CODE OF CONDUCT FOR RESERVE BANK BOARD MEMBERS

Preamble

The powers and duties of members of the Reserve Bank Board are set out in Section 10 of the Reserve Bank Act 1959. The Act says relatively little, however, about the conduct of members, beyond stating that they hold office subject to good behaviour. In pursuing the Bank's legislated goals, members recognise their responsibility for maintaining an unparalleled reputation for integrity and propriety in all respects. Hence they agree to adhere to this Code of Conduct.

General Principles

Members shall observe the highest possible standards of ethical conduct. They will avoid any action, or inaction, which could in any way impair the Bank's capacity to carry out its duties, or compromise its standing in the community and its reputation for integrity, fairness, honesty and independence.

Legal Requirements

Members must by law meet the general obligations of directors of statutory authorities, as set out in the Commonwealth Authorities and Companies Act 1997 (CAC Act). This explicitly states that directors must:

• discharge their duties with care and diligence;
• act in good faith, and in the best interests of the Bank;
• not use their position to benefit themselves or any other person, or to cause detriment to the Bank or any person;
• not use any information obtained by virtue of their position to benefit themselves or any other person, or to cause detriment to the Bank or any person; and
• declare any material personal interest where a conflict arises with the interests of the Bank.

The relevant sections of the CAC Act (sections 21–27) form part of this Code.

On appointment, each member signs a Declaration of Secrecy, as required under the Reserve Bank Act. This commits members to maintain secrecy in relation to the affairs of the Board and the Bank. They promise not to divulge any information in any way except as agreed by the Board or under compulsion or obligation by law. The declaration forms part of this Code.

Application

Taking as given that members are bound by the provisions of the CAC Act and the Declaration of Secrecy as above, this Code further provides that members will observe the following:

1. The confidentiality of information – including in the Board materials, and in the discussion at the meeting – must be strictly maintained, including after members have left the Board. Members shall also avoid any situation where they might be perceived as having acted with the benefit of knowledge not available to the general market place.
2. Conflicts of interest, whether of an actual or potential nature, and whether involving a member's personal or business affairs, shall be promptly and fully disclosed. Members furnish annually a confidential statement of private interests to the Treasurer. The Treasurer has provided a class order under Section 27K of the CAC Act, enabling members to discuss and decide monetary and financial stability policies. This order does not extend to other matters which may come before the Board. In the event that a member becomes aware of a conflict of interest associated with a particular issue facing the Board other than one involving monetary or financial stability policies, the Member must immediately disclose it to the Board, as required in the CAC Act, which also sets out how such conflicts are to be handled. Major changes to the interests stated in the annual declarations should be promptly disclosed to the Treasurer. Members considering taking on a material interest which might present, or might be perceived as presenting, some risk of conflict with their role as a Board member shall consult the Governor before committing themselves.
3. A member is not permitted, under section 17 of the Reserve Bank Act to be a director, officer or employee of an Authorised Deposit-taking Institution. Under this Code, a member shall not be a director, officer, employee, or have any material financial interest in any private company operating in Australia whose main business is the provision of finance.
4. Members shall take great care in financial transactions for personal account. Members shall not use information gained in their activities as a Board member and not generally available to the market place, for purposes of carrying out private financial transactions, whether directly or indirectly via third parties, or whether conducted for their own account or for the account of a third party.
5. In order to avoid any possibility of perceived conflicts that could damage the Bank's reputation, members shall exercise due care in accepting from third parties entertainment, travel or accommodation, or any other benefit which is offered solely or mainly on the basis of membership of the Board.
6. Members generally shall refrain from public commentary about current Australian monetary policy issues, respecting the confidentiality of Board discussions. Members who, in the ordinary course of their activities outside the Reserve Bank, have occasion to discuss economic policy matters generally, shall do so on the basis that the views so presented are personal or affiliated with another institution, not the Bank. The Governor and Deputy Governor will on occasion need to speak on monetary policy issues as part of their official duties, but in doing so shall still respect the confidentiality of the Board discussions.
7. The Governor and Deputy Governor shall adhere not only to this code but also to the RBA staff code of conduct.

Where questions of interpretation of this Code arise, members shall consult with the Governor. Where issues arise which cannot be specifically foreseen in this Code, members shall be expected to exercise sound judgement and behaviour consistent with the General Principles outlined above. Members shall, where appropriate, consult with the Governor and, if necessary, the Treasurer.