201512 72-2015 Board and Director Fit and Proper Policy and Director Fit and Proper Policy Page 2...
Transcript of 201512 72-2015 Board and Director Fit and Proper Policy and Director Fit and Proper Policy Page 2...
Document Title <Version Date>
Board and Director Fit and Proper
Policy
Version: 3.0 - Final
Date: June 2016
Board and Director Fit and Proper Policy
Page 1
Document control
This document
The purpose of this Policy is to document the board succession and renewal framework and the
requirements for assessing the performance and fitness and propriety of the various Boards of
the entities forming the Credit Union Australia Limited (CUA) Group.
Contact for enquiries and proposed changes
If you have any questions regarding this document please contact:
Name: Nicole Pedwell
Role: Company Secretary
Phone: (07) 3552 4313
Email: [email protected]
Document history
CUA Group
Entity Approval Date Rev No.
Summary of Changes Policy Author
Commencement
Date
CUA Group February 2012 0.0 CUA Board approved L. Swenson
CUA Group March 2014 1.0 CUA Board approved S. Groth
CUA Group December 2015 2.0 Policy style and
format updated and
minor grammatical
amendments made.
Annual Board and
Director Assessment
Policy has been
combined with Board
Succession Policy.
The Fit and Property
Policy as it pertains
to directors has been
incorporated in this
Policy.
The Directors
Retirement Policy has
been incorporated
into this Policy.
Review frequency
changed to biennial.
N Pedwell December 2015
Board and Director Fit and Proper Policy
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CUA Group June 2016 3.0 Change Policy name
to Board and
Director Fit and
Proper Policy to align
to Constitution.
D Copland June 2016
Document location
S:\company secretary\Governance - FOR USE BY CO SEC ONLY\Policies + Standards\Policies
References - Legislation
This section lists all of the Legislation that relate to this Policy.
Legislation
Not Applicable
References – Prudential Standards
This section lists all of the Prudential Standards that relate to this Policy.
Prudential Standards
APRA Prudential Standard CPS 510 - Governance
APRA Prudential Standard HPS 510 - Governance
APRA Prudential Standard CPS 520 - Fit and Proper
References – Policies and Standards
This section lists all of the CUA Policies and Standards that relate to this Policy.
Policies and Standards
Fit and Proper Policy (Senior Managers)
References – Guidelines/Procedures
This section lists all of the CUA Guidelines/Procedures that relate to this Policy.
Guidelines/Procedures
Not Applicable
Board and Director Fit and Proper Policy
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Table of contents 1 Purpose ............................................................................................. 5
2 Scope ................................................................................................. 5
3 Exceptions ......................................................................................... 5
4 Policy Approvers / Frequency of Review ......................................... 5
4.1 Approvers ..................................................................................................................... 5
4.2 Review .......................................................................................................................... 5
5 Policy Owner ..................................................................................... 5
6 Distribution ....................................................................................... 6
7 Policy Statements ............................................................................. 6
7.1 Succession and Renewal ................................................................................................ 6
7.1.1 Policy Objectives and Responsibilities ........................................................................ 6
7.1.2 Age ............................................................................................................................ 6
7.1.3 Continuity and Length of Service ................................................................................ 6
7.1.4 Succession Planning ................................................................................................... 7
7.1.5 Director Recruitment and Selection ............................................................................ 7
7.1.6 Director’s standing for Re-Election under CUA’s Constitution (CUA only) ................... 8
7.2 Board and Director Assessment ..................................................................................... 8
7.2.1 Policy Objectives and Responsibilities ........................................................................ 8
7.2.2 Assessment Process ................................................................................................... 8
7.3 Director Fit and Proper Assessments ............................................................................. 9
7.3.1 Criteria for assessment of fitness and propriety .......................................................... 9
7.3.2 Process for assessing fitness and propriety ............................................................... 10
7.3.3 Interim appointments of Directors ........................................................................... 10
7.3.4 Disclosure, Document Retention and Whistleblowing .............................................. 10
7.3.5 Dealing with persons who are not Fit and Proper ..................................................... 11
7.3.6 Dealings with APRA .................................................................................................. 11
7.3.7 Collecting Personal Information about candidates and Directors .............................. 11
7.3.8 Responsibility Matrix ................................................................................................ 12
7.4 Director Retirement Benefits ....................................................................................... 12
8 Policy Compliance Measures .......................................................... 13
9 Terms and Definitions .................................................................... 13
Board and Director Fit and Proper Policy
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Appendix 1 – Responsibility Matrix ..................................................... 14
Appendix 2 – Target Board Skills for Directors .................................. 18
Appendix 3 – CUA Group Entity Director Annual Fit and Proper Assessment ........................................................................................... 19
Board and Director Fit and Proper Policy
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1 Purpose Good corporate governance and prudential standards require a policy on board succession and
renewal. The purpose of this Policy is to document the CUA Group’s board succession, renewal
and assessment framework.
This Policy also documents the requirements for assessing:
� the performance of the Boards of each CUA Group Company relative to their objectives;
� the performance of each individual director on those Boards; and
� the fitness and propriety of each individual director on those Boards.
This Policy complies with the requirements set out in APRA Prudential Standards CPS 510 –
Governance, HPS 510 – Governance and CPS 520 - Fit and Proper.
2 Scope This Policy is a CUA Group Policy and is intended to cover each CUA Group Company.
3 Exceptions There are no exceptions with compliance to this Policy.
4 Policy Approvers / Frequency of Review
4.1 Approvers
Legislative/Regulator requirement for Board approval of this Policy: Yes: ☒ No: ☐.
