Corporate Governance

The Group's internal management is governed by the Company's constitution (PDF, 237KB).

All NAB directors are expected to bring independent and unfettered judgement to Board deliberations. To qualify as ‘independent’, a director must be independent of management and free of any business or other association that could materially interfere with the director’s exercise of unfettered and independent judgement with respect to issues before the Board, and to act in the best interests of NAB and its shareholders.

In considering the independence of each director, the Board takes into account the factors outlined in the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (3^rd edition).

The Board conducts regular (at least annual) reviews of the independence of each of the directors. Directors are expected to volunteer information as and when changes occur, and each non-executive director is required to make an annual disclosure to the Board of all relevant information.

To further assist in ensuring that the Board operates independently of management, non-executive directors meet in the absence of management at each scheduled Board and Committee meeting.

All non-executive directors of the Board are considered to be independent, as identified in the Report of the Directors in our 2018 Annual Financial Report.

For more information on the Independence Standards (part of the Board Charter) that are considered when assessing Director independence, see the Independent Director Standards (PDF, 632KB).

To assist in carrying out its responsibilities, the Board has established standing Board committees that cover each of Audit, Remuneration, Risk, Customer and Nomination and Governance matters. Other committees are created, with specific remits, as and when required.

Board committees and their respective charters (which include information on the responsibilities of each committee) are set out below. Information related to the operational procedures of board committees (including information on composition, reporting requirements, effectiveness evaluations and the role of Committee Chairs) is included in the Board Committee Operating Rules, which can be accessed below.

• Board Committee Operating Rules (PDF, 517KB)
• Board Risk & Compliance Committee Charter (PDF, 383KB)
• Board Audit Committee Charter (PDF, 520KB)
• Board People & Remuneration Committee Charter (PDF, 576KB)
• Board Nomination & Governance Committee Charter (PDF, 384KB)
  
• Board Customer Committee Charter (PDF, 399KB)

• Code of Conduct
• Code of conduct- NZ (PDF, 609KB)
• Group Securities Trading Policy (PDF, 227KB)

We aim to be open and transparent with all stakeholders and we are committed to disseminating information to stakeholders in a fair, timely, clear and objective manner.

The Group has adopted a disclosure policy that is designed to:

• ensure we comply with our legal and regulatory obligations; and
• promote investor confidence by ensuring that trade in our securities takes place in an informed market.

We will immediately notify the market on becoming aware of any information related to our businesses which a reasonable person would expect to have a material effect on the price or value of our securities. We do this by announcing such information to the relevant stock exchanges on which our securities are listed.

In certain limited circumstances, the applicable listing rules permit the Group not to disclose such market sensitive information. Our policy also provides that, in general, the Group will not respond to market speculation or rumours unless required to do so by law or the Australian Securities Exchange (ASX).

Where appropriate, we may request a trading halt from the ASX to prevent trading in the Group's securities by an inefficient and uninformed market.

The Group Executive, Legal & Commercial Services is responsible for all communications with the relevant stock exchanges on which the securities of the Group are listed. All releases to the ASX and other relevant stock exchanges are made available on our website.

For more information see the Group Disclosure & External Communication Policy (PDF, 184KB).

The Group aims to be open and transparent with all our stakeholders, including our shareholders, and to make all communications easy to access and in plain English.

Information is communicated to shareholders regularly through a range of forums, publications and online. These include:

• the Annual General Meeting
• notices and explanatory memoranda of Annual General Meetings
• the Annual Financial Report (for those shareholders who have requested a copy)
• the Annual Review (for those shareholders who have requested a copy)
• regular trading updates and market/investor briefings
• letters from the Chairman to inform shareholders of key matters of interest
• the Group's website, providing access to announcements, media releases, financial reports, previous years' financial results and investor presentations.

