The key changes to SPS 510 and SPG 510 are designed to ensure
RSE licensees have a governance framework which sets out policies
and procedures to achieve appropriate skills, structure and
composition of the Board and a suitable process for the nomination,
appointment and removal of directors that support appropriate Board
composition and renewal on an ongoing basis.
Revised SPS 510 requires RSE licensees to have in place policies
that address at a minimum:
a formal charter that sets out the roles, responsibilities and
objectives of the Board;
the Board's policy in relation to voting rights and
procedures for the decisions of the Board;
Board policies to address the process for nomination,
appointment and removal of director and Board renewal;
Board policies to address the size and composition of the Board
and any Board committees;
the process by which disputes about nominations, appointment
and re-appointment or removal of directors will be managed;
when and how a director can be removed from the Board; and
the RSE licensee's policies and processes to manage risks
relating to the fitness and propriety of responsible persons and
the management of conflicts.
The Board will be responsible for implementing the policies and
processes in relation to the nomination, appointment and removal of
directors and must set defined terms and the maximum tenure limit
for individual directors.
APRA expects a Board to establish a process to ensure that
governance risks are properly and regularly evaluated and managed
by the Board. Governance risks include, but are not limited to,
risks associated with:
accountability and transparency of decision-making
delegation of roles and responsibilities;
fitness and propriety; and
the management of conflicts of interest.
Where an RSE licensee already has in place a policy that
satisfies requirements set out in SPS 510, the RSE licensee may
incorporate such policies by reference into the governance
framework. This means that, the materials do not have to be
duplicated for the purposes of complying with the requirements of
Final SPS 510 will take effect on 1 July 2017, however APRA
expects RSE licensees to consider the guidance in SPG 510
immediately. Given an RSE licensee's framework will not only
include their Board charter and policies but the trustee
constitution as well, Boards will need to move quickly to start the
consultation process with stakeholders, and also among the
directors, to have their framework in pace by 1 July 2017.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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