The Australian Prudential Regulation Authority (APRA) has released draft prudential standards and a discussion paper outlining proposed governance arrangements for authorised deposit-taking institutions (ADIs), general insurers, life insurers and authorised non-operating holding companies (NOHCs).
The objectives are to ensure that an ADI is well managed, has access to appropriate independent expertise, and gives due consideration to the impact of its decisions on depositors.
The draft standards are stricter than the ASX guidelines as previously explained by APRA Chair John Laker.
Key provisions include:
- a majority of independent non-executive directors on a board;
- the requirement for a policy on boartd renewal (in lieu of fixed terms for directors);
- no prohibition on a director serving onn the board of more than one APRA-regulated institution;
- a period of at least 3 years must pass before a chief executive can become chair;
- provision to APRA of written details of the resignation or removal of a director within 14 days.
Comments on the discussion paper and draft prudential standards are invited by 12 August 2005.
A "fit and proper" person standard will be released soon.