The Notice of Annual General Meeting (AGM) provides details of the location, time and date of the AGM, the business to be considered by shareholders and details about each candidate standing for election or re-election as a Director. For those shareholders unable to attend the AGM, a webcast is available on our AGM page. Our external auditors attend this meeting and are available to answer shareholder questions about the conduct of the audit and preparation and content of the auditor's report.

Our AGM page also includes responses to questions taken on notice at the AGM.

Inclusion is a mindset and a way of working together that supports a positive experience for our colleagues, and in turn, our customers. At NAB, we know that when we create diverse and inclusive teams that we can innovate for the future, better manage risk and solve some of our biggest challenges. That’s why we are creating a more inclusive culture built on trust and respect – where all of our colleagues feel a sense of belonging and empowerment, no matter their background or experience.

GROUP INCLUSION AND DIVERSITY POLICY

In September 2021, the Board approved an updated Group Inclusion & Diversity Policy (PDF, 1.9MB). The Policy includes a requirement for the Board People and Remuneration Committee to monitor and assess on an annual basis the effectiveness of the Inclusion & Diversity (I&D) Policy, Strategic Framework and practices in achieving the stated, measurable objectives.

NEW I&D STRATEGY FRAMEWORK

In mid-2021, NAB engaged PwC to provide an independent assessment on eight dimensions noted as industry barriers to inclusion, as part of the I&D Strategic Review. We also consulted colleagues across the business, including two reference groups and leadership teams to develop a new Inclusion & Diversity Strategy Framework (the Framework). This was finalised and endorsed by the Board in early October 2021. The new three-year Framework is explicitly aligned to our business and colleague strategies and looks to shape the way we think and How We Work. To facilitate sustainable and meaningful change, our new Framework recognises the need to focus on inclusion, not only diversity in our key colleague processes and policies. The key focus areas of the new Framework include:

• Inclusive leadership – Leaders are visible in their commitment to inclusion and actively build diversity in teams. They role model NAB’s How We Work in their everyday actions and ensure that systems are inclusive and accessible to all.
• Inclusive workplace – A culture that actively promotes and leverages team diversity, flexibility and wellbeing – an environment where all colleagues feel empowered to contribute to their full potential.
• Customer inclusion – Colleagues who take pride in understanding the needs of our customers, ensuring that they can access the information, services and products they need with ease.

The measurable objectives aligned to the new I&D Strategic Framework are as follows:

• Diverse leadership teams and talent pipelines by 2025:

- At each salary level 40-60% of either gender represented.

- NAB Board (non-executive directors) 40-60% of either gender represented.

- NAB Group subsidiary boards – 40-60% of either gender represented.

• Fair remuneration – seek to reward people fairly and support our objective of gender pay equity < 10% by 2025.
• Inclusion score – Targeting no gap between diverse and non-diverse colleagues by 2025 using measures from the engagement survey.

NAB’s Executive Leadership Team continues to have direct accountability for the Framework’s execution. The Board receives annual updates on the performance against the Framework and its measurable objectives.

The table on the below outlines NAB’s progress against the measurable objectives communicated in NAB’s 2020 Reporting Suite and the 2020 Group Inclusion & Diversity Policy. These objectives support the colleague-related goals set out in our Accessibility Action Plan 2021-2022 and Reconciliation Action Plan 2019-2021 (PDF, 4.8MB).

Progress against NAB’s 2021 I&D Measurable Objectives

¹ Representation by Salary Group shows percentage female population and has been calculated using population of permanent full-time and part-time employees. In prior years, NAB has grouped Salary Groups together to indicate organisational level. i.e. Salary Group 1-3 are ‘non-manager’ roles and Salary Group 6-7 are ‘executive management’. To provide greater transparency, the representation for these groups is now provided by Salary Group. For historical breakdown and further information on gender representation by employment level, please refer to the 2021 Sustainability Data Pack.

² At an organisational level, the 2019-20 Workplace Gender Equality Agency’s (WGEA) analysis indicates that when comparing the base salary of all women to men within the Australian-based workforce of NAB, our gender pay gap was 18.1%.

