelines for Communication between the Bank and Shareholders set out the processes to ensure that shareholders and the market are provided with full and timely information about the Group’s activities in compliance with continuous disclosure requirements.

View Group’s Guidelines for Communication between the Bank and Shareholders.

Codes of Conduct and Ethics

Our vision to excel at securing and enhancing the financial wellbeing of people, businesses and communities is underpinned by the Group’s values: integrity, collaboration, excellence, accountability and service. The Board carries out its legal duties in accordance with these values and having appropriate regard to the interests of the Group’s customers, shareholders, people and the broader community in which the Group operates.

Our people are expected to behave in a manner consistent with our values. The expectations of our people are also outlined in policies and codes of conduct that have been established by the Board and management.

The Board operates in a manner reflecting the Group’s values and in accordance with its Corporate Governance Guidelines, the Bank’s Constitution, the Corporations Act and all other applicable regulations.

The Board employs and requires at all levels impeccable values, honesty and openness. Through its processes it achieves transparent open governance and communications, and it addresses both performance and compliance.

The Board’s policies and codes include detailed provisions dealing with:

• The interaction between the Board and management to ensure there is effective communication of the Board’s views and decisions, resulting in motivation and focus towards long term shareholder value behaviours and outcomes;
• Disclosure of relevant personal interests so that potential conflict of interest situations can be identified and appropriate action undertaken to avoid compromising the independence of the Board; and
• Security dealings in compliance with the Group’s strict guidelines and in accordance with its values of integrity, collaboration, excellence, accountability and service.

Statement of Professional Practice

The Group’s code of ethics known as the Statement of Professional Practice, sets standards of behaviour required of all employees and Directors including:

• To act properly and efficiently in pursuing the objectives of the Group;
• To avoid situations which may give rise to a conflict of interest;
• To know and adhere to the Group’s Equal Employment Opportunity policy and programs;
• To maintain confidentiality in the affairs of the Group and its customers; and
• To be absolutely honest in all professional activities.

These standards are regularly communicated to the Group’s people. In addition, the Group Securities Trading Policy is designed to ensure that unpublished price-sensitive information is not used in an illegal manner for personal advantage.

People and Policies

The Group has implemented various policies, processes and systems to enable its people to carry out their duties in accordance with the Group’s values. These include:

• Workplace Conduct (EEO);
• Work Health and Safety;
• Recruitment and Selection;
• Performance Management;
• Talent Management and Succession Planning;
• Remuneration and Recognition;
• Employee Share Plans; and
• Supporting Professional Development.

Diversity

In late 2015, the Group set a global target to increase the representation of women in Executive Management and above roles to 40% by 2020. As at June 2016, there are 35.2% women in Executive Manager and above roles. Overall, women make up 58% of the Group’s workforce and 43.6% of them are in management roles.

In the senior leadership roles, women make up 30.8% of the Executive Committee and 33.3% of the Non-Executive Directors on the Board.  The Board has a target of 30% of Board seats to be held by women by the end of 2018.

The Group’s most recent Gender Equality Indicators, as defined in and published under the Workforce Gender Equality Act, can be viewed at www.wgea.gov.au

Information on the Group’s diversity strategy can be found in the Corporate Responsibility section on pages 33 to 37 of the 2016 Annual Report.

Workplace Responsibilities, Behaviours and Compliance

The Group is strongly committed to maintaining an ethical workplace, as well as complying with its legal and ethical responsibilities. The Group has various policies, standards and processes relating to workplace responsibilities, behaviours and compliance that apply to, and must be observed by Group employees.

In support of this, the Group has established a SpeakUP program comprising an independent and externally managed SpeakUP Hotline that encourages the Group’s people and suppliers to raise issues (anonymously, confidentially, or as a whistleblower) relating to suspected fraud or corruption, unlawful or improper workplace misconduct or issues generally impacting their wellbeing at work.