Banking, Insurance and Life Insurance (prudential standards) determination No. 3 of 2011 - Prudential Standard CPS 510 - Governance
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Board composition
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The Board of a locally incorporated regulated institution must have a minimum of five directors at all times.
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The Board must have a majority of independent directors at all times. For a locally incorporated regulated institution that is a subsidiary[3] of another APRA‑regulated institution or overseas equivalent[4], exceptions may apply as set out at paragraphs 29 to 31. For a locally incorporated regulated institution that is a subsidiary of a parent company that is not prudentially regulated, exceptions may apply as set out at paragraph 32.
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The chairperson of the Board must be an independent director of the regulated institution.
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A majority of directors present and eligible to vote at all Board meetings must be non-executive directors.
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The chairperson of the Board cannot have been the Chief Executive Officer (CEO) of the regulated institution at any time during the previous three years. If the position of the CEO is unexpectedly vacated, the chairperson may serve as an interim CEO. After a period of 90 days, approval must be sought from APRA to allow this arrangement to continue.
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The chairperson must be available to meet with APRA on request.
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For a locally owned and incorporated regulated institution, a majority of directors must be ordinarily resident in Australia.
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For a foreign-owned, locally incorporated regulated institution, at least two of the directors must be ordinarily resident in Australia, at least one of whom must also be independent.