³ At an organisational level, the 2020-21 Workplace Gender Equality Agency’s (WGEA) analysis indicates that when comparing the base salary of all women to men within the Australian-based workforce of NAB, our gender pay gap is 16.6%.

⁴ The ‘Inclusive workforce culture’ objective is measured using colleague engagement data, analysing responses to the question ‘How happy are you working at NAB?’ for different diverse groups. The table above shows the percentage of favourable responses for specific diverse groups, with comparisons to the related majority group in the workforce. While the focus of this measurable objective has remained consistent, the target for 2022-2025 has been re-based, with the Board’s approval. The target for 2021, set in 2020, referred to Engagement Score Top 20%. During 2021, NAB engaged specialist consultancy firm Karian & Box to undertake a deeper analysis of NAB’s colleague engagement survey data and report on broader cultural and inclusion and diversity insights. Following this work, the measurement methodology used by NAB has changed, and the inclusive workforce culture results are not directly comparable to an external global engagement benchmark. For 2022-2025, the target is no gap between diverse and non-diverse employees by 2025 using measures from the engagement survey.

⁵ Response calculated using the gender identity demographic question in the July colleague engagement survey.

⁶ Colleagues who selected any other option than Australian, New Zealand, Anglo European, or Other European in either of the two cultural background questions have been grouped as ethnic minority. Groups defined as per the Karian and Box Report.

⁷ Lesbian, gay, bisexual, transgender / gender diverse, intersex and queer. Acronym as per the Karian and Box Report.

⁸ ‘Carers’ includes colleagues who identified they were caring for: Their own child who does not have disability, Their own child with disability, Someone else’s child who does not have Disability, Someone else’s child with disability, An adult (e.g. spouse, partner, sibling) with disability, An older adult (e.g. parent) with disability or An adult or older adult without disability.

INCLUSIVE LEADERSHIP

Leaders are visible in their commitment to inclusion and actively build diversity in teams. They need to role model How We Work and strive to ensure that our systems are inclusive and accessible to all. In 2021, the following key initiatives have taken place to support inclusive leadership:

• Building diverse leadership teams and talent pipelines through organisational leadership reviews.
• I&D KPIs set for all leaders at NAB, from our Executive Leadership Team through to our People Leaders, included in their annual performance plans, meaning that progressing an inclusive culture directly impacts their performance pay.
• People leader webinars, I&D Digest newsletter and simple tools offered to promote inclusive behaviours and actions via daily application on a number of themes including:
  • Hybrid working
  • Supporting the wellbeing of colleagues through COVID-19
  • Supporting home schooling
  • Virtual health and wellbeing classes
  • Supporting teams in managing workloads and working hours
  • Creating an environment safe from sexual harassment
  • How to set the right tone and eliminate everyday sexism
  • Procedural fairness and management of conduct matters
  • Leading mentally fit teams remotely.

Distinctive Leadership program

NAB has introduced one leadership program for every leader across the Group. We now have a consistent approach to how leaders will lead, manage and coach their people every day. We know how important leaders are in creating engaging and inclusive workplaces, holding each other to the highest standards, ensuring we make the right decisions and empowering colleagues to get on with the job. Colleagues who completed the workshop to 30 Sept 2021 comprised of 51% male and 48% female (1% not specified).

Strengthening leadership development for Aboriginal and Torres Strait Islander colleagues

NAB is invested in strengthening pathways to leadership roles for colleagues who identify as Aboriginal and Torres Strait Islander. This year NAB created a dedicated Aboriginal and Torres Strait Islander cohort for our Distinctive Leadership program. Through expanding the offering to emerging Aboriginal and Torres Strait Islander leaders, we provide opportunities for participants to connect with internal and external senior Indigenous leaders.

