Reserve Bank of Australia Annual Report – 2008 Governance
The Reserve Bank Board
The Reserve Bank Board comprises nine members: the Governor (Chairman), Deputy Governor (Deputy Chairman), Secretary to the Treasury and six external members appointed by the Treasurer.
In December 2007, the Australian Government introduced new arrangements under which the Secretary to the Treasury and the Governor will maintain a register of eminent candidates of the highest integrity from which the Treasurer will make new appointments to the Board. This initiative was contained in the fourth Statement on the Conduct of Monetary Policy agreed between the Governor and the Treasurer. In May 2008, Jillian Broadbent was re‑appointed to the Board for a third term of five years. Current members are shown here and on page 9.
The Board meets 11 times a year, on the first Tuesday of each month except in January. Five members form a quorum.
Most meetings are held at the Reserve Bank's Head Office in Sydney. By custom, one meeting each year is held in Melbourne – this year in April. From time to time the Board also meets in other Australian capitals, with the September 2007 meeting held in Perth.
| Glenn Stevens | 11 | (11) |
|---|---|---|
| Ric Battellino | 11 | (11) |
| Ken Henry(b) | 10 | (11) |
| John Akehurst(c) | 7 | (8) |
| Jillian Broadbent | 11 | (11) |
| Roger Corbett | 10 | (11) |
| Graham Kraehe | 10 | (11) |
| Donald McGauchie | 11 | (11) |
| Warwick McKibbin | 10 | (11) |
|
(a) Figures in brackets show the number of meetings each member was eligible to attend. (b) David Gruen (Executive Director, Macroeconomic Group, Australian Treasury) attended one meeting in place of Ken Henry, as provided in section 22 of the Reserve Bank Act 1959. (c) John Akehurst was appointed to the Board on 31 August 2007 and sworn in as a member on 23 September 2007. |
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Conduct of Reserve Bank Board Members
On appointment to the Reserve Bank Board, each member is required under the Reserve Bank Act 1959 to sign a declaration to maintain secrecy in relation to the affairs of the Board and the Reserve Bank. Further, by law, members must meet the general obligations of directors of statutory authorities, as set out in the Commonwealth Authorities and Companies Act 1997 (CAC Act). The CAC Act sets standards of conduct for directors and officers of Commonwealth authorities. Directors must:
- discharge their duties with care and diligence;
- act in good faith, and in the best interests of the Reserve Bank;
- not use their position to benefit themselves or any other person, or to cause detriment to the Reserve 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 Reserve Bank or any person; and
- declare any material personal interest where a conflict arises with the interests of the Reserve Bank.
Over and above these legislated requirements, members recognise their responsibility for maintaining a reputation for integrity and propriety on the part of the Board and the Reserve Bank in all respects. Members have adopted a Code of Conduct that provides a number of general principles as a guide for their conduct in fulfilling their duties and responsibilities as members of the Board; a copy of the Code is on the Bank's website.
Remuneration and Indemnities
Fees of the non-executive members of the Reserve Bank Board are determined by the Commonwealth Remuneration Tribunal.
A committee of the non-executive Reserve Bank Board members reviews annually the remuneration of the Governor and Deputy Governor as required by section 24A of the Reserve Bank Act.
Under the provisions of section 27 of the CAC Act and pursuant to a Board resolution on 3 November 1998, members of the Reserve Bank Board have been indemnified against liabilities incurred arising out of the proper discharge of their responsibilities, provided that any such liability does not arise from conduct involving a lack of good faith. This indemnity does not extend to claims by the Reserve Bank itself or any subsidiary of the Bank. A similar indemnity was extended to the members of the Payments System Board, pursuant to a resolution by the Reserve Bank Board on 3 November 1998.
Audit Committee
The objectives of the Audit Committee of the Reserve Bank Board are to:
- ensure a high-quality, independent and effective audit process; and
- assist the Governor and the Board in fulfilling their obligations relating to financial reporting, compliance with laws and regulations, internal control and risk assessment, employee conflicts of interest, business ethics and prevention of fraud.
The Committee also acts, at the request of the Board of Note Printing Australia Limited (NPA), as NPA's Audit Committee.
Members of the Audit Committee during 2007/08 were the Deputy Governor (Chairman), a non-executive member of the Reserve Bank Board, Jillian Broadbent, and an external member, George Bennett, company director and former National Executive Chairman of KPMG Peat Marwick. At its August 2008 meeting, the Board appointed Ms Broadbent as Chairman of the Audit Committee, to comply with amendments to regulations issued under the CAC Act that apply to audit committees of Commonwealth authorities, which provide that the chair must not be an executive director of the authority. The Deputy Governor will remain a member of the Audit Committee for the time being.
During 2007/08, the Committee met on four occasions; all members attended each of these meetings. The two external members of the Audit Committee also meet with the external auditors, in the absence of management, annually. At its July 2008 meeting, the Committee considered the draft financial statements for the year ended 30 June 2008 and agreed that the statements be presented to the Reserve Bank Board with its endorsement.
