Document ID: chunk:federal_register_of_legislation:F2023L01348:front:0:p8
Version: federal_register_of_legislation:F2023L01348
Segment Type: other
Provision Reference: 
Character Range: 19640–22798

of a body corporate (including a service company) that is a related body corporate or connected entity, of the APRA-regulated entity;
(c)          the approach to identify and mitigate material conflicts to the objectives of the remuneration framework, as specified in paragraph 21 of this Prudential Standard, that may result from third-party service provider compensation arrangements; and
(d)          the systems and processes that support the implementation of the entity's remuneration arrangements, including those that cover the assessment and management of performance, conduct and consequences.

Role of the Board
23.         The Board, or relevant oversight function, of an APRA-regulated entity is ultimately responsible for the entity's remuneration framework and its effective application.
24.         The Board, or relevant oversight function, must approve the remuneration policy required under paragraph 22 of this Prudential Standard.
25.         The Board must establish a Board Remuneration Committee that:
(a)          oversees the design, operation and monitoring of the remuneration framework;
(b)          is appropriately composed to enable it to exercise competent and independent judgment when fulfilling requirements under paragraph 25(a) above; and
(c)          has the powers necessary to perform its functions.

Board Remuneration Committee
26.         The Board Remuneration Committee must have at least three members and all members must be non-executive directors of the entity.
27.         For an entity that is not an RSE licensee, a majority of members of the Committee must be independent and the chairperson of the Committee must be an independent director of the entity.
28.         For an RSE licensee, the chairperson of the Board may sit on the Board Remuneration Committee, but may not chair the Committee except where the chairperson of the Board is the only independent director on the Board.
29.         The Board Remuneration Committee must have a written charter that sets out its roles, responsibilities and terms of operation.
30.         The Board Remuneration Committee, or relevant oversight function, must consult the Board Risk Committee[11] and Chief Risk Officer or person in a similar role, to enable risk outcomes to be appropriately reflected in remuneration outcomes for persons in specified roles. This consultation must follow a documented process.
31.         The Board Remuneration Committee, or relevant oversight function, must obtain comprehensive reporting that will allow it to determine whether remuneration outcomes of all remuneration arrangements align with paragraph 21 of this Prudential Standard.
32.         The Board Remuneration Committee, or relevant oversight function, in carrying out its duties must:
(a)          have free and unfettered access to other Board committees;
(b)          have free and unfettered access to risk and financial control personnel and other relevant parties (internal and external); and
(c)          if choosing to engage third-party experts, have the power to do so in a manner that ensures that the engagement, including any advice received, is