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Standards for Board Composition, Governance, Culture and Conduct

The Bank of Papua New Guinea (BPNG) regulates Australian Institutions (AI) and has outlined certain standards for Board Composition, Governance, Culture and Conduct. This article summarizes these key points.

Board Composition

A well-structured Board is essential for the success of any organization. The following guidelines outline the minimum requirements for a Board:

  • Minimum number: The Board must have at least five directors.
  • Independent Chairperson: The chairperson of the Board must be an independent director.
  • Non-executive directors: A majority of directors present and eligible to vote at all Board meetings must be non-executive directors or independent directors.
  • Independent directors: The Board must have a majority of independent directors, subject to certain exceptions.

Board Skills, Qualifications, and Evaluation

Effective governance requires a Board that is equipped with the necessary skills, qualifications, and evaluation processes. Here are some key guidelines:

  • Skills matrix: The Board must implement an independent evaluation process, including competency assessment for the Board and its committees.
  • Annual evaluation: The Board must conduct an annual evaluation process for assessing the performance of the Board, the Chairman, and each individual director.
  • Director development: The Board must dedicate sufficient time and allocate funds for director development.

Culture and Conduct

A positive culture and code of conduct are vital for promoting a healthy work environment. Here are some guidelines:

  • Code of Conduct: The Board must establish a Code of Conduct that articulates acceptable behavior for directors and staff.
  • Sign-off: Directors and employees must sign off on understanding the Code and sanctions for breaching it.
  • Whistle-blowing policy: The AI must have a whistle-blowing policy in place, providing procedures, channels, and protection for employees to communicate illegal, unethical, or questionable practices.

Disclaimer

Please note that these guidelines are general in nature and may not be applicable to your specific situation. It’s always best to consult with relevant authorities or experts for personalized advice.