Corporate Governance

The Governing Board of Chartered Savings Loan and Trust Limited (CSLT) is responsible for the corporate governance of CSLT and its controlled entities.

This statement generally describes the practices and processes CSLT has adopted, to ensure sound management of CSLT within the legal framework

under which it operates. The key principles are accountability, disclosure and independence. CSLT will be  supervised by The Ministry of Business,

Innovation and Employment (MBIE) who play a central role in shaping and delivering a strong New Zealand Economy.

Role of the Governing Board

The Governing Board‘s primary role is to protect and enhance long-term member value. To fulfil this role, the Governing Board is responsible

for providing strategic guidance to CSLT and its related bodies corporate (the “CSLT Group”); monitoring and providing effective oversight

of CSLT management; overseeing CSLT’s risk management systems; and acting as an interface between CSLT and its members. The G-Board

has delegated responsibility for the operation and administration of CSLT to the Chairman and executive management team.

The role and responsibility of the CSLT Governing Board is set out in detail in CSLT’s Board Charter.

Governing Board processes

The G-Board holds regular scheduled meetings each year (2 to 3), as well as strategic planning meetings and any other meetings that may be 

required from time to time. To assist in the execution of its responsibilities, the G-Board has established a number of key committees, 

each with its own charter that are reviewed annually. Details of the various G-Board committees are outlined below.

Composition of the Governing Board

The constitution of CSLT specifies that the number of directors shall be between four and six and that their term of office is normally thirty years.

Currently the G-Board comprises three High Profile Individuals. The G-Board comprises of three independent non-executive directors.

In determining whether a director is independent, the Board has regard to New Zealand International Financial Reporting Standards

(NZIFRS) (Governance). The G-Board does not consider that the length of service on the Board has impacted any individual 

director’s ability to act independently and in the best interest of members.

Conflict of interest

In accordance with the Corporations Act and CSLT's constitution, directors must keep the G-Board advised of any interest that could

potentially conflict with the interests of CSLT. The G-Board has developed guidelines to assist the directors in disclosing potential

conflicts of interest. Directors’ disclosures are formally updated annually as part of CSLT’s Fit and Proper process. Transactions

between non-executive directors and CSLT are subject to the same terms and conditions that apply to members.

G-Board performance assessment

The G-Board is committed to continual improvement and has in place an annual evaluation process

for assessing the G-Board and individual directors.

Independent professional advice and access to banking information

Each director has the right of access to all relevant CSLT information and to CSLT’s management. Where there is a legal issue that may

affect a director’s ability to exercise his or her duty as a director and/or a potential or actual conflict of interest, subject to prior

consultation with and approval of the Chairman, a director may seek independent professional advice from a suitably

qualified adviser in the field, at the expense of CSLT.

Member participation

Each member has two relationships with CSLT: as a customer and as an owner or shareholder. As customers, members exercise choice

by selecting the products and services they believe best suit their individual needs. As owners and shareholders, members have

the right and are encouraged to participate in some of the activities of their bank, including nominating and electing

other members as directors, and attending or participating at general meetings, either in person or by proxy.

Ethics

To maintain member confidence in the integrity of CSLT directors have adopted and adhere to a directors’ code of conduct, which is

based on the code developed by the Institute of Directors in New Zealand Inc (IOD). CSLT is committed to the principles of

mutuality and is driven by its vision and values. The principles established here guide CSLT’s behaviour and interaction

with customers, other banks, credit unions, staff and the broader community. CSLT is also committed to the privacy

of member information. CSLT has in place a whistle blower protection program to facilitate and encourage

confidential reporting of unacceptable or undesirable conduct.

Risk management

CSLT manages a diverse range of significant risks. To this end, the G-Board of CSLT and its subsidiaries are committed to identifying and 

managing these risks throughout the CSLT group. The G-Board, through the Chairman, has established a risk management system for

assessing, monitoring and managing these risks. The G-Board Risk Committee receives and reviews regular risk management reports.

Remuneration policies for directors

In determining director remuneration, the G-Board obtains independent advice on the appropriateness of remuneration given trends in

comparable companies. Remuneration levels are designed to attract and retain appropriately qualified and experienced non-executive

directors. Non-executive directors do not receive any performance-related remuneration. Directors’ remuneration covers all CSLT

G-Board activities, membership of committees and subsidiary companies and includes any superannuation contributions paid

on behalf of a director.Subject to meeting specific criteria, individuals retiring from the G-Board may receive a termination

payment of up to three years directors’fees. Non-executive directors may maintain loans and credit facilities from CSLT

at normal member rates of interest and therefore no additional remuneration is obtained by way of a benefit.

