Annual Review 2015/16

As a top 20 ASX-listed company, Suncorp upholds the industry’s most robust governance and risk management processes. These are essential to maintaining integrity and confidence in the company as a leading financial services provider.

Suncorp is proud of its track record and believes effective corporate governance is critical to creating ongoing value for all of its stakeholders.

Governance and Risk Management Approach

Suncorp Group complies with the Corporations Act 2001, the Australian Securities Exchange Listing Rules, and the governance requirements prescribed by the Australian Prudential Regulation Authority under Prudential Standard CPS 510 Governance. Throughout the reporting period, the governance arrangements were consistent with the third edition of the ASX Corporate Governance Council’s (ASXCGC) Corporate Governance Principles and Recommendations.

The Board Charter stipulates a majority of the Board must be independent, non-executive directors. The Board regularly reviews the independence of each non-executive director and, in June 2016, completed an independence assessment in accordance with the ASXCGC Principles and Recommendations. The Board considers all its current directors to be independent, with the exception of Michael Cameron who is the Chief Executive Officer & Managing Director.

The Board held 11 meetings in 2015/16 and two strategic planning sessions. Details of directors’ attendance at those meetings are disclosed in the 2015/16 Directors’ Report and Financial Statements, available at suncorpgroup.com.au/investors/reports.

The Board and the CEO & Managing Director are supported by the Senior Executives (who report to the CEO & Managing Director). The Senior Executives are listed above. The biographies of the CEO & Managing Director and the Senior Executives are available on the Suncorp Group website suncorpgroup.com.au/about-us.

Managing risk is a key contributor to Suncorp’s success. The Board and management recognise that an effective system of risk management plays a critical role in the setting and achievement of Group objectives. Suncorp has systems, structures, policies, processes and people in place to identify, measure, evaluate, monitor, report and control, or mitigate all internal and external sources of material risk. The Risk function plays an important role in challenging and overseeing the risks taken across Suncorp.

The Code of Conduct outlines the desired culture and standards of behaviour expected of the Board, executives, leaders and employees.

Building and maintaining a customer-centric workforce is essential to the successful implementation of Suncorp’s new customer-aligned operating model and delivery of the refreshed strategy – a workforce that aspires to deliver excellent customer and business value through innovation. In addition, infrastructure, policies and procedures must continue to promote an environment which delivers outcomes and creates sustainable value for customers and shareholders.

Engagement with customers extends to joint venture partners and other industry groups that represent Suncorp customers and have an interest in the quality and development of Suncorp products and services. Suncorp’s strategy of elevating the customer requires alignment across the total workforce, including our strategic partners. As the elevation of the customer evolves, strategic partnering decisions will continue to take into account the impact of the customer experience and the ability to deliver value to the customer.

The Group’s main business activities are also subject to a number of industry codes such as the General Insurance Code of Practice and the Banking Code of Conduct. A number of additional internal policies are in place as part of a compliance framework to monitor and encourage adherence with the Code of Conduct and industry codes. The key related policies are the:

  • Conflicts of Interest Policy
  • Whistleblower Policy
  • Securities Trading Policy

The Company monitors compliance with the Code of Conduct and its various other policies using an internal due diligence system. The Code is available at suncorpgroup.com.au/about-us/governance.

Information Technology

Suncorp relies on its information technology platforms to support business activities and provide reliable, secure and innovative technology solutions that meet regulatory standards, yet are agile enough to adapt to changing business requirements and provide efficient connectivity for customers.

The Group’s Technology, Data & Labs function (TDL) leads the business intelligence and technology strategy and includes all data and analytics, digital enablement, cloud and infrastructure and security services. The establishment of the dedicated TDL function recognises that digital, innovation and business agility are central to driving growth and competing in an environment where technology is increasingly being used as a key point of differentiation.

Suncorp seeks to manage its operational risks by putting in place clear procedures and automating activities, and by following its enterprise risk management framework and policies. The Group is subject to operational risks and losses resulting from inadequate or failed internal processes, people and systems, or from external events. The nature of Suncorp’s business exposes it to cyber security risks. Suncorp seeks to reduce such risks by investing in its people and underlying infrastructure, maintaining an understanding of trends in technology and cyber security, and entering into strategic relationships with specialist technology providers. The infrastructure and operations are subject to regulatory oversight and reporting, and Suncorp has backup recovery infrastructure and processes to reduce the impact from disruptions.

Government Engagement

As a major employer, economic contributor and leading voice in the financial sector, Suncorp works constructively with a wide range of government stakeholders to help deliver outcomes which are in the best interests of Suncorp’s customers, shareholders and the broader community.

Suncorp takes an active role in the democratic process and maintains a productive working relationship with government at all levels. The company supports an evidence-based approach to policy development and works to ensure that policy changes pursued by government have a sound basis. Maintaining open and respectful channels of communication between Suncorp and government decision-makers fosters the development of policies which deliver positive community outcomes.

In recent years, Suncorp has contributed to policy development in a number of important areas, including the promotion of mitigation to strengthen homes in northern Australia to protect families and improve insurance affordability; improving the regulation of the financial sector through the Financial System Inquiry to help deliver a more competitive banking sector; and working to reform statutory insurance schemes to deliver better outcomes for people involved in workplace and motor vehicle accidents.

Political Donations

Suncorp is not aligned with any political party, and the business is run in a politically neutral manner. Suncorp’s five guiding principles with respect to donations and benefits made to political parties are that Suncorp will:

  1. be transparent and honest
  2. not make direct cash donations
  3. strive to deliver shared value for Suncorp’s shareholders, customers and communities
  4. maintain a bipartisan approach
  5. only attend political events for public policy reasons.

Directors and executives may attend general functions run on behalf of political parties and if Suncorp meets the costs of this attendance, or makes any similar financial contribution, the amounts are recorded and included in publicly available registers of political donations.

In 2015/16 Suncorp’s financial contributions to political parties included $33,930 to the Liberal National Party and $34,300 to the Labor Party. These amounts are disclosed to and published by the Australian Electoral Commission.

Suncorp’s position statement on political donations is available at suncorpgroup.com.au/about-us/governance.

"Suncorp Bank has a long history of being there for our customers and we intend to continue doing so. We place significant emphasis on our positive risk culture which flows through our practices, processes and training.”

CEO Banking & Wealth
John Nesbitt, April 2016

Responsible Approach to Banking

Suncorp Bank is focused on personal, small to medium enterprise and agribusiness customers. Large corporations or commercial projects are not within the Bank’s risk appetite or target markets.

The Bank has clear lending policies and guidelines to limit its reputational risk and exposure to environmentally-sensitive industries or customers.

Personal lending customers are assessed against capacity to repay criteria and Suncorp takes significant care to ensure repayment obligations are within customers’ financial capacity. The Bank also provides support for customers experiencing financial difficulty, including providing information about financial counselling services.

In 2015/16 Suncorp Bank publicly supported the Australian Bankers’ Association’s six point plan for the banking sector to improve standards and transparency. The comprehensive new measures are designed to protect consumer interests, and include a review of commissions and sales incentives, treatment of customers, protection of industry whistleblowers, handling of customer complaints and dealing with poor conduct.