Entire Act

5.3. Corporate governance

5.3.1. Governing Body

An Authorised Person must have a Governing Body that meets the requirements of GEN 5.3.2 (membership), 5.3.3 (responsibilities) and 5.3.4 (competence, training and access to information).

5.3.2. Governing Body – membership

An Authorised Person’s Governing Body must comply with the requirements set out below:

(ii) act with honesty, integrity and independence of mind; and

(iii) effectively assess and challenge, where necessary, the decisions of the senior management, and oversee and monitor decision making.

5.3.3. Governing Body – responsibilities

The Governing Body of an Authorised Person must:

  • (a) define and oversee the implementation of governance arrangements that ensure the effective and prudent management of the Authorised Person in a manner which promotes the integrity of the market, which at least must include: the segregation of duties in the organisation; and the prevention of conflicts of interest in its operation;
  • (b) monitor and periodically assess the effectiveness of the Authorised Person’s governance arrangements; and
  • (c) take appropriate steps to address any deficiencies found as a result of the monitoring under sub-paragraph (b).

5.3.4. Governing Body – competence, training and access to information

An Authorised Person must:

  • (a) devote adequate human and financial resources to the induction and training of members of the Governing Body;
  • (b) ensure that the Governing Body has access to the information and documents it requires to oversee and monitor management decision-making; and
  • (c) engage a broad set of qualities and competences when recruiting Persons to the Governing Body, and for that purpose have a policy promoting diversity on the management body; and
  • (d) notify the AFSA of the identity of all the members of its Governing Body.

5.3.5. Senior management

An Authorised Person must ensure that the senior management of the Authorised Person have clear responsibility for the day‐to‐day management of the Authorised Person's business in accordance with the business objectives and strategies approved or set by the Governing Body.

5.3.6. Management information

An Authorised Person must establish and maintain arrangements to provide its Governing Body and senior management with the information necessary to organise, monitor and control its activities, to comply with all relevant Regulations and Rules and to manage risks. The information must be relevant, accurate, comprehensive, timely and reliable.

5.3.7. Remuneration structure and strategy

The Governing Body of an Authorised Person must ensure that the Remuneration structure and strategy of that Authorised Person:

  • (a) are consistent with the business objectives and strategies and the identified risk parameters within which the Authorised Person's business is to be conducted;
  • (b) provide for effective alignment of risk outcomes and the roles and functions of the Employees, taking account of:
  • (i) the nature of the roles and functions of the relevant Employees; and

(ii) whether the actions of the Employees may expose the Authorised Person to unacceptable financial, reputational and other risks;

  • (c) at a minimum, include the members of its Governing Body, the senior management, Approved Individuals and any Designated Individuals; and
  • (d) are implemented and monitored to ensure that they operate, on an on‐going basis, effectively and as intended.