The CUA Group Board will approve this Policy on behalf of each CUA Group Company to the
extent that it is applicable to them.
4.2 Review
Legislative/Regulator stipulated review period for this Policy: Yes: ☐ No: ☒.
This Policy will be reviewed at least biennially or as required subject to legislative or regulatory
requirements, in order to ensure:
� currency, relevance and accuracy; and
� it continues to meet the needs, strategic imperatives and cultural alignment intentions of the
CUA Group.
This Policy must meet the mandatory requirements as prescribed in APRA’s Prudential Standards
and each review will have reference to the checklist of mandatory requirements contained in CPS
520.
5 Policy Owner The owners of this Policy are the CUA Board along with the Company Secretary.
Board and Director Fit and Proper Policy
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6 Distribution This Policy will be made available to all directors and members of the Boards of each CUA Group
Company.
Once formally approved or amended, formal notification of the same will be sent to all directors
and members of those Boards.
7 Policy Statements
7.1 Succession and Renewal
7.1.1 Policy Objectives and Responsibilities
The respective Boards of each CUA Group Company will ensure that, at least annually (or more
regularly if required), they will consider and review Board succession and renewal and the relevant
company’s compliance with this Policy.
The Chair of each Board of each CUA Group Company shall be responsible for co-ordinating and
overseeing the aforesaid review.
The objectives of this Policy are to ensure that the respective Boards of each CUA Group Company
continue to:
� provide relevant and strong leadership;
� renew themselves so as to ensure that they remain open to new ideas and independent
thinking, whilst at the same time retaining adequate expertise;
� give due consideration as to whether directors have served on the Board in question for a
period that could, or could reasonably be perceived to, materially interfere with their ability
to act in the best interests of the company;
� perform at the optimal level;
� remain committed to ongoing director education and development; and
� comply with CPS 510 Governance and HPS 510 Governance as appropriate.
7.1.2 Age
The age of an individual director will not prevent a director from continuing in the role, provided
he/she can perform their duties as a director to the standard expected by the Board in question.
7.1.3 Continuity and Length of Service
The CUA Group’s preferred approach is to blend the need for continuity in Board membership
with regular infusions of new skills and experience.
The Group’s non-executive and executive directors will, provided they are re-elected/re-
appointed (and in the case of executive directors provided they remain employed), and to the
extent possible, serve between seven (7) to nine (9) years continuously. After the agreed period
of continuous service, non-executive and executive directors are required to stand down for a
period of at least 6 years before being eligible to stand for re-election to a CUA Group Board.
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7.1.4 Succession Planning
The Boards of CUA Group Companies are responsible for ensuring that there is a balance of skills
and experience on those Boards that is commensurate with the growing complexity of the
Group’s business.
The CUA Group’s preferred approach is to actively manage Board succession in accordance with
this Policy, relevant procedures and standards and to satisfy the needs of the CUA Group and its
Boards from time to time.
Succession planning will be reviewed annually and is a corollary to the annual Board and Director
performance assessment process (found in Part 7.2 of this Policy). The Boards of CUA Group
Companies are responsible for making recommendations as to who membership of the Board
ought to comprise of.
The Chair of each respective Board will submit to the relevant Board, after discussion with each
non-executive director, the current expectation for a retirement date for the director in question,
in accordance with this Policy. It is expected that the Board and individual non-executive
directors will confirm 12 months ahead of the retirement date for an individual.
The CUA Group CEO will submit to the relevant Board, after discussion with each executive
director, the current expectation for a retirement date for the director in question, in accordance
with this Policy. It is expected that the CUA Group CEO and individual executive directors will
confirm 12 months ahead of the retirement date for an individual.
The BREM is responsible for instituting any and all actions necessary to replace a retiring director
in accordance with the current needs of the CUA Group and the Fit and Proper Criteria outlined
in the Board and Director Fit and Proper Policy (whilst also considering the Target Board Skills,
as relevant).
7.1.5 Director Recruitment and Selection
The CUA Group comprises CUA, CHL, CCI, CUAFP and CCF. CUA is the sole member and
shareholder of CHL and CCF and is the ultimate member and shareholder of CCI and CUAFP. As
such, CUA determines the composition of the Boards of each CUA Group Company.
The following approach to the recruitment of directors may be adopted by the Board of CUA to
ensure the Group obtains a broad cross section of appropriately skilled candidates:
� Advertising – depending on the amount of notice available the Chair will, through CUA’s
member communications, seek expressions of interest from Members who believe they have
the skills, experience and capacity necessary to be a director of CUA, in accordance with the
current Fit and Proper Criteria.
� Interested members are eligible to seek election to the Board of CUA only through the annual
election process provided that they first satisfy the Fit and Proper Criteria outlined in the
Board and Director Fit and Proper Policy (including the Target Board Skills, where relevant).
Candidates who may satisfy the initial Fit and Proper Criteria will be interviewed in accordance
with the processes for selection under the Board and Director Fit and Proper Policy and the
final determination will be made in respect of the eligibility to stand by the BRem. If they are
successful in being able to stand for election under the election process then Part 7.1.6 of this
Policy will apply.
� External Recruitment – Undertake an external search for suitable candidates using a specialist
consultant.
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The BRem will co-ordinate the recruitment and selection processes, including the selection of the
specialist consultant, and will make recommendations to the CUA Board on the preferred
candidate/s. The CUA Board must ensure that the preferred candidate/s is/are fit and proper (as
applicable) under the Board and Director Fit and Proper Policy and the prudential standards and
possess the required competencies outlined under the Board and Director Fit and Proper Policy
and in the Target Board Skills.