INCLUSIVE WORKPLACE

We actively promote and embrace team diversity, flexibility and wellbeing to help create a workplace where all colleagues feel empowered to contribute to their full potential. In 2021, the following key initiatives have taken place to continue to build an inclusive workplace:

Progressing gender equality

Gender equality continues to be a priority for NAB. In 2021, we saw an increase in female representation in our Management (Salary Group 4), Senior Management (Salary Group 5) and Group Subsidiary Boards level. Female representation at our most senior levels of the organisation, Executive Management (Salary Groups 6 and 7) and NAB Board decreased. So whilst we have made some progress in senior representation and continue to close the gender pay gap, we acknowledge that there is still work to do to reach our 2025 targets. We recognise the need to continually challenge ourselves to ensure we are prioritising equality, not just for gender, but across all diverse demographics.

In accordance with the requirements of the Workplace Gender Equality Act 2012 (Act), on 26 May 2022, NAB lodged its annual public report with the Workplace Gender Equality Agency (Agency). You can find more information in the following reports:

Questionnaire (PDF, 107KB)
Workplace Profile (PDF, 215 KB)
Workforce Management Statistics (PDF, 316 KB)

We’ve also met the minimum standards in relation to specified gender equality indicators, as set out in the Workplace Gender Equality (Minimum Standards) Instrument 2014.

If you need these documents in an alternative format, just email diversity.&.inclusion@nab.com.au – we’re happy to help.

We continue to drive gender equality at NAB, and although we still have work to do, we have received external recognition for our efforts:

• Ranked #14th Globally, and 2nd in the Financial sector in Equileap’s Gender Equality Global Reporting and Ranking 2021 Edition.
• Inclusion in the 2021 Bloomberg Gender-Equality Index.

Gender pay gap

NAB’s 2020-21 base salary pay gap, as calculated by WGEA, is 16.6%. This is down from 18.1% from the 2019-20 reporting period. While the figure continues to reduce year-on-year we acknowledge that there is still more to do to achieve our 2025 target of <10%.

To do this, we are focusing on addressing the difference in the representation of men and women in senior roles, as this is the largest contributing factor to the gender pay gap as calculated by WGEA. We have set measurable public commitments to make progress on gender representation, with senior leaders being held to account for these as part of their annual KPIs. We ensure that an annual pay gap review takes place and that these results are reported to NAB Board.

In 2017, the UK Government introduced mandatory gender pay equity reporting for all UK-based organisations with more than 250 employees. The full version of the NAB UK Gender Pay Gap Reports are available to view, and the information and analysis included only pertains to the London branch.

Addressing sexual harassment

In 2020 NAB engaged KPMG to undertake an independent assessment on our approach to preventing and responding to sexual harassment at work. The areas of improvement included an action plan setting out work against four areas:

• Increase transparency and reinforce accountability.
• Raise awareness and build confidence to act.
• Develop your people leaders and people advisors into active allies.
• Integrate best practice into existing policies and processes.

Key improvements have delivered more frequent and targeted communications with colleagues about our zero-tolerance expectation for sexual harassment and helping leaders to understand how they can address concerns about sexual harassment. Furthermore, we have set a zero-tolerance tone to sexual harassment and continue to support this through the commencement of a quarterly sexual harassment forum with cross-functional enterprise representation, all focused on strategic and preventative action.

More information can be found in NAB’s Discrimination and Harassment guidelines (PDF, 278 KB).

Improving our workplace policies

In April, we amended our Religious Leave Policy enabling colleagues to apply for up to three working days of paid cultural and religious leave to celebrate important events and traditions without the need to provide ‘reasonable evidence’. This is a significant change which reinforces respect and trust, in all our colleagues, irrespective of faiths.

Improving accessibility for our colleagues

In May we launched our Accessibility Action Plan 2020-2021 ‘Better Together’, our roadmap for the next two years, building on our previous plans. ‘Better Together’ is our action plan aimed to make sure our premises, goods and services and employment opportunities are more accessible to people with disability. Six goals have been identified where accessibility will be embedded:

• Communication and feedback channels.
• How we use data and insights to inform what we do.
• NAB’s Ready Together program to support Australians before, during and after natural disasters.
• Within our procurement processes; product and service designing.
• Within our employment lifecycle processes.
• Our culture and ways of working supporting inclusion.

