Australia and New Zealand Banking : ANZ 2019 Corporate Governance Statement

2019

CORPORATE GOVERNANCE STATEMENT

Contents

1. Approach to Governance	2
2. Board Areas of Focus in FY19	4
3. The Board	6
4. Performance Evaluations	11
5. Other Information	11
6. Role of Company Secretaries	12
7. Board Committees	12

8. Audit and Financial Govenance	17
9. Ethical and Responsible Decision-making	18
10. Commitment to Shareholders	19
11. Continuous Disclosure	19
12. Economic, Environmental and	19
Social Sustainability Risks
13. Diversity and Inclusion	20

1. Approach to Governance

ANZ's Board, with the support of the Board Committees, is responsible for oversight of ANZ's governance framework. The framework seeks to provide effective and responsible decision making, assisting ANZ in delivering on its strategy and purpose.

This Statement outlines key areas of the framework, which includes:

•• an experienced and independent Board, supported by a Board Committee structure which is regularly reviewed to seek to ensure it continues to operate effectively and add value;

•• clear delineation of the respective roles of Board and management;

•• timely and balanced disclosure, including the corporate governance page of anz.com (anz.com/corporategovernance); and

•• a risk management framework which is regularly reviewed.

• ANZ 2019 CORPORATE GOVERNANCE STATEMENT

Board of Directors

From left to right: Rt Hon Sir John Key, GNZM AC - Independent Non-Executive Director, John Macfarlane - Independent Non-Executive Director, Paula Dwyer - Independent Non-Executive Director, David Gonski, AC - Chairman, Independent Non-Executive Director, Graeme Liebelt - Independent Non-Executive Director, Ilana Atlas - Independent Non-Executive Director, Shayne Elliott - Chief Executive Officer, Executive Director, Jane Halton, AO PSM - Independent Non-Executive Director

Full biography details can be found on our website at anz.com/directors

Board Overview

Board composition

•• ANZ's Board is comprised of seven Non-Executive, independent Directors (including an independent Chair, David Gonski, AC) and one Executive Director - ANZ's Chief Executive Officer (CEO), Shayne Elliott.

•• Currently, three of ANZ's Directors are female and five are male.

•• The names and biographical details of each Director, including their main associations outside ANZ, are available on ANZ's website at anz.com/directors and in the 2019 Annual Report.

Board committees

•• Under ANZ's Constitution, the Board may delegate any of its powers to Committees of the Board. ANZ has six principal Board Committees - the Audit Committee (chaired by Paula Dwyer), the Ethics, Environment, Social and Governance (EESG) Committee (chaired by David Gonski, AC), the Risk Committee (chaired by Graeme Liebelt), the Human Resources Committee (chaired by Ilana Atlas), the Digital Business and Technology Committee (chaired by Jane Halton, AO PSM) and the Nomination and Board Operations (NBO) Committee (chaired by David Gonski, AC). Each Committee has its own Charter setting out its roles and responsibilities.

Corporate Governance Framework

SHAREHOLDERS

BOARD OF DIRECTORS

Audit	Ethics, Environment,	Risk	Human Resources	Digital Business		Nomination and
Committee	Social and Governance	Committee	Committee	and Technology		Board Operations
	Committee			Committee		Committee
	BOARD RESERVED POWERS AND DELEGATION OF AUTHORITY POLICY

CHIEF EXECUTIVE OFFICER

GROUP EXECUTIVE COMMITTEE (ExCo)

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2. Board Areas of Focus in FY19

This year the Board and its Committees have undertaken key strategic, governance and oversight activities, including:

STRATEGY AND PURPOSE-LED TRANSFORMATION

•• Conducting annual Board strategy session, focused on the long-term success of the company and learning lessons frompast experience

•• Regularly discussing ANZ's strategic priorities, including the refinement and implementation of them, with the CEO

•• Regularly discussing the progress of ANZ's transformation of its Australian business and ANZ's approach to it

•• As part of the Board's visit to New Zealand, receiving detailed reports covering the entire NZ business and its direction

•• Continuing its focus on ANZ's corporate culture, including reviewing results and key themes of ANZ's culture assessments and ANZ's staff engagement survey

•• Providing oversight of the design and implementation of ANZ's redesign and simplification of remuneration and reward and Accountability and Consequences Frameworks, including reviewing and providing input into the Australian Prudential Regulation Authority's executive remuneration proposals

•• Discussing future disruptive technologies and potential business impact on, and involvement by, ANZ

CUSTOMER

•• Approving the development of a new customer focusedsection of the Board agenda, including in relation to:

• Customer satisfaction, complaints and remediation
• Regulatory changes impacting customers
• ANZ's approach to marketing and specific marketing initiatives

•• Providing oversight of ANZ's approach to customer remediation and complaints

•• Participating in a detailed review of ANZ's customer service lighthouse initiative, including meeting with participatingfront line staff

•• Reviewing ANZ's approach to communicating customer initiatives to the front line

• ANZ 2019 CORPORATE GOVERNANCE STATEMENT

FINANCIAL

GOVERNANCE AND REGULATORY

•• Reviewing and endorsing ANZ's operating and strategic plans

•• Regularly discussing business momentum matters

•• Regularly discussing merger and acquisitions matters, including in relation to the progress of the transactions regarding the sale of its Wealth business

•• Providing oversight of capital management matters, including in relation to proposals from the Reserve Bank of New Zealand, the Australian Prudential Regulation Authority and current andfuture capital management options for ANZ

•• Reviewing ANZ's governance processes for the preparation of its financial statements

•• Reviewing and approving ANZ's self-assessment of governance, culture and accountability practices and subsequent roadmap of remediation activities

•• Providing oversight of ANZ's response to the final reportof the Royal Commission

•• Participating in deep dives into how ANZ approaches compliance with numerous prudential standards

•• Creating a new NBO Committee, consisting of all Non-Executive Directors, to focus on the Board's own composition and operations

•• Embedding the increased remit of the EESG Committeeto focus on ESG matters

•• Reviewing and implementing improvements to Board Committee reporting practices on technology related matters, including in relation to technology stability and simplicity, cloud and data governance and information and cyber security.

In addition to the regular meetings of the Board held in Melbourne and Sydney, the Board also met in Wagga Wagga, Perth and Auckland and went to Hobart, with each trip including customer, staff and other stakeholder functions, with a distinct focus on engagement matters.

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