G-Board committees

To assist in the execution of its responsibilities, the G-Board has established a number of committees, each with its own

charter that is reviewed annually. Details of the Committees currently in place are outlined below.

Board Remuneration Committee

This committee assists the G-Board by reviewing the significant remuneration related policies and practices of CSLT. It has been established to ensure 

compliance with New Zealand International Financial Reporting Standards (NZIFRS). The key responsibilities of the committee include:

•       Conducting regular reviews of, and making recommendations to, the Board on the remuneration policy, including an assessment of

compliance with the requirements of (NZIFRS)

•       Making annual recommendations to the Board on the remuneration of the President/Founder/Director

•       Considering and approving recommendations in relation to remuneration for direct reports of the President/Founder/Director and other persons whose activities

may, in the committee’s opinion, affect the financial soundness of the institution, and any other person specified by NZFMA

•       Considering and approving recommendations to the Board regarding remuneration of other categories of persons covered by the

remuneration policy

•       Having free and unfettered access to risk and financial control personnel and other parties (internal and external) in carrying out

its duties 

•       Having the power to engage third-party experts, if it chooses to do so, in a manner that ensures their engagement, including any

advice received, is independent

•       Considering and approving people-related strategies aimed at moving CSLT towards being recognised as an equal-opportunity employer and

an employer of choice

•       Reviewing targets set and schemes designed to drive performance of CSLT employees

•       Reviewing the financial performance of the Company against the Variable Short and Long term Incentive scheme targets set by the Committee;

•       Reviewing of major policies, guidelines and relevant initiatives associated with the management and development of Company employees;

•       Reviewing of major structural changes of the Company affecting Company employees;

•       Endorsing enterprise agreements or similar documents relating to remuneration and conditions of employment.

•       Facilitating the appointment of the President/Founder/Director;

•       Approving appointments to the Executive Management Team as recommended by the Chairman.

The committee is required to have at least two members and all members of the committee must be non-executive directors. A majority of members

must be independent. The committee meets as and when required.

G-Board Audit Committee

The G-Board Audit Committee is established by the Board of Directors of CSLT to assist the G-Board in:

•       reviewing the effectiveness of the CSLT Group financial reporting and professional accounting requirements and approving CSLT’s annual

financial statements;

•       overseeing the internal and external audit function; and

•       monitoring compliance with statutory reporting, other legislative requirements (including NZFMA & MED) and internal company policy.

The committee is required to have at least three members and all members of the committee must be non-executive directors. A majority of

members must be independent. The Chair of the CSLT G-Board may not be the Chair of the CSLT.

G-Board Risk Committee

The G-Board Risk Committee is established by the Governing Board of CSLT to assist the G-Board in:

•       overseeing and monitoring the management and alignment of risks of CSLT;

•       ensuring that CSLT meets prudential and statutory requirements in relation to risk;

•       ensuring that CSLT has in place a risk management framework and management practices which limit the company’s risks to prudent

levels; and

•       providing an objective view on the effectiveness of, and assurance over, the internal control environment (including the risk

management framework and financial and statutory reporting controls) of CSLT.

The committee is required to have at least three members and all members of the committee must be non-executive directors.

A majority of members must be independent.

Board Strategy Consultative Committee

This committee assists the G-Board and supports management in progressing major strategic issues and opportunities as required between Board

meetings.

The duties and responsibilities of the committee include:

•       Providing support and advice to CSLT management in progressing strategic objectives and initiatives that:

•       Are consistent with the CSLT Business Plan as approved or varied by the G-Board; or

•       May need to be considered for commercial and strategic enhancement of CSLT.

•       Assessing and making recommendations to the CSLT G-Board, as necessary, regarding any strategic issue and in respect of any major

proposals from third parties relating to the operations of and/or future ownership of CSLT.

•       Approving the appointment of and scope of work undertaken by specialised advisors or experts as required by the committee in support

of strategic engagements.

•       Ensuring appropriate advice is made available to all directors of the CSLT G-Board in respect of strategic matters including,

where appropriate, from external advisors, always subject to managing conflicts of interest and any regulatory and legal constraints.

The committee is required to have at least three members, with the majority of members being independent non-executive directors.

One of these directors is required to chair the committee. The President/Founder/Director is also required to be a member of the committee.

Controlled entities

The activities of the subsidiaries in the CSLT group are overseen by their own Governing Board, principally drawn from the CSLT

Board and CSLT executive management. These entities operate within the Group’s Corporate Governance Framework.