More information can be found in our Accessibility Action Plan 2021-2022.

To further our commitment to growing our diverse talent, we piloted the Stepping Into Program – an internship program with Australian Network on Disability aimed at connecting skilled and talented university students with disability to NAB.

Flexibility and supporting colleagues who are carers

In 2021, we continued to offer up to 10 days of paid pandemic leave for all colleagues to enable our colleagues to juggle their work and family life during COVID-19. We offer further flexibility and wellbeing support, including access for colleagues and their families to Care Corporate – NAB’s carers support program and MyCoach – NAB’s Employee Assistance Program.

We continue to offer 12 weeks of paid primary care leave, regardless of gender, and up to 40 weeks of unpaid primary carer’s leave that accumulates superannuation and accrues long service leave. We encourage non-birth parents to take parental leave. This year we saw a decrease in the return to work rate after parental leave (of more than 90 days) from 86.4% in 2020 to 83.8% in 2021.

Hybrid – a new way of working

Throughout 2021, the majority of our colleagues (where roles allowed) continued to work in a hybrid model, splitting time working both in NAB premises and home/elsewhere. NAB will continue to support a hybrid working model based on feedback gathered from colleagues, via Group wide surveys and listening activities, indicating hybrid as their preferred way of working. While we have demonstrated adaptability to serve customers well regardless of where colleagues are working from, we want colleagues to be able to start coming together again to unlock the benefits of face-to-face collaboration work, development and team building, when it is safe to do so. We recognise that flexibility, wellbeing and colleague’s mental health is a core requirement and part of our employee value proposition and will help us to attract and retain the very best talent for NAB. A Hybrid Handbook was developed and delivered to support both leaders and colleagues through this on-going transition. Socially, a two-week Hybrid Habits Workplace campaign was run engaging over 14,000 colleagues, sharing and reinforcing successful hybrid working through colleague stories and conversations.

Engaging through our employee resource groups

Across NAB, employee resource groups empower colleagues to work together on issues they care about. They role model inclusion in their day to day actions and look to identify opportunities for us to improve both the colleague and customer experiences. NAB has four employee resource groups:

• Gender Balance – influencing change and action on gender equality and why it matters.
• NABility – looking beyond disability to ability.
• NAB Pride – celebrating all LGBTI+ people for who they are.
• Cultural Inc – harnessing the power of cultural inclusion.

CUSTOMER INCLUSION

Our colleagues take pride in understanding the needs of our customers and innovate via inclusive design to ensure access to all services and products they need with ease. In 2021, the following key initiatives have taken place to support better customer inclusion and further innovation:

Valuing our customers for who they are

We are committed to making sure our customers are respected and valued for who they are. In March, NAB added an additional gender marker and salutation options in our systems allowing our trans and gender diverse customers the ability to truly reflect how they identify.

Improving accessibility for our customers

We want to make banking inclusive for everyone. We placed 6th in the Access and Inclusion Index by the Australian Network on Disability.

Further, this year our CEO signed the global Valuable 500 Initiative – a movement putting disability on the business leadership agenda.

Inclusive events for our customers

We participate in a number of customer events that focus on inclusion of all customers. Throughout 2021, while events may have looked different in the COVID-19 environment, we were proud to support: Pride Cup, Midsumma Festival and NAB Security Awareness Seminar and Home Loan Seminars provided in Auslan by NAB Banking Advisors. We also ran radio ads for NAB’s Indigenous Customer Service Line in First Nations languages.

For information about how NAB supports Indigenous businesses and customers experiencing vulnerability refer to the 2021 Annual Review.

Sustainable business is good business. We have an ongoing responsibility to safeguard our economy and protect the long-term interest of our customers, colleagues, shareholders and the community. It is our responsibility to make good long-term decisions. This is how we will continue to serve customers well and help our communities prosper for years to come.

