Governance Board Charter March 2025

1. Introduction

The Governance Board is established under and governed by the provisions of the Reserve Bank Act 1959 (RB Act). This Charter outlines the role, responsibilities and composition of the Governance Board and the way it discharges its responsibilities under the RB Act and as accountable authority of the Reserve Bank under the Public Governance, Performance and Accountability Act 2013 (PGPA Act).

2. Role, objectives and responsibilities of the Governance Board

The key responsibilities of the Governance Board are to oversee, and determine policies for, the management and organisational affairs of the Bank, including to oversee, and determine policies for, the Bank’s balance sheet management, to the extent that doing so does not involve:

• limiting the Monetary Policy Board performing its functions or exercising its powers in ways that affect the Bank’s balance sheet;
• performing any functions conferred on the Monetary Policy Board or the Payments System Board; or
• determining the Bank’s approach for implementing the policies determined by the Monetary Policy Board or the Payments System Board.

Without limitation this means the Governance Board is (subject to the previous paragraph) to:

• set strategic objectives and the risk appetite of the Bank;
• approve the staff Code of Conduct to set the Board’s expectations for the Bank’s values and desired culture;
• oversee the management and performance of the Bank, and its corporate governance framework;
• determine the policies of the Bank for the performance of the Bank’s functions in relation to delivering banking services to the Commonwealth as the Commonwealth’s banker and financial agent;
• determine the policies of the Bank for issuing, re-issuing and cancelling Australian notes; and
• determine the policies of the Bank in relation to any other matter not covered by the functions of the Monetary Policy Board or the Payments System Board.

The Governance Board has the specific responsibilities set out in the Schedule.

In conducting its role, the Governance Board is expected to operate in accordance with the RB Act, the PGPA Act, this Charter, relevant Bank policies and applicable legal and regulatory requirements.

3. Membership

Members are the Governor, Deputy Governor, Chief Operating Officer and six non-executive members appointed by the Treasurer.

The Treasurer appoints the Chair and the Deputy Chair from among the members and at least one of these must be a non-executive member.

The Deputy Chair is to act as the Chair during a vacancy in the office of the Chair or during any period when the Chair is absent from duty or for any reason unable to perform the duties of Chair.

The Deputy Chair will provide support to, and deputise for, the Chair as required and will be available to discuss any feedback in relation to the conduct of Board meetings and performance of the Chair that members may have. If the Chair is an executive member of the Governance Board, the Deputy Chair will chair any parts of Board meetings reserved for non-executive discussion.

4. Meetings

4.1 Frequency

The Governance Board meets as often as is necessary for the efficient performance of its functions and fulfilment of its responsibilities.

The Chair can convene a meeting of the Board at any time and must convene at least four meetings each calendar year.

4.2 Absence from deliberations or decision

Members must comply with section 29 of the PGPA Act relating to material personal interests and the applicable rules made for the purposes of that section in the Public Governance, Performance and Accountability Rule 2014. This may have the result that one or more members are prevented from being present during deliberations, or taking part in any decision, with respect to a matter at a meeting.

None of the Governor, Deputy Governor and Chief Operating Officer may be present during deliberations, or take part in any decision, of the Governance Board with respect to the remuneration of the Governor or Deputy Governor or the terms or conditions on which they hold office.

4.3 Quorum

A quorum for any meeting will be seven members.

However, if one or more members is prevented from being present during deliberations, or taking part in any decision, with respect to a particular matter and as a result there is no longer a quorum present when any member or members leave the meeting, the remaining members at the meeting constitute a quorum for the purpose of any deliberation or decision at that meeting with respect to that matter.

4.4 Conduct of meetings

Meetings of the Governance Board are conducted in accordance with the RB Act.

The Chair must preside at all meetings at which the Chair is present. If the Chair is not present at a meeting, the Deputy Chair presides. If neither the Chair nor Deputy Chair is present, the other members of the Board present must appoint one of themselves to preside.

A question arising at a meeting of the Board is to be determined by a majority of the votes of the members present and voting. The person presiding at the meeting has a deliberative vote and, if the votes are equal, a casting vote.

Meetings may be held, and members may participate in meetings, by any means of communication considered appropriate by the Chair. A member who participates in any way considered appropriate by the Chair is taken to be present at the meeting and to form part of the quorum.

Members of management may attend Board meetings at the Board’s request to provide information within their areas of responsibility. The Board may invite external advisers to attend Board meetings where necessary or desirable.

4.5 Decisions without a meeting

The Board may, in accordance with section 25NU of the RB Act, make decisions without meeting if:

• a majority of the members of the Board entitled to vote on the proposed decision provide written notice (including via electronic means) signifying that they approve the resolution in question;
• that majority would have constituted a quorum had the resolution been considered at a meeting of the Board; and
• all the members of the Board were informed of the proposed decision, or reasonable efforts were made to inform all of the members of the Board of the proposed decision.