7.1.6 Director’s standing for Re-Election under CUA’s Constitution (CUA only)
If a director indicates that they wish to stand for re-election, and are eligible in accordance with
Part 7.2 of this Policy, at the end of their term, the CUA Board, through the BRem, will formally
determine if they will support that director’s re-election and in doing so will communicate to
Members that:
� the director’s performance continues to be effective;
� the director is independent; and
� the director remains committed to the role.
In addition to the requirements under CUA’s Constitution for the BRem to determine that a
director seeking re-election or a candidate standing for election is fit and proper, the BRem will
make recommendations to CUA’s Board on whether it should support a retiring director’s re-
election and/or a candidate standing for election.
7.2 Board and Director Assessment
7.2.1 Policy Objectives and Responsibilities
The Boards of each CUA Group Company will ensure that, at least annually, Board Assessments
and Director Assessments are conducted.
The Chair of each Board of each CUA Group Company shall be responsible for co-ordinating and
overseeing the assessment process.
The objective of a Board Assessment will be to identify and collate the directors’ views on those
areas of performance or governance which may require an increased level of attention by the
relevant Board.
The objective of the peer-evaluation Director Assessments will be to improve Board performance
by identifying key areas of skill and experience of individual directors which may need to be
strengthened or developed. Director Assessments will take into account directors’ compliance
with the respective ‘Directors’ Code of Conduct’ found in the Board Charters for each CUA Group
Company.
Should any CUA Group Company have a management Board, the peer-evaluation Director
Assessments will be included as part of the annual performance review to be conducted by the
CUA Group CEO.
7.2.2 Assessment Process
In advance of any assessment being undertaken pursuant to this Policy, the relevant Board (and
in the case of a CUA Group Company that has a management Board, the CUA Group CEO) shall
identify and agree appropriate criteria to be used for the assessments for both the Board and
individual director in question.
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A process for:
� identifying the appropriate assessment criteria and adopting an agreed grading system;
� undertaking formal assessments; and
� communicating the assessment results and recommending improvements,
shall be agreed by the relevant Board prior to any assessments being undertaken pursuant to
this Policy.
The assessment process shall be properly documented by the Chair of the relevant Board and
the results treated confidentially. The results of any Board Assessment will be aggregated and
presented to the relevant Board without identifying individual directors.
Individual Director Assessments will be discussed between the Chair and the director concerned
(and in the case of a CUA Group Company that has a management Board, between the CUA
Group CEO and the directors concerned). Peer assessments may be undertaken where agreed
by the relevant Board.
The relevant Board may elect to use an external consultant during any stage of the assessment
process.
7.3 Director Fit and Proper Assessments
This Part applies to all Directors who are Responsible Persons (as determined in accordance with
the definition of “Responsible Person” in CPS 520).
This Part is to be read in conjunction with the CUA Group Fit and Proper (Senior Managers) Policy
(where relevant).
7.3.1 Criteria for assessment of fitness and propriety
All Directors of the CUA Group must be, and must remain, fit and proper.
Part 7.3 of this Policy, and in line with CPS 520, provides that, in addition to satisfying any
additional criteria as determined by the CUA Board from time to time, the criteria for determining
whether a person is fit and proper to hold a Responsible Person position are:
� It would be prudent for CUA to conclude that the person possesses the competence,
character, diligence, honesty, integrity and judgment to properly perform the Responsible
Person position;
� The person is not disqualified from holding the position; and
� The person:
� Has no conflict of interest in performing the duties of the position; or
� If the person has a conflict, it would be prudent for CUA to conclude that the conflict will
not create a material risk that the person will fail to properly perform the duties of the
position.
Appendix 1 of this Policy contains the detailed processes and protocols for assessment of each
of CUA Group’s Directors, including assessment criteria and the competencies required for that
Directorship. The competence of candidates for, and persons currently holding, Directorships
with the CUA Group is assessed by reference to the competencies for the position and the
relevant position description.
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Appendix 2 of this Policy sets out the Target Board Skills for Directors, being the list of skills from
which all Board nominees must have demonstrable and substantive expertise in at least one area.
7.3.2 Process for assessing fitness and propriety
CUA Group undertakes fit and proper assessments of all candidates for its Directorships.
APRA’s Prudential Standards and this Policy require documentation of the processes to be
undertaken in assessing whether a person is fit and proper for a Directorship (fit and proper
assessments) and must include details of:
� Who will conduct the fit and proper assessments. In the case of Independent Directors, it will
usually be the BREM at request of Board. In the case of Senior Managers who hold Executive
Director positions (including interim appointments), it will be the CEO and General Manager
– Human Resources with the BREM overseeing the assessment conducted by them;
� What information will be obtained by CUA and how it will be obtained;
� The matters that will be considered before determining if a person is fit and proper for a
Directorship; and
� The decision-making processes that will be followed.
The assessment of a person’s fitness and propriety to be a Director must generally be conducted
prior to a person’s appointment. The exceptions are:
� Directors elected by resolution of the members of CUA;
� APRA notification that a person is deemed to be a Director; and
� Where a position has changed and is subsequently deemed a Directorship.
In such cases, APRA’s Prudential Standards and this Policy require that a fit and proper
assessment be completed within 28 days of the person becoming the holder of the Directorship.
All Directors of the CUA Group are required to annually attest that they remain fit and proper
and every three years (or when up for appointment at an AGM) undergo a full fit and proper
assessment.
7.3.3 Interim appointments of Directors
A CUA Group entity may also make interim Directorship appointments.
Where it is necessary to make such an interim appointment, please refer to Appendix 1 for the
procedure to be followed.
