Code of Conduct for Governance Board Members March 2025
Preamble
The Governance Board oversees the management and organisational affairs of the Reserve Bank, as well as determining its policies that are not within the remit of the Monetary Policy Board or the Payments System Board.
The functions of the Governance Board are set out in section 10D of the Reserve Bank Act 1959.
The Governance Board is also the accountable authority of the Bank and, as the accountable authority, it must comply, among other things, with duties under Division 2 of Part 2-2 of the Public Governance, Performance and Accountability Act 2013 (PGPA Act) and its members must comply with duties under Division 3 of Part 2-2 of the PGPA Act.
Members recognise their role in maintaining the Bank’s reputation for integrity and propriety in all respects and so they agree to adhere to this Code of Conduct.
General principles
Members will observe the highest possible standards of ethical conduct. They will seek to enhance the Bank’s standing in the community and reputation for integrity, fairness, honesty and independence.
Provisions
Members of the Governance Board must comply with their statutory obligations in that capacity. The main sources of those obligations are the PGPA Act and the Reserve Bank Act.
Members’ obligations as officials of the Bank under the PGPA Act include, but are not limited to, obligations to exercise their powers and discharge their duties with care and diligence, honestly, in good faith and for a proper purpose.
Under the Reserve Bank Act and the secrecy declaration given by members under that Act, members are obliged at all times to maintain confidentiality in relation to the affairs of the Bank’s boards and the affairs of the Bank. Members must not divulge any information they learn as a member of the Governance Board (including any information relating to the affairs of another board of the Bank), except by authority of the Governance Board or under compulsion or obligation of law. This obligation continues after the term of the member ends.
Members’ obligations under the PGPA Act also require that they must not improperly use information obtained as a member of the Governance Board to gain an advantage for themselves or any other person or to cause detriment to the Bank or any other person. Other persons include corporations and therefore include companies of which a member is a director, adviser or employee.
Members must comply with the provisions of section 29 of the PGPA Act relating to the disclosure of material personal interests and the applicable rules made for the purposes of that section in the Public Governance, Performance and Accountability Rule 2014. Members must disclose to the other members of the Governance Board any material personal interest they have that relates to the affairs of the Bank. The disclosure must include details of the nature and extent of the interest and how the interest relates to the affairs of the Bank. Members may give standing notice to other members outlining the nature and extent of a material personal interest.
Disclosure of a material personal interest by a member may result in the member being excluded from deliberations, or taking part in any decision, with respect to the relevant matter.
Members considering taking on a material personal interest that might present, or might be perceived as presenting, a risk of conflict with their role as a Governance Board member, should consult the Chair of the Board before committing themselves in order for the matter to be managed appropriately.
Members must take great care when dealing with offers of entertainment, travel, accommodation or any other benefit from third parties. Members must avoid actual conflicts that might arise from such offers that could damage the Bank’s reputation for integrity and independence. They should also take reasonable steps to avoid any perceived conflicts that might arise in these circumstances.
Under the Reserve Bank Act, a member is not permitted to be a director, officer or employee of an Authorised Deposit-taking Institution (ADI). In addition to this legislative requirement, this Code of Conduct requires members:
- to advise the Governor of the existence of any material personal interest in an ADI or other financial entity
- not to occupy a position (whether as a contractor, consultant, agency employee or otherwise) within the organisational structure of an ADI
- not otherwise to perform any paid or unpaid work as a consultant or adviser to an ADI without prior consultation with the Governor
- not to perform any paid or unpaid work as a director, officer or employee of, or a consultant or adviser to, a holder of an Australian credit licence or any private-sector entity operating in Australia whose main business is the provision of finance without prior consultation with the Governor
- not to participate in deliberations of an entity that provides or manages insurance, a registrable superannuation entity or a managed fund more generally, where there may be an actual or perceived conflict of interest with their role and obligations as a member of the Governance Board without prior consultation with the Governor. This does not preclude members’ involvement in the governance of the entity’s investment strategy, consistent with any duties they might have as a director, but applies where a member may be involved in active management of funds for such an entity.
Members must take great care to protect the Bank’s reputation when undertaking financial transactions for their own account or when participating in decisions regarding financial transactions in relation to their business or other interests, or those of entities they control or persons whose affairs they control or influence (collectively referred to as ‘associated entities’). Members and associated entities are prohibited from undertaking transactions in foreign exchange derivatives and interest rate derivatives, and from engaging in or being involved in ‘active trading’ in ‘financial instruments’.
‘Active trading’ is regarded as trading that is frequent and speculative. ‘Financial instruments’ include interest rate products (for example, bonds, bills, notes, certificates of deposit and term deposits), shares, warrants, options, corporate bonds and foreign exchange (other than for travel purposes).
Governance Board members and associated entities must not transact in financial instruments in the ‘blackout period’, namely the period between the time at which the Monetary Policy Board papers are made available to members of the Monetary Policy Board (usually at 10.00 am Sydney time on the Friday prior to a Monetary Policy Board meeting) and 5.00 pm Sydney time on the day that the Monetary Policy Board’s monetary policy decision is announced. This restriction does not preclude passive, predetermined investments (for example, the rollover of a pre-existing term deposit, a regular pre-arranged contribution to a managed investment scheme or shares purchased under a dividend reinvestment plan). Secretary’s Department will provide Governance Board members with advance notice of the dates of each blackout period.
Members, who in the ordinary course of their activities outside the Bank have occasion to discuss matters relevant to the Bank, do so on the basis that the views so presented are personal or affiliated with another institution, not the Bank. Members agree that the Chair of the Governance Board is the spokesperson for the Board.
The Governor, Deputy Governor and Chief Operating Officer must adhere to this Code as well as to the staff Code of Conduct.
Where issues arise that are not specifically addressed in this Code, members should exercise sound judgement and behaviour consistent with the provisions of this Code and, if they are unsure about a particular issue or circumstance, they should consult the Chair of the Governance Board.