A member of the Board is not entitled to vote on a proposed decision if the member would not have been entitled to vote on that proposal if the matter had been considered at a meeting of the Board.

The resolution is passed when the last of the members who constitute the majority provides written notice of their approval.

4.6 Leave of absence

The Governance Board may grant leave of absence to any non-executive member on the terms and conditions that the Board determines.

5. Role and responsibilities of Governor as chief executive

Consistent with section 12(2) of the RB Act, the Governance Board delegates the day-to-day management of the Bank to the Governor. Except for any specific powers reserved by the Board (whether in the Schedule, in any delegation given to the Governor or otherwise) or delegated to its committees or to any individual Board member, the Governor may make all decisions and take any necessary action to conduct the management of the Bank.

The Governor is accountable to the Board in exercising this delegated authority. In the management of the Bank, the Governor’s responsibilities include, without limitation:

• implementing the strategic, business and financial objectives and plans approved by the Board;
• instilling and reinforcing the Bank’s culture, values and the staff Code of Conduct;
• when allocating resources or capital, approving expenditure or making major financial decisions, analysing the effects on the strategic and business objectives, and financial position of the Bank;
• assessing reputational and other risk consequences of decisions or actions taken; and
• implementing policies, processes, and systems, together with appropriate controls, to effectively deliver on the strategy and manage the operations and risk profile of the Bank.

The Governor is responsible for ensuring the timely preparation, presentation, adequacy and integrity of information provided to the Board, to enable the Board to fulfill its responsibilities.

6. Role and responsibilities of Secretary

The Secretary is accountable to the Governance Board, through the Chair, on matters relating to the proper functioning of the Board.

All members have direct access to the Secretary.

The Governor will consult with each of the Governance Board, Monetary Policy Board and Payments System Board in relation to the appointment and removal of the Secretary.

7. Board committees

The Governance Board may establish the committees of members it considers necessary to assist it in conducting its functions. The Board determines, and reviews as appropriate, committee memberships and charters.

Without limitation, the Board establishes, and by written charter determines the functions of, the Audit and Risk Committee.

The provisions of this Charter concerning virtual meeting participation (paragraph 4.4) and decisions without a meeting (paragraph 4.5) apply also to meetings, decisions and resolutions of the committees of the Board.

Minutes of all committee meetings are made available to all Board members and committee chairs provide verbal reports on committee business at the subsequent Board meeting.

8. Access, reliance and advice

The Governance Board has free and unfettered access to information, senior management and any other relevant internal and external party. It may make any enquiries to fulfil its responsibilities.

The Chief Risk Officer, the Head of Audit and the General Counsel have unfettered access to the Board.

The Board may obtain independent advice at the Bank’s expense. This includes by engaging and receiving advice and recommendations from appropriate independent experts. The engagement and any advice received will be independent of management but will require the prior approval of the Chair unless the Chair has a conflict of interest or obtaining that approval is not reasonably practicable in the relevant circumstances.

Board members are entitled to rely on information, advice and assurances provided by management on matters within their responsibility, and on the expertise of independent experts, provided they are not aware of any grounds that would make such reliance inappropriate.

Board performance and Charter review

The Governance Board assesses its performance and the fulfilment of its responsibilities under this Charter annually. It will arrange an externally facilitated performance review every three years.

The Board has processes in place to review the performance of its committees.

The Board reviews the adequacy of this Charter every two years, or as required.

The Secretary administers this Charter.

SCHEDULE

The Governance Board reserves to itself and is responsible for the matters specified below. Nothing in this Schedule limits the responsibilities of the Board under section 2 of this Charter or the RB Act, PGPA Act or any other law.

Culture

Approving the Codes of Conduct for the Bank’s staff and the Governance Board.

Monitoring the Bank’s culture (including risk culture), including actions to strengthen the desired culture, and encouraging staff to cooperate with others (within and outside the Bank) to achieve common objectives, where practicable.

Instructing Bank staff on disclosure of material personal interests.

Strategy, planning and performance

Endorsing strategic plans and approving budgets and financial plans (which should incorporate strategic and other perspectives considered by the Governance Board) for implementation by management.

Preparing and publishing annually the corporate plan required by the PGPA Act covering the Bank and Note Printing Australia Limited (NPA).

Approving equity investments, joint ventures, the establishment of formal legal partnerships, and divestments reserved for approval by the Governance Board.

Determining the terms of NPA’s Charter, approving appointments to the board of NPA, receiving updates on the activities of NPA and ensuring, as far as practicable, that NPA operates within the Bank’s risk appetite and does not do anything that the Bank does not have power to do.

Overseeing and approving the delegation of expenditure approval authority, including through the Governor instructing Bank staff on approving and recording expenditure commitments.

Approving operational and capital expenditure that exceeds the limits delegated to the Governor.

Overseeing major organisational transformation programs and significant projects.