7.3.4 Disclosure, Document Retention and Whistleblowing
The CUA Group is committed to encouraging any person who has information that may be
relevant to the fitness and propriety of any Director to make that information available to the
CUA Group. This includes disclosure of any information which they believe is relevant to the
fitness and propriety of any such Director.
In the first instance the information should be provided to the Company Secretary who will liaise
with the CEO and the appropriate director. If the information relates to the CUA Group Chair,
then the information should be provided to the Chair of the Board Audit Committee. If the
information relates to any other director then the information should be provided to the CUA
Group Chair or any other director not the subject of the complaint.
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This Policy specifically permits disclosure to APRA and other regulators of any information
required to be disclosed under CPS 520.
All information, consents, checks and assessments in relation to current, and recently past,
Directors will be retained in the company registers maintained by the Company Secretary.
No policy, procedure, term or condition or agreement is permitted which attempts to constrain,
impede, restrict or discourage any disclosures or the provision of any documents to APRA or
other regulator.
The provisions of CUA’s Whistleblower Protection Program specifically apply to any officer who
makes a report to APRA or other regulator as detailed above.
7.3.5 Dealing with persons who are not Fit and Proper
Where CUA or a CUA Group entity has assessed that a person is not fit and proper, or a
reasonable person in such a position would make that assessment, CUA or the relevant CUA
Group entity will take all steps it reasonably can to ensure that:
� Such person is not appointed; or
� For an existing Director, does not continue to hold the position.
Where a Director has been assessed as not being fit and proper, APRA must be notified within
10 business days of such assessment. If the person remains a Director, the notification must also
state the reason for this and the remedial action that is being taken.
Appendix 1 of this Policy sets out the detailed processes for dealing with Directors who may be
determined to be not fit and proper to hold such a position.
7.3.6 Dealings with APRA
Subject to Part 7.3 of this Policy, the CUA Group will notify APRA of the appointment of all
Directors within the CUA Group, together with all Relevant Information, within 28 days of their
appointment. Any changes to the Relevant Information of a Director will be notified to APRA
within 28 days of such change.
CUA will provide a copy of this Policy to APRA upon request and give all information and
notifications to APRA in the prescribed format where required. Upon request by APRA, CUA will
take all reasonable steps to provide information and documentation to assist APRA in assessing
the fitness and propriety of a person.
In this Part, “Relevant Information” means the person’s full name, date of birth (for identification
purposes only), position and main responsibilities and a statement of whether the person has
been assessed under this Policy.
7.3.7 Collecting Personal Information about candidates and Directors
In carrying out a fit and proper assessment, the CUA Group may, and frequently will, require
candidates for Directorships and existing Directors of CUA Group to provide personal information
including “sensitive information”, within the meaning of the Privacy Act 1988 (Cth) (Privacy Act).
The CUA Group will make all reasonable enquiries necessary to obtain personal information,
including sensitive information, where it believes such information may be relevant to an
assessment of whether a person is fit and proper to hold a Directorship.
Board and Director Fit and Proper Policy
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Acting prudently, the CUA Group is committed to obtaining such personal information as it may
reasonably require in order to be able to properly assess the fitness and propriety of candidates
for Directorships and its existing Directors, pursuant to APRA’s Prudential Standards and this
Policy.
The CUA Group must also ensure that all personal information collected, held and stored by it is
used and will only be disclosed in accordance with the requirements of the Privacy Act, this Policy
and CUA’s Privacy Policy. Without seeking to limit this general commitment, the CUA Group
must ensure that persons to whom the information applies may, in accordance with the Privacy
Act, gain access to the information by contacting the CUA Group.
If the CUA Group does collect and hold personal information (including sensitive information), it
will collect, hold and use the personal information (including sensitive information) to:
� Assess a person’s fitness and propriety;
� Comply with legislative and regulatory requirements;
� Perform administrative functions including risk management, record keeping, archiving, staff
training; and
� Manage CUA Group’s rights and obligations under its licences.
Any personal information (including sensitive information) collected by the CUA Group for the
purposes of a fit and proper assessment will be disclosed as required under this Policy, CUA’s
Privacy Policy, APRA’s Prudential Standards and the law.
7.3.8 Responsibility Matrix
To ensure compliance with Part 7.3 of this Policy, the minimum standards set out in the
Responsibilities Matrix at Appendix 1 to this Policy must be met.
7.4 Director Retirement Benefits
Upon the retirement or resignation of a non-executive director of CUA a lump sum retirement
benefit equivalent to the director’s average annual board fee for the previous three (3) year
period (the Retirement Benefit) shall be paid to the director, subject to:
� the director having served a minimum period of six (6) years on the CUA Board; or
� the director having served an uninterrupted minimum period of six (6) years on the CUA
Board and the board of an entity that has previously merged with CUA; and
� the director providing a written undertaking that he/she will repay the Retirement Benefit to
CUA if:
� they seek re-election to the Board of CUA within six (6) years of the date of their
retirement/resignation from the CUA Board; or
� unless otherwise approved by the Board of CUA, they seek election to the board of
another credit union or ADI within twelve (12) months of the date of their
retirement/resignation as a director of CUA.
Prior to the payment of a retirement benefit, the Chairman of the CUA Board (or where the
Retirement Benefit concerns the Chairman of the CUA Board, then the Chair of the Board Audit
Committee), must provide written authorisation that such payment should be made and that
the requirements of this Part have been met.
Board and Director Fit and Proper Policy
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8 Policy Compliance Measures As regards Board succession, renewal and assessment, the CUA Group has a limited appetite for
minor deviations from this Policy should circumstances absolutely require it.
As regards the assessment of fitness and propriety of Directors, compliance with this Policy is
mandatory and will be measured in accordance with the methods prescribed in the Board and
Director Fit and Proper Policy.
