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Last reviewed: July 2016

Contents:

  1. Purpose of this Charter
  2. Values and Purpose
  3. Stakeholders
  4. Authority
  5. Roles and Responsibilities
  6. Powers
  7. Board Membership & Succession
  8. Independence, Fitness and Propriety
  9. Appointment of New Directors
  10. Election of Directors
  11. Board Renewal
  12. Chairman of the Board
  13. Meetings
  14. Board Committees
  15. Board Remuneration & Evaluation
  16. Conflicts of Interest
  17. Access to Information and Independent Advice by Directors
  18. Indemnity and Directors' and Officers' Insurance
  19. Director Eligibility
  20. Charter Review

1. Purpose of this Charter:

1.1 This Board Charter confirms the authority, roles, responsibilities and governance framework of the Board of IMB Ltd (IMB).

1.2 More detailed policies and procedures pertaining to specific corporate governance activities are contained in the Board’s Corporate Governance Manual, which supplements this Charter and which is reviewed by the Board at least annually.

2. Values and Purpose

2.1 The Board will carry out its responsibilities and exercise its powers in accordance with the IMB Group’s values of integrity, respect, performance, Member focus and offering solutions.

2.2 The Board will act at all times –

(a) in a manner designed to create and build sustainable value for all stakeholders;

(b) in accordance with obligations imposed by law and the Constitution;

(c) having full regard for its social responsibility to its communities, mutual peers and the industry in which the IMB Group operates, and the need for environmental sensitivity.

2.3 The Board recognises that its primary responsibilities underpin IMB’s purpose of providing simple, authentic, member owned banking, that helps IMB’s Members and the communities in which it operates to be better off.

2.4 The Board is committed to achieving IMB’s ‘Vision’ which is to be the leading NSW Mutual Bank.

3. Stakeholders

3.1 The IMB Group’s stakeholders, to whom the Board has direct lines of responsibilities including stewardship, welfare, service, accountability and communication, are -

(a) Members [depositors, borrowers, shareholders]

(b) Management [CEO and Executive staff]

(c) Employees

(d) Suppliers [goods and services]

(e) The Community [within IMB’s areas of operation in particular]

(f) Regulatory bodies

(g) Auditors [External and Internal]

(h) Industry Associations

(i) Directors [individually]

3.2 The Board recognises that all stakeholders are integral to the successful performance of the IMB Group and are valued accordingly.

4. Authority

4.1 The Board derives its authority to act from the Constitution of IMB and the laws governing corporate entities and authorised deposit taking institutions (ADIs) in Australia.

4.2 Under IMB’s Constitution, the Board has the discretion to delegate its powers to any committee or other person. 

5. Roles and Responsibilities

5.1 The Board is responsible for –

(a) Enhancing the prosperity of the IMB Group by providing leadership, vision and oversight of all activities of IMB, its controlled entities and entities in which it has an investment;

(b) Charting the direction of the IMB Group by the setting, implementing and monitoring the strategy of IMB;

(c) Monitoring senior management’s performance with respect to the implementation of IMB’s strategy and ensuring appropriate resources are available to execute Board approved strategies;

(d) Ensuring the Board’s and the IMB Group’s compliance with statutory and regulatory requirements;

(e) Overseeing the level and quality of IMB’s capital, commensurate with the level and extent of the risks to which IMB is exposed;

(f) Establishing effective risk management systems and overseeing the Group’s risk management systems;

(g) Reviewing and monitoring processes for the maintenance of adequate credit quality;

(h) Reviewing and monitoring systems of internal control to ensure that appropriate frameworks are in place;

(i) Approving policies of IMB and ensuring that they comply with prudential standards and other regulatory requirements.

(j) Ensuring each member of the Board is a fit and proper person as required by prudential regulation;

(k) Ensuring that directors and senior managementof IMB, collectively, have the full range of skills needed for the effective and prudent operation of the institution, and that each director has skills that allow them to make an effective contribution to Board deliberations and processes.

(l) Appointing and evaluating the performance of the Chief Executive Officer (CEO);

(m) Ensuring the safety and wellbeing of all employees within the IMB Group’s workplaces;

(n) Ensuring Directors participate in continuing education so as to ensure they are equipped to address evolving issues pertaining to the IMB Group and the industry in which IMB operates.

(o) Exercising its duties and responsibilities according to the highest prudential ethical and community standards.

(p) Setting expectations for, and continuously overseeing, the desired culture of IMB through regular review and communication of the organisational values and expected standards of behaviour.

