Media Release Independent Review of the Reserve Bank's Oversight of Note Printing Australia and Securency
The Reserve Bank commissioned an independent review of its oversight of Note Printing Australia Limited (NPA) and of Securency International Pty Ltd. (This was outlined in the Governor's Statement to the House of Representatives Standing Committee on Economics on 8 October 2012.)
The review was conducted by Cameron Ralph Pty Ltd. The review considered in detail the appropriateness of the Bank's oversight of NPA and Securency, in the context of standards and practice in the period relevant to the charges laid against the two companies, and recommended areas for improvement in respect of the current oversight of these companies.
Cameron Ralph's conclusions were as follows (page 42):
The Bank gave reasonable consideration as to the governance arrangements for the two companies, and put in place processes for their oversight and reporting which were broadly consistent with usual practice at the time. The Bank appointed people whom it was entitled to believe could direct the affairs of the companies with due care, diligence and skill. The Bank received regular reports both at management and board level, and responded to those reports in a considered and deliberate way.
There is evidence of the Bank taking appropriate action where the entities appeared not to be performing in line with the Bank's expectations and/or standards.
Clearly, with the benefit of hindsight, there could have been more oversight applied to the activities of the companies, which may have detected earlier the alleged illegal payments. But that does not mean that the Bank's oversight at the time was inappropriate.
The Reserve Bank Board accepted the review's findings and its recommendations.
The Bank sold its shareholding in Securency in February 2013. Note Printing Australia (NPA) remains a wholly owned subsidiary of the Bank. Separately, the Reserve Bank Board also reviewed NPA's charter, corporate structure and board composition.
As a consequence of the Reserve Bank Board's review, reporting to this Board by NPA has been strengthened, and NPA's key policies and business plans will be regularly reviewed. The Reserve Bank Board appointed one of its members, Heather Ridout, to the Board of NPA. The NPA Board commissioned an independent review of the company's internal governance arrangements to identify any further improvements and ensure that its arrangements meet current best practice. The governance arrangements will be tested regularly against ASX Corporate Governance Council Corporate Governance Principles and Recommendations.