Our commitment to acting and lending responsibly
Banks are vital to society as they are financial intermediaries of the economy. This role is heavily reliant on trust – particularly between customers and their banks. Lending responsibly and ensuring the security of data are areas that are particularly critical for a healthy economy. Because of this, sound conduct is critical. Improving conduct is an essential part of building trust and supporting future sustainable growth. We have continued to focus our efforts on building trust by doing the right thing by our customers, people and the broader community.
Sound conduct relies on integrity, which is one of the four BOQ values: we show we care, we achieve together, we act with integrity, and we make a difference. At BOQ, we define integrity as doing what is right and doing what we say we will do. We recognise that delivering on our purpose, to deliver more human, empathetic experiences that help customers and communities prosper, requires a commitment to upholding this value daily. Only then can we truly deliver upon our goal to create long-term value for our customers, people, shareholders and our wider community. The important role that culture plays in setting up a business for success is explored in detail under the ‘Workplace culture’ theme on our website.
BOQ is committed to improving conduct within the industry, as it is an essential part of building trust within society and supporting future sustainable growth. One important way we drive this commitment is through sound corporate governance.
The ASX Corporate Governance Council defines it as ‘the framework of rules, relationships, systems and processes within and by which authority is exercised and controlled by corporations’. This definition encompasses the mechanisms by which companies, and those in control, are held to account. Ethics, risk management and compliance are also elements of corporate governance. Ultimately, corporate governance dictates the shared philosophy, practices and culture of an organisation.
If corporate governance is compromised, companies risk a breakdown in philosophy, corner-cutting, soliciting of inappropriate products, and complacent management. In an effort to minimise potential risk in relation to the above issues occurring at BOQ, we focused on the following initiatives in FY19.
A new Banking Code of Practice standard was rolled out across BOQ in 2019 with the aim to promote greater transparency for our customers and to ensure that customer needs always come first. BOQ has developed targeted training to assist our people in supporting customers as they go through periods of vulnerability and financial difficulty.
New dashboard metrics around risk appetite were established, focusing on risks that may impact reputation and/or cultural integrity. Additions include a ‘Risk Culture Index’, which monitors the risk of losses due to the behaviour of individuals or groups that fail to identify, understand, openly discuss and act on current and future risks. Another measure was the ‘Voice of the Customer Matrix’, which monitors customer outcomes.
We encouraged employees to participate in the Banking and Finance Oath, an industry-led initiative facilitated by The Ethics Centre to build trust and confidence in the finance industry. We also leveraged the ongoing effectiveness of our Ethics Committee, which is comprised of representatives from People and Culture, Legal, Risk, Retail and the Customer Advocate. The Ethics Committee examines issues relating to inappropriate conduct and applies an even-handed consistent approach to enforcing outcomes. At this forum, significant customer enquiries and complaints are discussed as well as strategies impacting vulnerable customers, collection activity for minors and domestic and family violence customer assistance programs.
These initiatives are combined with an ongoing effort of maintaining transparency with all stakeholders and fostering a culture where our people feel comfortable to call out any behaviours that do not meet the standards we expect.
BOQ’s Whistleblower Program, informed by legislative and regulatory requirements, endeavours to maintain a culture that enables and supports speaking up. In addition to BOQ’s cultural objectives, BOQ’s Whistleblower Program has been drafted having regard to three sources of obligation and recommendation: the Corporations Act (as amended by the Treasury Laws Amendment (Enhancing Whistleblower Protections) Act); the 4th edition of the ASX Corporate Governance Principles and Recommendations; and the Australian Banking Association’s (ABA) Guiding Principles – Improving Protections for Whistleblowers.
The legislation commenced on 1 July 2019, and requires a compliant policy to be in place by 1 January 2020. Given the cultural importance of the reforms, BOQ adopted its revised policy almost 6 months earlier than required (in July 2019).
BOQ believes it is a matter of good corporate governance to have a Whistleblower Policy and is committed to protecting whistleblowers. A transparent policy benefits both BOQ’s employees and BOQ’s stakeholders. BOQ’s Whistleblower Policy identifies:
- protections available to whistleblowers;
- how and to whom disclosures that qualify for protection may be made;
- how BOQ will support whistleblowers and protect them from detriment;
- how BOQ will investigate disclosures that qualify for protection;
- how BOQ will ensure fair treatment of employees mentioned in disclosures or to whom such disclosures relate; and
- how the policy is to be made available to officers and employees.
Banking Code of Practice
The new Banking Code of Practice provides additional safeguards and protections not set out in the law, and, in some areas, sets higher standards than the law.
BOQ has reviewed, developed and implemented a revised suite of terms and conditions for its consumer and small business customers, effective from 1 July 2019. The revised terms and conditions comply with the new Banking Code of Practice and will ensure that BOQ’s banking services continue to meet community expectations and standards.
Banking Executive Accountability Regime
The Banking Executive Accountability Regime (BEAR), which took effect from 1 July 2019, established heightened standards of accountability among authorised deposit-taking institutions (ADI) and their most senior executives and directors. BEAR seeks to ensure there are clear consequences in the event of a material failure by an ADI to meet those expectations.
BOQ has recognised BEAR as an opportunity to genuinely strengthen accountability and drive improvement in the way BOQ governs itself.
The BEAR has been embedded within BOQ’s internal accountability framework and accountability statements have been adopted by each of the accountable persons within BOQ. Through this process BOQ has reviewed its end to end business processes and identified gaps, areas of overlap or points of handover that required clarification.
On 28 June 2018, the Government introduced the Modern Slavery Bill 2018. This Bill requires certain organisations based in, or operating in Australia, which have an annual consolidated revenue of more than $100m (defined as ‘reporting entities’), to annually report on the risks of modern slavery in their operations and supply chains, and to address those risks. The annual statements will need to address mandatory criteria set out in the Bill, including the entity’s key modern slavery risks and describing their actions to address those risks. These criteria will provide certainty for business about how to report and ensure statements can be easily compared.
The Modern Slavery Act was passed by Parliament on 29 November 2018 and the reporting requirement entered into force on 1 January 2019. Find BOQ's 2020 Modern Slavery Act Statement here.