6. Powers

6.1  In accordance with all applicable laws, regulations and the IMB Constitution, the Board will –

(a) Fix the remuneration of and evaluate the performance of the CEO on an annual basis;

(b) Delegate to the CEO the responsibilities for management of the IMB Group’s operations in accordance with the overall objectives, strategies and policies set from time to time, but above all, in a manner permitted by IMB’s Constitution. These delegations will be documented in the IMB Authorities Manual;

(c) Review annually and reset where appropriate the delegated authority levels under which the CEO will manage the operations of the IMB Group;

(d) Consider and determine any matters in excess of discretions as they arise;

(e) Review, consider and approve as appropriate –

i. The budget and the strategic plan, on an annual basis;

ii. Interim and annual financial statements;

iii. The payment of dividends to shareholders;

iv. Major organisational or structural changes to IMB Ltd or the IMB Group as such opportunities arise;

v. Major financial decisions relating to IMB’s capital structure;

vi. Public statements on significant issues relating to policy, strategy and major corporate initiatives.

7. Board Membership and Succession

7.1 The Board will comprise of no less than five and no more than ten directors. The number of Directors will be agreed by the Board from time to time, in accordance with all applicable laws, regulations and the Constitution.

7.2 The Board will establish and maintain a director succession plan set out in the Corporate Governance Manual which will incorporate such matters as the required mix of skills best suited to manage the IMB Group, the desired number of three-year terms of office that may be held by directors and detailed procedures for appointment of new directors, including a comprehensive induction programme.

8. Independence, Fitness and Propriety

8.1 The Board will ensure that at all times the requisite number of directors are “independent” in accordance with the requirements of APRA and ASIC and in line with other accepted standards of ‘best practice’ governance.

8.2 The Board will regularly assess the independence of each director. In summary, to be “independent” a director must be free of any business or other relationship that could materially interfere with the exercise of unfettered and independent judgement.

8.3 The Board will maintain a register of individual directors’ personal dealings with the Group [deposits, loans, shareholdings, related party dealings, contractual obligations, services to or by the Group].

8.4 In accordance with Prudential Standard CPS 520 which sets out APRA’s Fit and Proper Persons requirements for the ‘responsible persons’ of ADIs, all Directors will be assessed prior to appointment to the Board and annually thereafter in accordance with that standard. 

9. Appointment of New Directors

9.1 The process for appointing a director is that, when a vacancy exists, the Board assisted by the Board Corporate Governance and Remuneration Committee identifies candidates with appropriate expertise and experience. The most suitable candidate is appointed by the Board but must stand for election by members at the next annual general meeting (‘AGM’).

9.2 Each director is appointed by a formal letter of appointment setting out the key terms and conditions of their appointment to ensure that each director clearly understands IMB's expectations of him or her, including a copy of this Charter.

9.3 The Board may only consider a person as a candidate for appointment as a director if the Board Corporate Governance and Remuneration Committee recommends that the person is fit and proper for appointment as a director of IMB by reference to IMB’s fit and proper persons policy.

9.4 If the Board is assessing a person who has been nominated to be a director they will assess them against a range of criteria including background, experience, professional skills, personal qualities and their capacity to commit themselves to the Board’s activities.

9.5 Any appointment is subject to the director qualification requirements of IMB’s Constitution. 

10. Election of directors

10.1 The process for the election of a director is in accordance with IMB’s Constitution.

10.2 The names of the candidates submitted for election as director at the AGM will be accompanied by the following information to enable members to make an informed decision on their election:

(a) biographical details, including competencies and qualifications and information sufficient to enable an assessment of the independence of the candidate;

(b) relevant directorships held;

(c) particulars of other positions which involve significant time commitments;

(d) the term of office currently served by any directors subject to re-election; and

(e) any other particulars required by law.

11. Board Renewal

11.1 The Board will establish a policy that provides details of how the Board intends to renew itself in order to ensure it remains open to new ideas and independent thinking, while retaining adequate expertise. The policy will give consideration to whether directors have served on the Board for a period that could, or could reasonably be perceived to, materially interfere with their ability to act in the best interests of IMB.

11.2 The process for retirement and re-election of directors is in accordance with IMB’s Constitution which requires that directors retire by rotation at the end of the third AGM after the AGM at which the director was last appointed. Retiring directors may be eligible for re-election in accordance with the principles set out under the Corporate Governance Manual.

12. Chairman of the Board

12.1 The chairman of the Board:

(a) is appointed by the directors on an annual basis; and

(b) must be an independent non-executive director.

12.2 The responsibilities of the chairman of the Board include:

(a) providing leadership to the Board and IMB;

(b) promoting the efficient conduct of the Board's functions;

(c) monitoring the performance of the Board;

(d) facilitating Board discussions to ensure core issues facing IMB are addressed;

(e) facilitating the effective contribution and ongoing development of all directors;

(f) promoting constructive and respectful relations between Board members and between the Board and senior management;

(g) regularly meeting with the Chief Executive to be updated on current events by the Chief Executive on all matters which may be of interest to directors; and

(h) chairing the board meetings and general meetings.  

13. Meetings

13.1 The Board will schedule meetings as required for the effective discharge of its duties. Special Meetings may be called to deal with unusual or significant items where time may be of the essence.

13.2 Directors will meet regularly for private discussion as required.

13.3 Board Meeting Papers must be distributed to directors allowing sufficient time before each meeting for reading and preparation.

13.4 The Company Secretary will attend each Board Meeting and draft a set of Minutes promptly for initial review by the Chairman. The draft Minutes will be circulated to directors with the next Board Papers.

14. Board Committees

14.1 The Board may establish committees to assist it in carrying out its responsibilities, to share detailed work and to consider certain issues and functions in detail.

14.2 Under the laws governing banking in Australia, the Board must establish a Board Audit Committee, Board Risk Committee and Board Remuneration Committee with specific responsibilities.

14.3 The Chairman, with approval by directors, will appoint directors to a number of Committees each year. The Committees are as set out in detail in the Corporate Governance Manual and at a minimum include:

(a)  Board Audit Committee;

(b)  Board Risk Committee; and

(c)  Board Corporate Governance and Remuneration Committee.

14.4 The Board will from time to time establish other Committees which have a focus on particular areas of prudential compliance, strategic initiatives and the activities of IMB’s subsidiary entities.

14.5 Each Committee will operate in accordance with its own Charter, which will be reviewed annually.

14.6 Committees will act in accordance with the authorities and/or advisory powers delegated to them by the Board and subject all applicable laws, regulations and the Constitution, so to effectively deal with complex or specialised issues;

14.7 Committees will make recommendations for action to the full Board, which retains collective responsibility for decision making.

14.8 The Board will continually monitor each Committee’s activities and performance as part of its duties of care, diligence and goodfaith. 

15. Board Remuneration & Evaluation

15.1 The Board and each director will be subject to annual performance evaluations against established criteria approved by the Board.

15.2 An external independent consultant may be engaged to review and make recommendations on any aspect of the Board’s activities from time to time.

15.3 If the Chairman of the Board and/or Board Corporate Governance and Remuneration Committee determines that a particular director’s performance was unsatisfactory it may recommend to the Board that the particular director should not continue as a member of the Board or, in the case of a director due to stand for re-election at an AGM, that they should not stand for re-election.

15.4 The Board will address the matter of directors’ remuneration annually, at a time to allow any required remuneration resolution that may be required to be prepared and form part of the Notice of the Annual General Meeting.

16. Conflicts of Interest

16.1 Directors are expected to avoid any action, position or interest that conflicts with an interest of IMB, or gives the appearance of a conflict.

16.2 A director who has a material personal interest in a matter that relates to the affairs of IMB must give the other directors notice of such interest in accordance with the Corporations Act 2001(Cth) and IMB’s constitution.

16.3 Conflicts of interest will be avoided or managed in accordance with the principles set out in the Corporate Governance Manual.

16.4 Financial services may be provided to directors under terms and conditions that would normally apply to the general public. 

17. Access to Information and Independent Advice by Directors

17.1 Directors have access to any information they consider necessary to fulfil their responsibilities and to exercise independent judgement when making decisions.

17.2 Directors have access to:

(a) senior management to seek explanations and information from senior management; and

(b) auditors, both internal and external, to seek explanations and information from them without senior management being present.

17.3 Directors may seek any independent professional advice they consider necessary to fulfil their responsibilities and to exercise independent judgement when making decisions, in accordance with the requirements set out in the Corporate Governance Manual. 

18. Indemnity and Directors' and Officers' Insurance

18.1 IMB’s Constitution makes provision for IMB to indemnify each person who is or has been a director. The constitution also provides that IMB may enter into an insurance policy for the benefit of a person who is or has been a director.

18.2 IMB maintains Directors and Officers Insurance which in effect provides cover to IMB to enable it to meet its obligations to indemnify directors under the IMB’s Constitution.

18.3 IMB retains the services of an insurance broking firm to provide the Board with advice in relation to this type of insurance. 

19. Director Eligibility

19.1 It is the expectation of the Board that in accordance with the requirements of IMB’s Constitution, each Director will directly hold either a minimum of 2,000 IMB shares or $2,000 on deposit continuously throughout their term as a Director. Where a Director either directly or indirectly holds in excess of 2,000 shares, such holding is always subject to the maximum permissible shareholding rule set out in IMB’s Constitution.

20. Charter Review

20.1 The Board will review this Charter on an annual basis and make any amendments as may be required. 

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