Corporate Governance - CUA
 

Corporate Governance

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The Board of Credit Union Australia Ltd (CUA) is responsible for the corporate governance of CUA and its controlled entities.

CUA is an Authorised Deposit-taking Institution (ADI) supervised by the Australian Prudential Regulation Authority (APRA) under the Banking Act 1959 (Cwlth). CUA is also supervised by the Australian Securities and Investments Commission (ASIC) under the Corporations Act 2001 (Cwlth) and has been granted an Australian Financial Services Licence and an Australian Credit Licence.

Role of the Board

The Board's primary role is to protect and enhance long-term member value. To fulfil this role, the Board is responsible for providing strategic guidance to CUA and its related bodies corporate (the "CUA Group"); monitoring and providing effective oversight of CUA management; overseeing CUA's risk management systems; and acting as an interface between CUA and its members.

The Board has delegated responsibility for the operation and administration of CUA to the Chief Executive Officer (CEO). The role and responsibility of the CUA Board is set out in detail in CUA's Board Charter.

Board processes

The Board holds regular scheduled meetings each year, as well as strategic planning meetings and any other meetings that may be required from time to time.

To assist in the execution of its responsibilities, the Board has established a number of key committees, each with its own charter. Details of the various Board committees are outlined below.

Composition of the Board

The Constitution of CUA specifies that the number of directors shall be a minimum of six and that their term of office is normally three years. Currently the Board comprises six independent non-executive directors.  The CEO of CUA attends all board meetings.

Conflict of interest

In accordance with the Corporations Act and CUA's Constitution, directors must keep the Board advised of any interest that could potentially conflict with the interests of CUA. The Board has developed guidelines to assist directors in disclosing potential conflicts of interest. Directors' disclosures are formally updated annually as part of CUA's Fit and Proper process. Transactions between non-executive directors and CUA are subject to the same terms and conditions that apply to members.

Board performance assessment

The Board is committed to continual improvement and has in place an annual evaluation process for assessing the Board and individual directors.

Independent professional advice and access to credit union information

Each director has the right of access to all relevant credit union information and to CUA's management. Where there is a legal issue that may affect a director's ability to exercise his or her duty as a director and/or a potential or actual conflict of interest, subject to prior consultation with and approval of the Chair, a director may seek independent professional advice from a suitably qualified adviser in the field, at the expense of CUA.

Member participation

Each member has two relationships with CUA: as a customer and as an owner or shareholder. As customers, members exercise choice by selecting the products and services they believe best suit their individual needs. As owners and shareholders, members have the right and are encouraged to participate in some of the activities of their credit union, including nominating and electing other members as directors, and attending or participating at annual general meetings, either in person or by proxy.

Ethics

To maintain member confidence in the integrity of CUA, directors have adopted and adhere to a directors' code of conduct, which is based on the code developed by the Australian Institute of Company Directors.

CUA is committed to the principles of mutuality and is driven by its vision and values. The principles established here guide CUA's behaviour and interaction with customers, other credit unions, staff and the broader community.

CUA is also committed to the privacy of member information. For further information on how the CUA Group respects the privacy of our members personal information, visit Privacy and Disclaimer.

CUA has in place an independent whistleblower protection program to facilitate and encourage confidential reporting of unacceptable or undesirable conduct.

Risk management

CUA manages a diverse range of significant risks. To this end, the Board of CUA and its subsidiaries are committed to identifying and managing these risks throughout the CUA group. The Board, through the CEO and Chief Risk Officer (CRO), has established a risk management system for assessing, monitoring and managing these risks.  The Board Risk Committee receives and reviews regular risk management reports.

Remuneration policies for directors

In determining director remuneration, the Board obtains independent advice on the appropriateness of remuneration given trends in comparable companies. Remuneration levels are designed to attract and retain appropriately qualified and experienced non-executive directors. Non-executive directors do not receive any performance-related remuneration.

Directors' remuneration covers all CUA Board activities, membership of committees and subsidiary companies and includes any superannuation contributions paid on behalf of a director. Subject to meeting specific criteria, directors retiring from the Board may receive a termination payment of up to one year's directors' fees based on the average fees of the last three years.

Board committees

To assist in the execution of its responsibilities, the Board has established a number of committees, each with its own charter. Details of the Committees currently in place are outlined below.

Board Audit Committee

The Board Audit Committee is established by the Board of Directors of CUA to assist the Board in:

  • reviewing the effectiveness of the CUA Group financial reporting and professional accounting requirements and approving CUA's annual financial statements;
  • overseeing the internal and external audit function; and
  • monitoring compliance with statutory reporting, other legislative requirements (including APRA & ASIC) and internal company policy.

Board Risk Committee

The Board Risk Committee is established by the Board of Directors of CUA to assist the Board in:

  • advising the Board on the overall current and future risk appetite and risk management strategy;
  • overseeing and monitoring the management and alignment of current and future risks across the CUA Group relative to our risk appetite and capital management;
  • ensuring that CUA meets prudential and statutory requirements, in relation to the management of risk;
  • ensuring that CUA has in place a risk management strategy, framework and management practices which limit the Group's' risks to prudent levels;
  • oversight of the appointment and removal of the Chief Risk Officer (CRO), and reviewing the performance and setting the objectives of the CRO; and
  • providing an objective view on the effectiveness of, and assurance over, the internal control environment (including the risk management framework and financial and statutory reporting controls) of the CUA Group.

Board Remuneration Committee

The Board Remuneration Committee is established by the Board of Directors of CUA to:

  • assist the CUA Board in discharging its responsibilities in relation to remuneration matters under CPS 510 and to provide advice and recommendations to the Board as to:
    • CUA's remuneration framework for non-executive directors;
    • CUA's Remuneration Policy and performance based incentive framework;
    • strategic human resources and workplace health and safety policies;
    • succession planning; and
    • certain fit and proper assessments and related issues.
  • assess all persons (nominee(s)), including existing directors, prior to appointment or election as a director under Appendix 3 of the CUA Constitution, as to their fitness and proprietary to be and act as a director, by reference to the company's Fit and Proper Policy.

Board Strategy & Innovation Committee

The Board Strategy & Innovation Committee is established by the Board of Directors of CUA to assist the Board in:

  • monitoring and providing guidance to management on the progression of major strategic issues, opportunities and initiatives;
  • evaluating and providing recommendations to the Board on major strategic issues or proposals, and
  • monitoring and providing guidance to management on transformation, innovation or technologically related strategies and major projects.

Controlled entities

The activities of the subsidiaries in the CUA group are overseen by their own Board of directors, principally drawn from the CUA Board and CUA executive management. These entities operate within the Group's Corporate Governance Framework.

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