Board Charter Adopted by the Board: 28th May 2014 Railways Credit Union Board Charter Introduction 1.1 The Board has adopted this Charter to outline the responsibilities of the Board and the manner in which its powers and duties – including those under the Corporations Act – will be exercised and discharged. The Board is committed to, and expects the highest standards of, integrity and strict compliance with the law from all directors, senior management and employees of Railways Credit Union (‘the Credit Union’). Composition of the Board 2.1 The Board is comprised of a minimum number of directors. The number, eligibility and appointment of directors is provided for in the Constitution, Refer Division 13 – Appointment and Vacation of Office. Role of the Board 3.1 The role of the Board is to represent, protect and advance member interests by ensuring the Credit Union is managed in a sound and prudent manner by a competent Board of Directors who are capable of making reasonable and impartial business judgements in the best interests of the Credit Union and its Members. The Board is responsible for the overall stewardship, strategic direction, governance and performance of the Credit Union and, in particular is accountable for: a) Credit Union Values  Defining the character and values of the Credit Union and ensuring its employees uphold the highest standards of integrity, commitment, exceptional service, mutuality and innovation. b) Governance  Responsibility for ensuring that the Credit Union has an appropriate corporate governance framework to ensure the creation and protection of Member value;  Establishing appropriate standards and encouraging ethical behaviour;  Monitoring the Credit Union’s compliance with corporate governance standards. c) Strategy  Overseeing the development of and approving the Credit Union’s strategic direction and guiding the implementation of that strategy;  Ensuring the Credit Union has in place appropriate processes for strategic planning, reviewing current strategy and considering alternative strategies;  Directing, monitoring and assessing the Credit Union’s performance against strategic and business plans; d) Executive Management  Ensuring that there is an effective delegation of authority framework to balance the role of management in operating the Credit Union and the role of the Board in monitoring, guiding and providing oversight;  Delegating responsibility for the day to day operation and management of the Credit Union to the Chief Executive Officer (‘CEO’);  Evaluating the CEO’s performance;  Approving the system of remuneration and benefits for the CEO and his/her direct reports  Approving performance payment structure and evaluating performance of the CEO; and  Ensuring succession plans are in place for the CEO and other Executive Managers. e) Workplace Safety and Health f)  Supporting a safety culture based on a philosophy of “zero harm” to the Credit Union’s employees, contractors, customers and members of the public;  Ensuring that an appropriate workplace safety policy framework is in place to support safe workplace practices in the Credit Union.  Reviewing the effectiveness of the Credit Union's work health and safety systems and ensuring that sufficient resources are allocated to protect the health, safety and well being of all Credit Union employees. Financial  Approving the Credit Union’s goals, financial budgets and performance objectives and monitoring the Credit Union’s financial performance against those goals, financial budgets and performance objectives.  Ensuring that the Credit Union meets its accounting, financial reporting and statutory reporting obligations and that such reporting enables members, APRA and the public to make informed judgements about the Credit Union’s financial performance, position and prospects.  Approving major capital expenses and operating expenses outside of CEO delegation. g) Risk Management  Setting Risk Appetite  Determining, setting and monitoring the prudential and risk management framework within which the Credit Union must operate.  Determining, setting and monitoring the Credit Union’s high level business control systems, including (but not necessarily being limited to) its internal and external audit functions, Corporate Governance and Fit and Proper policies and practices, succession planning and business continuity planning. h) Compliance  Ensuring that the Credit Union meets and complies with its Constitutional, prudential, regulatory and other legal obligations. Role of Chairman 4.1 The Chairman is the official representative and spokesperson for the Board and must be an Independent Director. 4.2 The Chairman’s responsibilities include:  Providing leadership to the Board;  Ensuring the efficient organisation and conduct of the Board;  Chairing Board meetings;  Promoting an environment of trust, respect and openness to ensure consultative and constructive relationships between Board and Executive Management; and  Providing guidance and mentoring the CEO. Role of Vice Chair 5.1 The Board may elect one of its Directors to serve as Vice Chairman subject to that Director also being an Independent Director. 5.2 The Vice Chairman’s responsibilities include acting in the role of Chair when the Chairman is unavailable or unwilling to act as Chairman including for the purpose of chairing Board meetings and members’ general meetings. Role of Chief Executive Officer 6.1 The Chief Executive Officer (CEO) is responsible to the Board for the day-to-day management and performance of the Credit Union and for the implementation of strategic and business plans. 6.2 The CEO has primary responsibility for bringing to the attention of the Board and each Committee, issues which fall within the Board’s accountabilities or within the Committee’s accountabilities and any other issue which the CEO considers requires the attention of the Board and/or Committees. Role of Company Secretary 7.1 The Company Secretary is accountable for facilitating the Credit Union’s corporate governance processes and providing support and general advice to the Board. The Company Secretary is responsible to the Board for guidance in relation to Board procedures. 7.2 The appointment and removal of the Company Secretary is a matter for the Board. Other persons may be appointed Acting Company Secretary or as an additional Company Secretary Board Relationship with Executive Management 8.1 The CEO is accountable to the Board for the exercise of delegated authority. The CEO will report to the Board on the exercise of these powers as required by the Board. 8.2 Executive Management must supply sufficient and timely information to the Board to allow it to discharge its duties effectively. The Board must independently assess the information provided and review key elements of the operations of the Credit Union. 8.3 Specific responsibilities delegated to management are set out in the position descriptions relating to all senior management positions, and in the Credit Union’s approved delegation framework. 8.4 A key function of the Board is to monitor the performance of Executive Management according to the strategies and objectives decided by the Board. Directors have access to Executive Management through the Chairman or CEO at any time. In addition to regular attendance by Executive Management at Board meetings, Directors may seek briefings from Executive Managers, Company Secretary, the Chief Risk Officer or other Managers on specific matters in accordance with the annual Board calendar, and as otherwise required. 8.5 The Board retains the ultimate legal responsibility for the exercise of powers delegated to senior management. In particular, the Board is responsible for ensuring that powers and functions are in each case delegated in a responsible and appropriate manner and that the exercise of these powers, as well as any reports and information provided by management, are independently assessed by the Board. Director Responsibilities and Conduct 9.1 Directors are expected to assume responsibility, carry out their duties and exercise judgement with care, diligence, prudence and independence. 9.2 Directors must declare all conflicts of interest and refrain from participating in debate or in the making of any decisions where such conflicts of interest exist 9.3 Board Directors must comply with the detailed Code of Conduct for Directors. Committees 10.1 The Board may from time to time establish committees to assist it in discharging its responsibilities. 10.2 The Board may also delegate specific functions to ad hoc committees from time to time. The powers delegated to these committees are set out in board resolutions. 10.3 Except as stated in the relevant committee terms of reference, or as otherwise stated by the Board, Board committees have limited delegated authority from the Board and exist predominantly to provide recommendations to the Board on issues within the scope of the respective Committee. 10.4 The Board reviews the terms of reference of its committees periodically to ensure they remain consistent with the Board’s objectives and responsibilities. 10.5 All Directors are entitled to attend committee meetings as non-members and are entitled to receive committee papers. Review of Board performance 11.1 The Board undertakes an annual performance evaluation. 11.2 From time to time, an external consultant may be engaged by the Board to assist with the evaluation and review of Board performance. Review of Board Charter 12.1 The Board will review this Charter at least every three years to ensure it remains consistent with the Board’s objectives and responsibilities.