Code of Conduct for Reserve Bank Board Members
The duty of the Reserve Bank Board to direct the policy and powers of the Reserve Bank is set out in section 10 of the Reserve Bank Act 1959. In light of the Bank's legislated goals, members recognise their role in maintaining the Bank's reputation for integrity and propriety in all respects. Hence they agree to adhere to this Code of Conduct.
Members will observe the highest possible standards of ethical conduct. They will seek to enhance, and will not impair, the Bank's exercise of its powers, standing in the community and reputation for integrity, fairness, honesty and independence.
Members must comply with their statutory obligations as directors of the Bank. The main sources of those obligations are the Commonwealth Authorities and Companies Act 1997 (CAC Act) and the Reserve Bank Act.
Members' obligations under the CAC Act include, but are not limited to, obligations to exercise their powers and discharge their duties with care and diligence, and to act in good faith in the best interests of the Bank. Under the Reserve Bank Act, members are obliged at all times to maintain secrecy in relation to the affairs of the Board and the Bank, and not divulge any information they learn as a member, except as agreed by the Board or under compulsion or obligation by law.
Under a class order made by the Treasurer in 2001, members must furnish a confidential statement of material personal interests to the Treasurer annually, and notify any substantial change since their previous annual statement. Compliance with this class order enables members to discuss and decide monetary and financial system stability policies, and matters relating to indemnities to members of the Reserve Bank Board and Payments System Board, notwithstanding a material personal interest in the outcome. The class order does not extend to other matters that may come before the Board.
Members must also declare to the other members of the Board any material personal interest they have in a matter relating to the affairs of the Bank. Members may give standing notice to other members outlining the nature and extent of a material personal interest.
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 Board member, should consult the Governor before committing themselves.
Members must take great care when dealing with offers of entertainment, travel, accommodation or any other benefit from third parties. Members must avoid any possibility of actual or perceived conflicts that might arise from such offers that could damage the Bank's reputation for integrity and independence.
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 (this is in addition to the disclosure to the Treasurer under the class order)
- not to perform any paid or unpaid work as a consultant or adviser to an ADI
- 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
- 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 Reserve Bank Board. 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 does preclude members from participating in active management of funds for such an entity.
Members must not improperly use information obtained as a Board member to gain an advantage for someone else or themselves or to cause detriment to the Bank or any other person.
Members must take great care to protect the Bank's reputation when engaging in financial transactions for their personal account.
Members must respect the confidentiality of information obtained as a Board member and Board discussions, both during and after their term. Members, who in the ordinary course of their activities outside the Bank have occasion to discuss economic matters, will do so on the basis that the views so presented are personal or affiliated with another institution, not the Bank.
Members accept that the Governor, and where appropriate on occasion the Deputy Governor, is the only spokesperson for the Board on monetary and financial system stability policy matters.
The Governor and Deputy Governor must adhere to this Code as well as to the Bank's Code of Conduct for its staff.
Where questions of interpretation of this Code arise, members should consult with the Governor. 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.