Board operations
Private sector principles of good corporate governance characterise the Board’s approach in providing oversight and direction to the Executive. A Code of Conduct and Ethics, complemented by investment and organisational policies and procedures, establish appropriate controls and a sound decision-making framework for the CEFC. Board committees further contribute to effective governance.
Board Audit and Risk Committee
The Board Audit and Risk Committee (ARC) advises and assists the Board in financial governance, financial performance, audit, annual reporting, compliance and all aspects of risk management. The ARC undertakes a quarterly assessment of the performance of the investment portfolio against Board guidelines and limits. It also maintains regular oversight of the AML/CTF compliance program, the application of CEFC Investment Policies and the risk management function.
In the 2020–21 year, the ARC reviewed the CEFC impairment provisioning methodology, governance around Board papers and the CEFC response to the pandemic. With CEFC staff working from multiple distributed locations rather than CEFC offices, the ARC also undertook a review of the organisation’s cyber security management processes.
Board People and Culture Committee
The Board People and Culture Committee (PCC) advises and assists the Board in establishing people, culture and compensation strategies, policies and initiatives for the CEFC. This includes setting, monitoring and evaluating achievement against the annual corporate key performance indicators (KPIs), setting the KPIs of the CEO, and considering executive remuneration decisions.
In the 2020–21 year, there was a specific focus on the CEFC approach to remuneration in the context of the Australian Government review of performance bonuses. Refer Appendix G. The PCC worked with management in establishing a guiding remuneration philosophy for the organisation. The PCC also reviewed the talent management strategy, provided oversight of the variable compensation plan and undertook an analysis of gender pay equity. The PCC was involved in one Executive-level recruitment during the year, with respect to the Chief Risk Officer.
Charters for the Board and its committees are available on the CEFC website.
Committee membership
All CEFC Board members are non-executive members. Board members, with the exception of the Board Chair, serve on one of the Board Committees. Committee meetings are open to all Board members, with only Committee Members having voting rights.
| Board Member | Audit and Risk Committee | People and Culture Committee |
|---|---|---|
| Leeanne Bond | Member | |
| Philip Coffey | Member | |
| Laura Reed | Chair | |
| Andrea Slattery | Member | |
| Samantha Tough | Chair | |
| Nicola Wakefield Evans | Member |
Board meeting attendance
During the year, the CEFC Board held nine meetings, the Audit and Risk Committee held five meetings and the People and Culture committee held six meetings.
| Board | Audit and Risk Committee | People and Culture Committee | ||||
|---|---|---|---|---|---|---|
| Attended | Eligible to attend | Attended | Eligible to attend | Attended | Eligible to attend | |
| Steven Skala AO | 9 | 9 | 4 | 5* | 4 | 6* |
| Leeanne Bond | 8 | 9 | 3 | 5* | 6 | 6 |
| Philip Coffey | 9 | 9 | 5 | 5 | 1 | 6* |
| Laura Reed | 8 | 9 | 5 | 5 | 1 | 6* |
| Andrea Slattery | 9 | 9 | 5 | 5* | 5 | 6 |
| Samantha Tough | 9 | 9 | 2 | 5* | 6 | 6 |
| Nicola Wakefield Evans | 9 | 9 | 5 | 5 | 0 | 6* |
* Represents non-committee members, whose attendance is optional.
Board remuneration and allowances
Under the CEFC Act and the Remuneration Tribunal Act 1973, remuneration and travel allowances for Board members are independently determined by the Australian Government Remuneration Tribunal.
| Determinations: Remuneration and Allowances | Date of effect | Ceased | Notes |
|---|---|---|---|
| Remuneration Tribunal (Remuneration and Allowances for Holders of Part-time Public Office) Determination 2020 (as amended from time to time) | 1 July 2020 | 1 July 2021 | No change to Board to member remuneration during the period |
| Remuneration Tribunal (Official Travel) Determination 2020 (as amended from time to time) | 25 August 2019 | Remains in effect |
Under the Determinations: Remuneration and Allowances, Board members received an annual fee (rather than per day or by meeting). Superannuation is payable in addition to these amounts at the rate of 9.5 per cent (10 per cent from 19 June 2021) in accordance with the Superannuation Guarantee Charge Act 1992. Actual amounts paid to Board members during the reporting period are disclosed in Note 5.2 in the Financial Statements. Non-executive Board members who are members of the Audit and Risk Committee and/or the People and Culture Committee do not receive additional remuneration for their membership of these Committees.
| Office | Annual remuneration |
|---|---|
| Chair | $110,860 |
| Board member | $55,430 |
Travel and expense reimbursement
Board members, the Executive and staff are indemnified and reimbursed for reasonable travel and work- related expenses incurred in the performance of their duties, based on verified claims and in accordance with relevant CEFC policies and Remuneration Tribunal determinations for Board Members.
Related entity transactions
The CEFC considers matters regarding potential conflicts and related entity transactions in accordance with the CEFC Act and the PGPA Act. The CEFC has policies and procedures in place to manage these matters. This includes the requirement that the Board, Executive and staff declare material personal interests that relate to the affairs of the CEFC. The Executive and staff must comply with a personal trading policy which prohibits trading in entities with which the CEFC may be doing business and/or holding material non-public price-sensitive information. Declarations of any new material personal interests are a standing agenda item at each Board and Investment Committee meeting.
The Audit and Risk Committee reviews all related entity transactions disclosed in accordance with the relevant accounting standards at Note 5.3 within the Financial Statements.
Indemnities and insurance premiums
The CEFC has provided certain indemnities and insurances to ‘officers’ of the Corporation, including Board members and senior managers.
| Indemnity/insurance | Officers covered | Coverage period | Premium/fees |
|---|---|---|---|
| Comcover Insurance for Directors’ and Officers’ Liability | All Board members and Officers | 1 July 2020 to 30 June 2021 | $16,369 |
| Deed of Access, Indemnity and Insurance | All Board members, the CEFC Executive and staff appointed by the CEFC to an external board | Date of execution until seven years after ceasing to be either a Director or Officer of the CEFC, or appointed by the CEFC to an external board | Nil: indemnity only |
| Supplementary Directors’ and Officers’ non-indemnifiable loss insurance | All Board members and Officers | 14 June 2013 to 30 June 2021 | $590,665 |
| Comcare Workers’ Compensation Insurance | All Board members and Officers | 1 July 2020 to 30 June 2021 | $39,694 |
| Indemnification for reasonable travel and expenses | All Directors, Officers and staff | Ongoing | Nil: indemnity only |
Comcover and Comcare insurance
Insurances provided by Comcover and Comcare have general application that includes Board members, the Executive and staff as per the ordinary insurances required of Commonwealth entities.