Reserve Bank of Australia Annual Report – 2009 Governance

The Reserve Bank Board

The Reserve Bank Board comprises the Governor (Chairman), Deputy Governor (Deputy Chairman), Secretary to the Treasury and six external members appointed by the Treasurer, a total of nine. There was no change in the composition of the Board during the year; current members are shown here and on page 9 and 10.

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 Head Office in Sydney. From time to time, Board meetings are held in other Australian capitals. During the year, the December 2008 meeting was held in Melbourne and the April 2009 meeting in Brisbane.

Board Meetings in 2008/09
Attendance by Members(a)
Glenn Stevens 11 (11)
Ric Battellino 11 (11)
Ken Henry(b) 9 (11)
John Akehurst 11 (11)
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 two meeting in place of Ken Henry, as provided in section 22 of the Reserve Bank Act 1959

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 confidentiality 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

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;
  • 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; and
  • enhance contact between management and the Audit Department.

The Committee also acts, at the request of the Board of Note Printing Australia Limited (NPA), as NPA's Audit Committee.

Jillian Broadbent, an external member of the Reserve Bank Board, has chaired the Audit Committee since August 2008. Other members of the Committee are Ric Battellino (Deputy Governor), George Bennett (a company director and former National Executive Chairman of KPMG Peat Marwick) and, from March 2009, Roger Corbett (also an external member of the Reserve Bank Board). The appointment of Mr Corbett brings the size of the Committee equal to that of comparable organisations.

During 2008/09, the Committee met on four occasions. The external members of the Audit Committee also meet, at least annually, with the external auditors in the absence of management. At its July 2009 meeting, the Committee considered the draft financial statements for the year ended 30 June 2009 and agreed that the statements be presented to the Reserve Bank Board with its endorsement.