St.George Board Charter

Board Structure

Composition

The composition of the Board is determined having regard to the following criteria:

The requirements of the Bank’s Constitution (the ‘Constitution’);
The requirements and recommendations of the Australian Securities Exchange and applicable legislation.
Australian Prudential Regulation Authority’s (APRA) Prudential Standard 510 – Governance
At all times there must be not less than five directors.
The Chairman of the Board must be an independent director.
The Chairman of the Board will not have been the Managing Director/Chief Executive Officer of the Bank at any time during the previous three years.
The Board will comprise of a majority of independent directors.
A majority of directors must be ordinarily resident in Australia.
A majority of directors present and eligible to vote at all Board meetings must be non-executives.
Board representation must be consistent with the Bank’s shareholding.
The Board requires directors to have a broad range of commercial expertise and experience, particularly in a field which is complementary to the Bank’s activities and strategy, or with appropriate professional qualifications, who are able to bring value to the Board’s deliberations.
Board members must have a proven ability and capacity to make meaningful contributions to Board strategy and policy and be able, through questioning and analysis of reports, to participate in the monitoring of the proper functioning of management.
Any changes in Board membership must be made in accordance with the Westpac Group’s “Fit and Proper Policy” and the relevant Prudential Standards of the Australian Prudential Regulation Authority

Pursuant to the Board’s delegation to the Westpac Board Nominations Committee, that Committee shall consider and make recommendations to the Board regarding the composition and remuneration of the Board, and on any proposed Board performance criteria.

Chairman

The Chairman will be an independent director.

Assessing The Independence Of Directors

The Board shall regularly assess the independence of each director in light of interests disclosed by them and in accordance with Westpac’s ‘Definition of Independence’ which reflects the tests adopted by relevant regulators including APRA.

In assessing independence, the Board will consider the ASX Corporate Governance Council’s “Corporate Governance Principles and Recommendations” and the prudential standards of the Australian Prudential Regulation Authority and relevant corporate governance requirements in other jurisdiction which the Westpac Group is required to comply with from time to time.

Independent status will not of necessity be lost by a director being in a position of conflict in relation to a matter under consideration by the Board. Such a conflict should be notified to the Board by the director and the Board may require that the director take no further part in consideration of the matter, or ask that he or she be absent from relevant discussion.

Each director must provide the Board with all relevant information to assess his or her independence.

The assessment of independence will be conducted in accordance with the same processes as are applied for the Westpac Group.

Appointments to the Board

Directors may be appointed to fill a casual vacancy under the Constitution or be elected at a general meeting to hold office pursuant to the Constitution.

Re-election of Directors/Board Renewal

The Board renews itself in order for it to remain open to new ideas and independent thinking, while retaining adequate expertise. The Board conducts an annual review process of its constituent members’ performance (as described below).

Where it is proposed that a Westpac director be appointed to the St.George Board, the appointment will be made in accordance with Westpac’s Group Policy ‘Appointment of Directors to Subsidiaries’.

Performance Review Process

The Board will meet at least once each year to review the performance of the Board, the Board Audit Committee, the Bank, its Senior Executives, the relationship between the Board and management and matters of general corporate governance.

At least once every year, the Chairman of the Board will conduct a review of the performance and contribution to the Board of each non executive director. The Chairman will also conduct an annual performance review of each director and annually reassess the fitness and propriety of each independent director, in line with the Westpac Group’s Fit and Proper Policy. Westpac’s Board Nominations Committee will facilitate an evaluation by all Directors of the performance of the Chairman of the Board.

Fulfilment of Requirements at Law and Ethical Standards

A director of the Bank must understand the duties of a director, particularly in the context of the Bank’s status as a publicly listed company and the holder of an authority under the Banking Act, 1959 (Commonwealth). A director is expected to perform such duties having regard to the interests of the Bank’s shareholders and other relevant stakeholders and in accordance with law.

Members of the Board must be available to meet with the Australian Prudential Regulation Authority on request.

Board members are expected to observe the highest standards of ethical behaviour. The Board supports and encourages policies within the Bank which ensure that directors and staff observe high standards of personal integrity and display honesty in all their dealings.

Board Business

Role Of The Board

On 1 December 2008, St.George became a subsidiary of Westpac Banking Corporation. The operations of St.George are progressively being integrated into the wider group. In that context, the role of the Board includes informing itself in respect of the Westpac Group and its operations in order to assess their impact on the corporate health of St.George - specifically its solvency and capital adequacy – and to continue to exercise non-delegable powers.