9 Terms and Definitions Capitalised terms used in this Policy which are not otherwise defined below have the meanings
given to them in the CUA Glossary of Terms and Definitions.
The following terms contained in this Policy are defined as follows:
BARC means the Board Audit and Risk Committee of a CUA Group entity.
Board means the Boards of CUA, CHL, CCI and CCF or the management Board of CUAFP, as the
case may be.
Board Assessment means the assessment of the Board’s performance (including the
performance of any Board Committees) relative to its objectives.
BREM means the CUA Board Remuneration Committee.
CCF means Credicorp Finance Pty Ltd.
CCI means Credicorp Insurance Pty Ltd.
CHL means CUA Health Limited.
CUA means Credit Union Australia Limited.
CUAFP means CUA Financial Planning Pty Ltd.
CUA Group or CUA Group Company means CUA, CHL, CCI, CUAFP or CCF as the context
requires.
Director Assessment means the individual assessment of the directors’ performance.
Directors means all Executive and Non-Executive Directors of a CUA Group entity.
Responsible Person has the meaning given to it in CPS 520 and for the purposes of this Policy
means Directors of a CUA Group entity only.
Target Board Skills means the target board skills identified in Appendix 2.
Board and Director Fit and Proper Policy
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Appendix 1 – Responsibility Matrix
Requirements Responsibility
A. Criteria and Process for assessment of fitness and propriety – Directors – CUA and other
CUA Group entities
1) Required Competencies
a) Each Director and/or candidate for the position of director is expected to have the
necessary board skills, knowledge and experience to govern the CUA Group both now and
in the future. They must have at least one of the following core competencies that are
relevant to the core competencies that should be represented on the Board as a whole:
i) strategic expertise;
ii) financial literacy;
iii) risk and legal skill – compliance with numerous laws, managing areas of major risk to
the organisation;
iv) managing people and achieving change;
v) experience with financial markets;
vi) experience with major technology projects;
vii) retail banking experience (or experience in similar organisations or industries); or
viii) expertise in an area that the Board considers to be strategically important for the CUA
Group.
b) In addition to the above competencies a Director and/or candidate for the position of
Director is expected to have the following:
i) an understanding of the CUA Group as a mutual business;
ii) an understanding of the regulatory environment within which the CUA Group
operates;
iii) an understanding of the financial statements and associated reporting having regard
to the nature of the CUA Group business;
iv) an understanding of the roles and responsibilities of a Director; and
v) the attributes necessary to work collaboratively and constructively with the Board.
c) Candidates must have demonstrable and substantive expertise at an executive or board
level in at least one of the areas specified in the Target Board Skills for Directors at
Appendix 2.
2) Fitness and Propriety Criteria
a) Each Director and/or candidate for the position of Director is required to meet all of the
following criteria:
i) Must have the appropriate competencies and skills as detailed in section A. 1 above;
ii) Must possess the required character, diligence, honesty, integrity and judgment to
properly perform the duties of a CUA Group Director;
iii) Must not be disqualified from acting as a director of CUA under any legislation,
regulation or standard;
iv) Must not have any conflict of interest which limits their capacity to be actively involved
in Board meetings or which creates a material risk that the director might fail to
properly perform their duties;
v) Must be able to spend time to fully prepare for, travel to and attend Board, Board
committee and subsidiary meetings as required by CUA; and
vi) Must not have a material relationship with an entity seeking to acquire an interest in
CUA.
BREM
Board and Director Fit and Proper Policy
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b) In addition, directors seeking re-election must meet the following criteria:
i) Must not have materially breached any of the following:
(1) Technology Acceptable Use Standard;
(2) Anti-discrimination Standard and the Bullying and Harassment Standard;
(3) Workplace Health and Safety Standard; and
ii) Must not have materially breached the Director’s Code of Conduct as detailed in the
relevant CUA Group entity Board Charter.
3) Fitness and Propriety Assessment – Election/Re-election as a Director – CUA (only)
a) The CUA Board as prescribed by the Constitution has the sole responsibility for
determining the fitness and propriety of persons who are seeking election/re-election as
a Director under the CUA Constitution. The Board at its sole discretion may itself
undertake the assessment of fitness and propriety or alternatively request the BREM or
another CUA Group entity Board committee to undertake the assessment on its behalf.
b) The fitness and propriety criteria referred to in section A. 2 above applies equally, to the
extent possible, to all persons seeking election/re-election as a Director of CUA.
c) Where an existing Director is seeking re-election, the CUA Board will have access to the
fitness and propriety assessments for the individual Director.
d) In the event that a person does not provide the information required under the CUA
Constitution then the CUA Board may determine that the person does not meet the fitness
propriety criteria. In the event that the Board requests the BREM or another CUA Group
entity Board committee to undertake an assessment and they find that the person does
not meet the criteria then the Board will not appoint the person as a Director
e) On receipt of all information and consents and completion of the relevant Questionnaire
and Declaration, the General Manager - Human Resources will undertake the standard
enquiries and checks (including the frequency of the National Police Check). The General
Manager - Human Resources will have regard to the Checklist for CUA Group fit and
proper assessments as detailed in the Board and Directors Fit and Proper Policy.
f) The Board will determine the process it will undertake to complete the assessments of
individuals seeking election/re-election as a Director, provided the process does not
conflict with any aspect of its Constitution.
g) In the event of a person being assessed as not meeting the fitness and propriety criteria,
the Board will initially provide the person with a verbal assessment and an opportunity to
provide additional information and comments to the Board. The Board will then consider
and take into account any additional information and comments provided by the nominee
before issuing its final assessment.