We use a range of tools and approaches including philanthropy, corporate responsibility and shared value – leveraging our core assets and expertise as a bank to drive commercial responses to society’s biggest challenges.

An annual materiality assessment identifies the important environmental, social and governance (ESG) themes that shape our business and impact our community. This assessment process is detailed in our 2021 Annual Review and on our website.

Social Impact is embedded across the Group by:

• Engaging with stakeholders to identify current and emerging material issues, challenging NAB to develop mutually beneficial solutions and helping to define strategic direction.

• Implementing a Social Impact program that sets clear objectives; establishes appropriate policies, procedures and activities; and measures and reports on progress.

• Integrating ESG management and reporting into governance structures and internal communications to ensure that Social Impact is understood by the Board, executives and our colleagues.

Oversight of Social Impact activities rests with the NAB Board, who are provided with updates at least bi-annually on our positive societal impact as well as ESG risks, and other related matters.

Social Impact performance
Further information on the Group’s Social Impact approach and performance is provided in the 2021 Annual Review (PDF, 9.3 MB), the 2021 Sustainability Data Pack and on the Group’s website at www.nab.com.au/si. External assurance is provided over the SI data contained in the 2021 Annual Review and 2021 Sustainability Data Pack.

You can view our relevant policies at our Resource Library.

Risk is an inherent part of NAB’s business and the effective management of risk is a fundamental enabler of our strategic plan. The strategy for managing risk is to protect customers and enable sustained performance. This is achieved through applying a Risk Management Framework, documented as part of the Risk Management Strategy, which is provided at least annually to the Australian Prudential Regulation Authority to meet our prudential requirements.

NAB applies a Three Lines of Defence operating model in relation to the management of risk. The overarching principle of the model is that risk management capability must be embedded within the business to be effective. The role of each line of defence is:

• 1st Line of Defence – Businesses own risks and obligations, and the controls and mitigation strategies that help manage them.
• 2nd Line of Defence – A functionally segregated Risk function develops risk management frameworks, defines risk boundaries, provides objective review and challenge regarding the effectiveness of risk management within the first line businesses, and executes specific risk management activities where a functional segregation of duties and/or specific risk capability is required.
• 3rd Line of Defence – An independent Internal Audit function reporting to the Board monitors the end-to-end effectiveness of risk management and compliance with the Risk Management Framework.

Our material risks are:

The Risk Management Framework is the sum of the Group’s approach to risk management. It is underpinned by consideration of the impacts of our business decisions on our customers, our community and our people. As a Group, responding effectively to those material risks with Environmental, Social and Governance (ESG) implications is important to maintaining our financial performance, reputation, long-term strategy and vision.The Group has a set of Environmental, Social and Governance (ESG) Risk Principles (PDF, 314KB), which help integrate ESG risk considerations into the Risk Management Framework.

Risk Governance

Risk governance refers to the formal structure used to support risk-based decision-making and oversight across all our operations. This consists of Board committees and management committees, delegations of authority for decision-making, management structures and related reporting.

The Board provides strategic direction for our business and represents the interests of our shareholders through the creation of sustainable value. This is achieved through a focus on customers, employees and the broader community. The Board is supported by its committees in carrying out its responsibilities (Charters are available on nab.com.au).

The Board delegates responsibility for the day-to-day management of the Group’s operations to the Group Chief Executive Officer (CEO). The Group CEO delegates authority to members of the Executive Leadership Team (consistent with their BEAR accountabilities) and to executive risk management committees.

The Group CEO oversees enterprise-wide risk management (under delegation from the Board) through the Executive Risk Committee and its supporting sub-committees. At the divisional level, the business risk management committees have been established to provide customer oriented risk review and challenge across the value chains and support the discharge of risk-related BEAR accountabilities for relevant members.

NAB recognises that it has an important role to play in the Australian political process and in the development and promotion of policy.

