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Corporate governance

Introduction

The Commonwealth Bank of Australia (Bank) and its related bodies corporate (collectively, Group) is committed to high standards of corporate governance and has a corporate governance framework which supports its long-term performance and sustainability, and protects and enhances shareholder and other stakeholder interests.

The Bank regularly reviews its corporate governance arrangements and practices to ensure they reflect developments in regulation, market practice and stakeholder expectations.

Throughout the 2017 financial year (FY17), the Bank has followed the recommendations set out in the Corporate Governance Principles and Recommendations (3rd edition) published by the ASX Corporate Governance Council (ASX Principles). The Corporate Governance Statement outlines the key corporate governance arrangements and practices of the Group, current at 14 August 2017.

Shareholder Engagement

The Bank recognises its shareholders as its owners and values its communication with them. The Bank seeks to ensure that shareholders are provided with information that is timely, of high quality and relevant to their investment, and to listen and respond to shareholder feedback.

The Bank has an investor relations program to facilitate two-way communication with shareholders and to foster participation at shareholder meetings. The program incorporates a number of ways in which shareholders can access information and provide feedback.

Communications and Periodic and Continuous Disclosure

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

The Bank releases all material information to the ASX in compliance with its continuous disclosure obligations under the Corporations Act 2001 and the ASX Listing Rules.

Annual General Meetings

The Bank encourages shareholders to attend and participate in its Annual General Meetings (AGMs) and rotates the location of AGMs between capital cities to facilitate shareholder attendance.

The Bank also encourages questions from shareholders ahead of its AGMs, which provide useful insights into shareholder concerns and enable the Group to provide relevant feedback.

Electronic Communications

The Bank encourages shareholders to provide their email addresses so that the Bank may communicate with them electronically about relevant matters, including AGMs, Annual Reports and dividend payments. Shareholders may also send communications electronically to the Bank’s share registry.

Board Composition, Performance and Committees

Board’s Role and Responsibilities

The Bank’s board of directors (Board) is responsible for managing the Group’s business and is accountable to shareholders for performing that role.

The Board has delegated the day-to-day management of the Group’s business to the CEO, except for matters specifically reserved for the Board, and monitors the exercise of that delegation.

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

Board Composition

The Board seeks to ensure that it is independent and has an appropriate mix of expertise and diversity to effectively discharge its role and responsibilities.

The Board currently comprises ten Non-Executive Directors, each of whom are considered to be independent, and one Executive Director, being the CEO.

Current membership of the Board is set out below:

Director

Board Membership

Catherine Livingstone AO

Independent Non-Executive Director (Chairman)

Ian Narev

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

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

From time to time, the Board establishes standing committees. Those committees focus on specific issues and areas of the Group’s operations, thereby strengthening the Board’s oversight.

The Board currently has four substantive standing committees (Board Committees):

  • the Nominations Committee;
  • the Audit Committee;
  • the Risk Committee; and
  • the Remuneration Committee.

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 and Wendy Stops

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

The Charters for each Board Committee may be accessed from the following links:

Risk management

The Group recognises risk is inherent in business and effective risk management is essential in delivering on the Group’s business objectives and is a key component of sound corporate governance. 

The Group’s Risk Management function is responsible for developing the Group’s Risk Management Framework (RMF) to allow the Group to manage risks within a Board-approved risk appetite.

The RMF covers all the Group’s systems, structures, policies, processes and people that or who identify, measure, evaluate, monitor, report and control or mitigate both internal and external sources of material risk. The RMF is founded on three key components: the Group’s Risk Appetite Statement, the Group’s Business Plan and the Group’s Risk Management Strategy.

Acting Ethically and Responsibly

Our Commitments

The “Our Commitments” document is the Group’s foundational code of conduct policy and sets the Group’s expectations of its people, including its directors, senior executives and employees, when engaging with, and balancing the interests of, the Group’s stakeholders.

The policy is critical to the Group achieving its vision of exceling at securing and enhancing the financial wellbeing of people, businesses and communities and living the Group’s values of integrity, accountability, collaboration, excellence and service.
It contains eight commitments to be made by all the Group’s people:

  • I commit to upholding the guiding framework of our vision and values;
  • I commit to honesty;
  • I commit to maintaining confidentiality;
  • I commit to disclosing and managing conflicts of interest;
  • I commit to appropriate use of technology and communications;
  • I commit to operating in a safe and inclusive manner;
  • I commit to maintaining personal standards that support our vision and values; and
  • I commit to understanding and fulfilling all aspects of my role.

In addition, the document includes “Values Guidelines” to assist the Group’s people to understand, practice and demonstrate the Group’s vision and values.

Conflicts of Interest

The Group’s Conflicts of Interest framework comprises a number of components, including:

  • Group Conflicts of Interest Policy;
  • Group Gifts and Entertainment Policy; and
  • various supporting business unit level policies and procedures (including conflicts of interest registers and gifts and entertainment registers).

The framework seeks to ensure that all actual, perceived or potential conflicts of interest are identified and recorded and then avoided or managed, as appropriate.

Anti-Bribery and Corruption

The Group is committed to embedding a policy of zero tolerance for bribery, corruption and facilitation payments across its business and has an Anti-Bribery and Corruption Policy.

The policy requires all parts of the Group’s business to consider, identify and understand the bribery and corruption risks within their operations, identify controls applied to those risks and monitor key risk indicators.

Further information on the policy can be found here.

Securities Trading

The Board has adopted a Group Securities Trading Policy. Under that Policy, the Group’s people 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.

Whistleblower Protection

The Group places great importance on fostering a culture that encourages its people to speak up about issues and conduct that cause them concern.  The Group Whistleblower Policy is designed to encourage and support individuals in reporting such matters, knowing that they will be safe and receive support, and not be subject to retaliation or victimisation. Further, the Group’s SpeakUP Hotline offers a trusted avenue for its people and external partners to report issues and concerns.

Slavery and Human Trafficking

The Group has published its latest Slavery and Human Trafficking Statement in compliance with the UK Modern Slavery Act, and updated its Supplier Code of Conduct to improve recognition of human rights and supplier compliance with international human rights laws. 

Diversity and Inclusion

The Group aims to leverage diversity and foster inclusion so that all its people feel valued and respected.

The Group has a policy on diversity and inclusion which is underpinned by its Diversity and Inclusion Strategy. A summary of that policy can be found here.

Further information on diversity and inclusion is set out in the Corporate Governance Statement.