CTHRepealedLegislation
Banking, Insurance and Life Insurance (prudential standards) determination No. 3 of 2011 - Prudential Standard CPS 510 - Governance
Prudential Standard CPS 510Prudential Standard CPS 510
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Prudential Standard CPS 510
Governance
| Objectives and key requirements of this Prudential StandardThe ultimate responsibility for the sound and prudent management of an APRA‑regulated institution rests with its Board of directors (or equivalent).It is essential that a regulated institution has a sound governance framework and conducts its affairs with a high degree of integrity. A culture that promotes good governance benefits all stakeholders of a regulated institution and helps to maintain public confidence in the institution.This Prudential Standard sets out minimum foundations for good governance of a regulated institution in the deposit‑taking, general insurance and life insurance industries. It aims to ensure that a regulated institution is managed soundly and prudently by a competent Board (or equivalent), which can make reasonable and impartial business judgements in the best interests of the institution and which duly considers the impact of its decisions on depositors or policyholders.The governance of a regulated institution builds on these foundations in ways that take account of the institution’s size, complexity and risk profile.The key requirements of this Prudential Standard for locally incorporated regulated institutions include:specific requirements with respect to Board size and composition;the chairperson of the Board of directors must be an independent director;a Board Audit Committee must be established;the Board must have a policy on Board renewal and procedures for assessing Board performance; anda Board Remuneration Committee must be established.Other requirements for a regulated institution include:the institution must have a Remuneration Policy that aligns remuneration and risk management;the institution must have a dedicated internal audit function; andcertain provisions dealing with independence requirements apply for auditors consistent with those in the Corporations Act 2001.A number of the requirements in this Prudential Standard apply to foreign authorised deposit-taking institutions, Category C insurers and eligible foreign life insurance companies. |
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