4) Fitness and Propriety Assessment – Existing Directors – all CUA Group entities
a) Annually each Director will undertake a self-assessment against the criteria contained
within section A. 2 above (see the template Questionnaire and Declaration).
b) Where a Director has conducted a self-assessment and believes they meet the criteria they
should provide details of their assessment together with a declaration to the Company
Secretary to the effect that they have assessed themselves as meeting the criteria.
c) If at any time a Director believes they do not meet the criteria they should seek advice
from the Chair and if appropriate, the Company Secretary to determine if the matter can
be remedied. If remediation cannot be achieved then the Director is obliged to resign.
d) As part of the annual assessment process Directors may raise any issues or concerns they
may have about the fitness and propriety of other Directors.
e) The Company Secretary must report any exceptions to the chair.
f) The BREM will co-ordinate the annual fit and proper assessment review of individual
Directors and report the outcome of these assessments to the Board of Directors.
5) Existing Directors – Assessment Exceptions – Phase 1
Subject always to the provisions of this Policy:
a) the BREM will assess the severity of any exceptions;
Board and Director Fit and Proper Policy
Page 16
b) where the exception is related to competencies, the BREM will recommend a development
program to update and enhance the skills of the individual Director;
c) other than because of disqualification, where the exception is due to any other reason, the
BREM will assess whether remediation is possible;
d) the Chair must then meet with the Director to discuss the assessment exceptions and
where applicable should agree with the Director the development program and the time
frame for re-assessment;
e) where the exception is not related to competency/skills or disqualification, the chair should
convey what remediation is required and a time frame for re-assessment; and
f) where no remediation is considered possible the Chair should recommend that the
Director consider resigning.
6) Existing Directors – Assessment Exceptions – After Development Program
g) Following the completion of the development program the Director should undertake a
self-assessment as per section A. 2(a) above.
h) The Chair should then review the self-assessment and seek input from the other Directors
where considered appropriate.
i) The Chair should meet with the Director to discuss the assessment.
j) Where the Chair believes that the Director still does not meet the criteria then the
assessment should be referred to the BREM or relevant Committee which may recommend
that the Director consider resigning and advise the Board accordingly.
7) Unsatisfactory Assessment – Director Does Not Resign
k) Where the Chair has recommended that a Director consider resigning and the Director
decides not to resign, the Chair will request the Board to review the fitness and propriety
assessment and in doing so must make available all relevant documentation.
l) Where the Board reviews the findings and confirms the unsatisfactory assessment, a report
will be prepared by the Chair and circulated to all Directors with a request that the matter
be discussed at an “in camera” session of the Board.
m) The Board at their “in camera” session will discuss the report from the Chair and seek a
response from the Director concerned.
n) Provided the Chair’s report is supported by 75% of the Directors, the Director will be
requested to resign.
o) Where a resignation is not tendered the Board will consider the options available to it,
including seeking regulatory assistance to remove the Director.
B. Interim Appointments of Responsible Persons
Interim appointments to a Responsible Person position may be made by the CUA Group without
a full fit and proper assessment being undertaken for a period of up to 90 days (or longer with
APRA’s agreement) including any prior period of interim appointment.
In circumstances where the CUA Group needs to make interim appointments of persons to a
Directorial position the following will apply:
a) The CUA Group will do nothing further, prior to the interim appointment, if the person has
already been assessed as fit and proper for another Directorship within CUA Group.
A person appointed to a Directorship of the CUA Group on an interim basis may subsequently be
confirmed in that position if, following a full assessment in accordance with this Appendix and
completion of all enquiries, the person is found to be fit and proper for the particular Directorship.
BREM
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C. Dealing with persons who are Not Fit and Proper
CUA Group will take all prudent steps to ensure that:
a) A person who is not fit and proper for a Directorship, is not appointed to that position;
and
b) A person occupying a Directorship does not continue to hold that position if subsequently
found not to be fit and proper for that position.
Directors
Subject to the processes outlined in section A5 above in this Appendix, in relation to the removal
of Directors, a CUA Group entities’ ability to take action following a finding that a director is not
fit and proper is limited by the Corporations Act 2001 (Cth) and its Constitution.
Accordingly, wherever a CUA Group entity forms the belief that a director is not fit and proper,
notification will be provided by the Company Secretary to APRA within 10 business days of forming
the belief, the basis of the belief and whether there is a need for a direction by APRA under the
Banking Act 1959 (Cth) to enable CUA Group to promptly remove the director.
BREM / Co Sec
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Appendix 2 – Target Board Skills for Directors
All nominees for Board election or appointment must have demonstrable and substantive expertise
in at least one area.
Post the Global Financial Crisis, there has been, and continues to be, an increasing amount of
complex regulation and scrutiny by CUA Group’s regulators. There is also a recognition by the Board
that the best interests of members are served by building a strong, stable organisation with a
sustainable future. As a result, the Board believes it necessary to regularly update skills required of
Board members.
In accordance with the Board’s practice in respect of Board succession, this list will be reviewed
annually and updated as appropriate with effect from 1st July of that year.
SKILLS AND EXPERIENCE
1) CUA’s goal is to grow its assets substantially (at least double) over the next 3 to 5 years. Board
skills, knowledge and experience are needed not only to govern the company now, but more
importantly to help CUA achieve its future ambitions. Broadly, for a nominee to be considered fit
& proper to be a CUA Directors, they require:
a) a background that is relevant to the needs of CUA;
b) an understanding of CUA as a mutual business; and
c) an understanding of the regulatory environment within which CUA operates.
