Banking (prudential standard) determination No. 1 of 2009 - Prudential Standard APS 510 - Governance
Board Remuneration CommitteeBoard Remuneration Committee
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Board Remuneration Committee
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A regulated institution (other than a foreign ADI) must, unless otherwise approved in writing by APRA, have a Board Remuneration Committee that complies with the requirements of this Prudential Standard.
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The Board Remuneration Committee must have at least three members. All members of the Committee must be non-executive directors of the regulated institution. A majority of the members of the Committee must be independent. The chairperson of the Committee must be an independent director of the regulated institution.
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The Board Remuneration Committee must have a written charter and terms of reference that outline the Committee’s roles, responsibilities and terms of operation. The Remuneration Committee must be provided with the powers necessary to enable it to perform its functions.
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The responsibilities of the Board Remuneration Committee must include:
(a) conducting regular reviews of, and making recommendations to the Board on, the Remuneration Policy. This must include an assessment of the Remuneration Policy’s effectiveness and compliance with the requirements of this Prudential Standard;
(b) making annual recommendations to the Board on the remuneration of the Chief Executive Officer (CEO), direct reports of the CEO, other persons whose activities may in the Board Remuneration Committee’s opinion affect the financial soundness of the institution, and any other person specified by APRA; and
(c) making annual recommendations to the Board on the remuneration of the categories of persons covered by the Remuneration Policy (other than those persons for whom such recommendations are already required under paragraph 50(b)).
- The Board Remuneration Committee, or in the case of a foreign ADI, the senior officer outside Australia, must:
(a) have free and unfettered access to risk and financial control personnel and other parties (internal and external) in carrying out its duties; and
(b) if choosing to engage third-party experts, have power to do so in a manner that ensures that the engagement, including any advice received, is independent.
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Where a regulated institution is part of a corporate group, the Board of the regulated institution may use a group Board Remuneration Committee in order to meet the requirements of paragraph 47 of this Prudential Standard, provided that the other requirements set out in this Prudential Standard are met and the Board of the regulated institution has unfettered access to the group Board Remuneration Committee.
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For foreign ADIs, the senior officer outside Australia must: