Board Committees

Chapter 36 of this Stage 2 Key Code and Advanced Handbook examines board committees. This begins with the Audit Committee with a review of Audit Committee variables from Stage 1 including a review of the [AudCom] (+) variable relational effect path from Stage 1 with a coverage/rating of +6/75.00 rprox. We then examine the ASX’s safeguarding of the integrity of corporate reports and the APRA Prudential Standard 510 on the Board Audit Committee. There follows the requirements of the BCBS Audit Committee and NAB Self-Assessment 2018. We then move to the APRA shortcomings in the operation of the audit committee, ‘red’ audit reports failings in audit committee practice, APRA audit committee reporting weaknesses and reliance on key individuals and conclude with the Westpac audit committee reporting from group audit. Other committees examined include the Board Risk Committee (BRC), Compensation/Remuneration Committee and other committees including the Nomination and Governance Committee, the Ethics, Compliance and Reputation Committee and NAB’s Customer Outcomes Committee. The examination then turns to consider APRA’s failings in board committees including failings in communication between board committees, failings in the candour of messaging to the board and its committees, over-confidence and lack of benchmarking. There follows APRA’s failings in senior executive leadership giving rise to a Non-Financial Risk Committee (NFRCm) and examining the Executive Committee and Non-Financial Risk Committee. We conclude with APRA’s improvements in non-financial risk management in relation to operational, compliance and conduct risks (NFRMan) and APRA’s observations that acknowledged weaknesses are already known (NFRWeak).