2) A nominee must have core skills that are relevant to the core skills that should be represented
on the CUA Board as a whole (not necessarily in one person). These are those items listed at Part
1. (a)(i) to 1.(a)(viii) in Appendix 1 of this Policy.
3) The skills and experience required of nominees need to be derived from recently working within
or with an ADI with assets exceeding $6 billion, or an equivalent organisation (one that has similar
characteristics to a substantial ADI, or a company equivalent to an ASX300 entity), in one or more
of the following areas:
a) qualified accountant with not less than 10 years at a senior level, in the finance function
covering financial reporting, performance management and capital management;
b) minimum 5 years as a Non-Executive Director;
c) as Chief Executive or head of a major operating division in business development, strategic
development, sales & marketing or systems implementations; or
d) more than 5 years’ experience at senior executive levels is governance, risk and compliance
activities, including experience interacting with the regulators.
4) There may also be strategic reasons why, in the case of Board appointments made under rule
13.4 of the Constitution, the CUA Board, may determine that a nominee for Board appointment
is fit & proper when that individual does not have the skills and experience described above.
The Board reserves the right to vary the list at any time according to the changing needs and
circumstances of CUA Group
Board and Director Fit and Proper Policy
Page 19
Appendix 3 – CUA Group Entity Director Annual Fit and Proper Assessment
PART 1: QUESTIONNAIRE
SECTION 1 PERSONAL INFORMATION
Full name
Current Residential address
SECTION 2 PROFESSIONAL INFORMATION
Occupation
Employer’s full name
Directorships of other corporate entities (other than in relation to CUA):
..........................................................................................................................................................................
..........................................................................................................................................................................
..........................................................................................................................................................................
SECTION 3 OTHER TRANSACTIONS
Other Transactions
Please provide details of any transaction, other than banking transactions in the normal course of business as a member, undertaken between yourself (or your relatives) and CUA, or its controlled entities in the past twelve (12) months:
...........................................................................................................................................................................
...........................................................................................................................................................................
...........................................................................................................................................................................
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SECTION 4 QUESTIONNAIRE
LICENCES, AUTHORISATION
YES
NO
1. Have you ever been refused the right, or been restricted in the right, to carry on any trade, business or profession for which an authorisation (licence, certificate, registration or other authority) is required by law?
�
�
2. Have you ever been subject to disciplinary action in relation to any such authorisation?
�
�
3. Have you ever been the subject of any investigations or proceedings that are current or pending and which may result in disciplinary action being taken in relation to any such authorisation?
�
�
4. Have you ever been engaged in the management of any companies/businesses that have had a Corporations Act 2001 (Cth) (or previous corresponding laws) licence cancelled?
�
�
PROFESSIONAL MEMBERSHIPS, ACCREDITATION AND INDEMNITY INSURANCE
YES
NO
N/A
5. Have you ever been reprimanded, or disqualified or removed, by a professional or regulatory body or external dispute resolution scheme in relation to matters relating to your honesty, integrity or business conduct?
�
�
6. Has a court, ASIC or APRA ever disqualified you from managing Corporations?
�
�
7. Have you ever had any past, present or pending claim made against a professional indemnity insurance policy in relation to advice you have tendered?
�
�
8. Have you ever been refused professional indemnity insurance?
�
�
9. Have you ever been denied accreditation by a lender, mortgage manager or mortgage insurer?
�
�
10. Have you ever had your accreditation cancelled or suspended by a lender, mortgage manager or mortgage insurer, other than for volume reasons, or had your membership of an aggregator or franchise group terminated, or a similar action pending against you?
�
�
NAMES
Board and Director Fit and Proper Policy
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11. Have you ever carried on business under any name other than the name or names previously notified to CUA?
� �
12. Have you ever been known by any name other than the name or names previously notified to CUA?
�
�
OFFENCES
13. Have you ever been the subject of administrative, civil or criminal proceedings or enforcement action, which were determined adversely against you (including by you consenting to an order or direction, or giving an undertaking not to engage in unlawful or improper conduct) in any country?
�
�
14. Have you ever been convicted of any offence involving any of the following:
If you answer YES, to any of the matters in question 14, ADDITIONAL INFORMATION (page 4) must be completed.
• Management of corporations;
• Breaches of the Corporations Act 2001 (Cth), the Corporations Law that was previously in force, or a similar law of a foreign country;
• Breaches of the Banking Act 1959 (Cth);
• An offence against the Financial Sector (Collection of Data) Act 2001 (Cth), or the Financial Sector (Shareholdings) Act 1998 (Cth);
• Fraud or Dishonesty;
• Conduct relating to a company that carries on business in the financial services sector; and/or
• Significant prison terms
�
�
�
�
�
�
�
�
�
�
�
�
�
�
SOLVENCY
If you answer YES to any of the matters in Questions 15 to 23, ADDITIONAL INFORMATION (page 4) must be completed.
15. Have you ever been declared bankrupt or insolvent under administration, or is there any such action pending?
�
�
16. Have you ever executed a deed of arrangement under Part X of the Bankruptcy Act 1966 (Cth), or a similar law of a foreign country?
�
�
17. Have your creditors ever accepted a composition under Part X of the Bankruptcy Act 1966 (Cth), or a similar law of a foreign country?
�
�
Board and Director Fit and Proper Policy
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18. Have you ever been engaged in the management of any companies/businesses that have had an external administrator appointed, or which have entered into a compromise, or scheme of arrangement, with its creditors?
� �
19. Have you ever been engaged in the management of any companies/businesses that were declared insolvent?
�
�
20. Have you ever been engaged in the management of any companies/businesses that were declared the equivalent of insolvent under the law of an external territory or country other than Australia?