Much of the Board’s roles and responsibilities will be delegated to management and/or Westpac Board Committees.

The Board’s principal functions are of monitoring and oversight in particular on any issues which might impact St.George’s compliance with its regulatory obligations as an ADI and the controls, systems and procedures applied to manage risks of the business and ensure compliance with regulatory and prudential requirements. The Board will be responsible for approving the risk and control framework and associated policy documents required to comply with St.George’s regulatory obligations as an ADI and, in doing so, will seek to ensure consistency with the corresponding framework and policies adopted by the Westpac Group unless to do so would not be compliant with St.George’s legal obligations or its regulatory or prudential requirements as an ADI.

The Board may rely in good faith on the information provided by its committees and Westpac Board Committees referred to in Section 10 below and on information and advice received from employees of the Bank and its related parties whom the Board believes on reasonable grounds to be reliable and competent or information and advice from external professional advisors or experts whom the Board believes on reasonable grounds to be within the person’s professional or expert competence.

Management

The directors may elect to delegate specific powers and functions. The directors will exercise this power having regard to the recommendation of Westpac’s CEO and the delegation framework approved by the Westpac Board.

Board Committees and Subsidiary Company Boards

The Board has established a standing Board Audit Committee to assist the Board’s decision making, supervision and control.

In addition, the Board has delegated functions to a number of standing Committees established by Westpac to assist the Board, namely:

Risk Management Committee
Nominations Committee
Remuneration Committee
Sustainability Committee; and
Information Technology Committee

At least one (1) St.George director is a member of each Committee to assist in the oversight of the Committees.

Minutes of Committee meetings are tabled at the next succeeding board meeting after the relevant committee meeting for noting and discussion and, where recommendations are made, consideration of such recommendations.

The membership of the Board Audit Committee is determined by the Board from time to time. Prior to such determination, the Chairman will have discussions with individual directors to assess their availability and the contribution they are able to make to the Committees.

Board Meetings

Board meetings are normally held on a quarterly basis. Meetings may also be held at other times. Facilities are available to link individual directors to meetings by telephone or video-link.

Directors’ Remuneration and Expenses

Westpac’s Board Remuneration Committee reviews the level of directors’ remuneration on an annual basis and in this process may have regard to external advice on levels of Board remuneration within like industry sectors.

Directors will be reimbursed all reasonable expenses incurred in carrying out their duties as a director.

If a director wishes to undertake an activity which will lead to the incurring of an unusual expense, the director should consult with the Chairman prior to such expense being incurred.

Access to Board Papers

Recognising the confidentiality of Board papers, the Bank’s Secretariat provides a facility where directors may return their papers for destruction after meetings. It is the Board’s policy, however, that all present and past directors should have continued access to Board papers previously provided to them. The Board considers that it is in the best interests of the Bank and its shareholders that directors and former directors be able to refresh their recollection of matters coming before the Board during the time they served as directors and accordingly supports arrangements being in place with individual directors to allow that this right of access continues for a period of at least seven years, including after a director ceases to hold office.

Availability of Independent Advice by Directors

A director may seek legal advice on any matter before the Board or any other matter affecting the directors’ duties to the Bank from a legal firm of that director’s choosing at the Bank’s expense, provided:

The director submits a written request to the Chairman for such advice setting out the reasons why it is required and also notifies the Board of his or her wish to seek advice.
The Chairman’s consents to such advice being obtained, such consent not being unreasonably withheld.
The director provides the Chairman with a copy of any letter of instructions to the relevant legal firm prior to that letter being issued. Such letter shall set out the issues, any evidence in support of such issues and the questions for consideration.
The legal firm’s advice, together with a copy of the letter of instructions, is provided to the Board

Access to Information and Access to Employees

To enable directors to properly fulfil their duties, they will have access to all relevant information and employees within the Bank. Directors should request the information they require or arrange for access to employees through the Executive Directors.

Indemnity and Directors and Officers’ Insurance

Directors may be indemnified in accordance with the Westpac Group’s ‘Contractual Indemnity Policy’.

Westpac maintains Directors and Officers Insurance which in effect provides cover to the Bank to enable it to meet its obligations to indemnify directors. The relevant policy also provides cover for directors individually. The extent and limit of such insurance cover is dependent upon the insurance market.

Approved by the Board on 3 February 2009