Measuring and assessing the Bank’s performance in achieving its purposes and preparing and publishing an annual performance statement.

Consulting the Monetary Policy Board before doing anything that would materially affect that Board’s performance of its functions or exercise of its powers.

Consulting the Payments System Board before doing anything that would materially affect that Board’s performance of its functions or exercise of its powers.

Risk management

Overseeing the Bank’s risk management framework and its operation by management, including by approving the Risk Appetite Statement, Risk Management Policy, Risk and Compliance Management Framework and any other key risk frameworks and policies that may be reserved for approval by the Governance Board.

Overseeing the management of emerging material risks including reputational risk.

Establishing and maintaining appropriate systems of internal control and assessing the effectiveness of key internal controls.

Overseeing that the operational structure of the Bank facilitates effective risk management and that sufficient resources are dedicated to risk management.

Approving the Bank’s policies for business continuity and operational resilience.

Taking all reasonable measures to prevent, detect and deal with fraud and corruption including overseeing regular fraud and corruption risk assessments, a control plan and mechanisms for prevention, detection, investigation and reporting of fraud or corruption or suspected fraud or corruption.

Overseeing the assessment and management of environmental risks created by, or affecting, the Bank’s functions and activities (but this does not include considering the implications of climate change or environmental factors for the Australian economy or financial system, which falls within the mandate of the Monetary Policy Board).

Procurement and service providers

Approving the key frameworks and policies relating to procurement by the Bank including those applying the principles and requirements of the resource management and procurement frameworks in the PGPA Act and the Commonwealth Procurement Rules.

Overseeing policies and processes relating to the management of service providers and the contracts under which they are engaged.

Overseeing the management of material risks associated with the use of service providers on which the Bank relies to undertake a critical operation or that expose the Bank to a material operational risk.

Capital

Through the Chair, consulting with the Treasurer about the distribution of the profits of the Bank each year. This includes consulting on the amount to be set aside for contingencies, the amount to be placed to the credit of the Reserve Bank Reserve Fund and the amount to be paid to the Commonwealth.

Determining sums to be transferred from the Reserve Bank Reserve Fund to the capital of the Bank.

Financial and other reporting and accountability

Overseeing the integrity of the Bank’s accounting and corporate record keeping and reporting systems, including ensuring that records are kept of the Bank’s performance in achieving its objectives.

Approving the Bank’s annual financial statements and the annual report, and any required climate related disclosures.

Through the Chair, providing annual financial statements to the Auditor-General and ensuring that NPA’s financial statements are also audited by the Auditor-General.

Through the Chair:

• keeping the Treasurer informed of the activities of the Bank and NPA
• notifying the Treasurer of significant decisions and significant issues affecting the Bank or NPA
• providing information to the Treasurer and Finance Minister on request.

Remuneration, staffing, performance and succession

Approving the appointment and removal of the Chief Operating Officer (COO), Chief Risk Officer (CRO) and the Head of Audit and reviewing the Governor’s assessment of performance of the occupants of those positions.

Overseeing succession planning for the COO, CRO, Head of Audit and other senior staff positions.

Overseeing staff resourcing and policies relating to recruitment and development of staff.

Monitoring the performance of management including the way management manages the performance of other staff.

Approving the Bank’s remuneration principles and strategic objectives for remuneration frameworks; determining benefits of material value to employees.

Determining the remuneration of the Governor and Deputy Governor and the terms or conditions on which they hold office within the applicable limits set by the Remuneration Tribunal. The Deputy Chair of the Governance Board will keep the Treasurer, as the relevant Minister, informed about remuneration matters relating to the Governor and Deputy Governor, including performance management, where applicable. Where necessary and on the authority of the Governance Board, the Deputy Chair will communicate with the Treasurer about the remuneration of the Governor and Deputy Governor, in particular prior to appointees to these positions taking office.

Diversity

Approving the Bank’s policies and strategies for inclusion, diversity and belonging and approving measurable diversity objectives and metrics.

Work health and safety

Ensuring that the Bank has appropriate and effective health, wellbeing and safety systems, processes and procedures in place including processes for receiving and considering information regarding work, health and safety (WHS) incidents, hazards and risks.

Approving relevant WHS policies, monitoring WHS matters including by considering appropriate WHS reports and ensuring that management responds in a timely way to WHS incidents, hazards and risks.

Policy governance

Overseeing and monitoring relevant corporate governance frameworks for the Bank, including its executive accountability framework.

Approving governance policies that require, or are reserved for, Governance Board approval and overseeing the implementation of systems and processes for compliance with those policies.

Other matters

Determining arrangements for custody of the Bank’s seal and authorising use of the seal.

Approving the terms of any indemnity to a member of any of the Bank’s boards or the Audit and Risk Committee.

Approving any policy relating to indemnification of Bank staff or assistance to staff in relation to legal proceedings.

Approving any documents required by legislation or regulation to be approved by the Governance Board.