�
�
21. Have you ever been disqualified under the law of a foreign country from managing, or taking part in the management of an entity that carries on the business of banking or insurance or otherwise deals in financial matters?
�
�
22. If you have been disqualified from managing a corporation, has a court given you leave, or has ASIC given you written permission, to be involved in the management of the credit union, or a class of corporation including a credit union?
�
�
�
23. Has a personal representative or trustee been appointed to administer your property on the grounds of mental incapacity?
�
�
SECTION 5 CONSENT
I confirm my consent to the following searches being undertaken in my name and I agree to provide such documentation and information that is necessary to conduct such searches:
• Bankruptcy Search
• Search of ASIC Disqualified Persons Register
• Search of APRA Disqualified Persons Register
• Criminal History Search
Signature of Director .......................................................................................... Date ..................................
For Office Use Only Signature Date
Conducted Bankruptcy Search
Searched ASIC Disqualified Persons Register
Searched APRA Disqualified Persons Register
Conducted Criminal History Search
ADDITIONAL INFORMATION
OFFENCES
If you answered YES to any of the matters in Question 14, please provide the following details:
Board and Director Fit and Proper Policy
Page 23
Court Description of conduct Date of conviction
Penalty
SOLVENCY
If you answered YES to question 22, please provide a copy of the Court order, ASIC’s written permission or APRA’s determination.
If you answered YES to any question under the section ‘Solvency’, please provide an explanation of each matter including:
• the judgement and if it has been satisfied;
• for a declaration of bankruptcy or insolvency: o date of the declaration and district in which it was made o bankruptcy number
• for a deed of arrangement, assignment or where creditors have accepted a composition under Part X of the Bankruptcy Act 1966 (Cth):
o date of the deed of arrangement, assignment or the special resolution accepting composition and the district in which it was made;
o name and address of the trustee of the deed of arrangement, assignment or of the composition; o identifying number used in relation to the deed or arrangement, assignment or the composition
in the office of the Registrar in Bankruptcy.
...........................................................................................................................................................................
...........................................................................................................................................................................
...........................................................................................................................................................................
...........................................................................................................................................................................
...........................................................................................................................................................................
Board and Director Fit and Proper Policy
Page 24
PART 2: INDEPENDENT/EXECUTIVE DIRECTOR FIT AND PROPER DECLARATION
I, DO SOLEMNLY AND SINCERELY DECLARE:
1. that I have read and understand the CUA Board and Director Fit and Proper Policy (the Policy)1, as it relates to my role as an insert of insert CUA Entity and state that I:
a. have the necessary board skills, knowledge and experience to govern insert CUA Entity both now and in the foreseeable future;
b. possess at least one of the core competencies identified in Appendix 1 of the Policy;
c. possess all of the competencies identified in Appendix 1 of the Policy;
d. have demonstrable and substantive expertise at an executive or board level in at least one of the areas specified in Appendix 1 of the Policy; and
e. in the case of Executive Directors ONLY, meet all of the management competencies required under the Policy, as defined in my job description and set out in my contract of employment and the criteria set out in Appendix 1 of the Policy;
2. that I have not been disqualified from acting as a director or manager of insert CUA Entity or its subsidiary companies under any legislation, regulation or standard;
3. that I have no ongoing conflicts of interest which limit my capacity to be actively involved in board meetings or the management of insert CUA Entity or its subsidiary companies;
4. that I have no material relationship with an entity seeking to acquire an interest in insert CUA Entity or its subsidiary companies;
5. that I am able to spend time to fully prepare for, travel to and attend Board and Board committee meetings as required by the insert CUA Entity;
6. that I have not materially breached any of the insert CUA Entity human resource policies, including those referred to in the respective Board Charters of the CUA Group entities;
7. that I have not materially breached the Director’s Code of Conduct as detailed in the respective Board Charters of the insert CUA Entity;
8. that the answers given by me in the Questionnaire forming part of this Fit and Proper Assessment and any other information that I have given in connection with the Questionnaire, are accurate as at the date of its completion;
9. that at no time in the past 12 months have I either in Australia or overseas:
a. demonstrated a lack of willingness to comply with legal obligations, regulatory requirements or professional standards, or been obstructive, misleading or untruthful in dealing with regulatory bodies or a court;
b. breached a fiduciary obligation;
c. perpetrated or participated in negligent, deceitful, or otherwise discreditable business or professional practices;
1 The CUA Board and Director Fit and Proper Policy is available on infocentral.
Board and Director Fit and Proper Policy
Page 25
d. been reprimanded, or disqualified, or removed, by a professional or regulatory body in relation to matters relating to my honesty, integrity or business conduct;
e. seriously or persistently failed to manage personal debts or financial affairs satisfactorily in circumstances where such failure caused loss to others;
f. been substantially involved in the management of a business or company which has failed, where that failure has been occasioned in part by deficiencies in that management;
g. been of bad repute in any business or financial community or any market; or
h. been the subject of civil or criminal proceedings or enforcement action, in relation to the management of an entity, or commercial or professional activities, which were determined adversely on me (including by my consenting to an order or direction, or giving an undertaking, not to engage in unlawful or improper conduct) and which reflected adversely on my competence, diligence, judgement, honesty or integrity; and
10. that I have read and understand the definition of independence contained in Annexure 1 of the insert CUA Entity Board Charter, and state that I am NOT an independent director of the insert CUA Entity due to the fact that I am insert role of insert CUA Entity and an insert role of insert CUA Entity.
Signed:
............................................................ Date: / /
............................................................
Signature of Witness
............................................................
Name of Witness (BLOCK LETTERS)