Since 2016, NAB has not made individual donations to any political party, Parliamentarian, elected official or candidate for political office. From time to time, NAB representatives may attend business forums hosted by major political parties. Any payments for event attendance received by political parties will be included in the Australian Electoral Commission register.

You can also view the below:

• Group Political Contributions Policy (PDF, 535KB)

The Board is responsible for the Group's remuneration policy and framework. In particular, the Board:

• approves remuneration policy and remuneration arrangements for the Group including the Group CEO and Executive Leadership Team
• evaluates the performance of the Group CEO, Executive Leadership Team and other senior executives
• oversees NAB’s employee conduct management framework and consequence management outcomes, including impact on remuneration outcomes
• approves remuneration arrangements for non-executive Directors.

The Board has established a People & Remuneration Committee to assist in governing remuneration across the Group. The People & Remuneration Committee supports the Board in discharging its repsonsibilities relating to people and remuneration strategies, policies and practices of the Group. The People & Remuneration Committee undertakes these activities with the objective that they:

• align with and support the overall Group Strategy
• support the Group’s purpose, values, strategic objectives and risk appetite (while not rewarding conduct or behaviours that are contrary to these aims)
• are reasonible, fair and in line with current governance, legal and regulatory requirements
• meet the needs of NAB and the expectations and requirements of shareholders, customers and regulators
• responsibly reward individuals for performance
• encourage behaviour that is ethical, delivers sound customer outcomes, supports NAB’s long-term financial soundness and aligns with prudent risk-taking.

In fulfilling this role, its principal activities include:

• considering individual executive performance in the context of Group performance and recommending to the Board each reporting period the fixed remuneration and variable reward outcomes for the Group CEO, Executive Leadership Team and certain other senior executives
• monitoring and making recommendations regarding deferred equity vesting outcomes
• oversight of NAB’s employee conduct management framework and consequence management outcomes (including impact on remuneration outcomes).

Remuneration in 2021

The executive remuneration framework delivers an appropriate portion of remuneration linked to performance outcomes. Under the Annual Viable Reward (VR) plan, performance is assessed by the People & Remuneration Committee and the Board, informed by the measures in the Group Performance Indicators, together with a qualitative assessment of other relevant factors, and individual performance.

The Board spent a significant amount of time balancing customer, community, and shareholder interests, while at the same time appropriately recognising the achievements of the Group CEO and Group Executives.

The Board considered performance in 2021 demonstrated a momentum shift in delivery against the Group's strategy and business plan. The Board is confident the Group is well positioned to support economic recovery in Australia and New Zealand in 2022.

Based on the performance over 2021, the Group CEO’s Aannual VR outcome is 121% of fixed remuneration (81% of the maximum opportunity). Annual VR outcomes for Group Executives ranged between 105% to 149% of Aannual VR target (70% and 99% of the maximum opportunity).

Details of all remuneration matters for the Group CEO and Group Executives are provided in the Remuneration report.

Remuneration in 2022

The Board continues to monitor NAB’s executive and Group remuneration frameworks to ensure alignment with the Group’s purpose, strategic objectives and risk appetite. The Board has approved changes to the Group’s remuneration framework for 2022 to create simplicity and more consistency and fairness in our remuneration framework. The changes:

• Remove or reduce variable reward for many colleagues, placing more emphasis on fixed pay to give colleagues more certainty and encourage more focus on customers.
• Standardise target variable reward participation (including some Group Executives) to create more consistency and fairness.

These changes set an appropriate balance between fixed remuneration and variable reward and will allow colleagues to focus on serving customers well. Implementation will be a phased approach over the next 12 to 18 months starting on 1 October 2021 with customer-facing businesses.

NAB considers that the changes will support the Group’s purpose, strategic objectives and risk appetite, and reflect the expectations of customers, regulators and shareholders.

The Board will consider enhancements over the coming year to ensure the executive remuneration framework continues to support the delivery of the Group’s strategy and meet regulatory requirements. The Board will balance these requirements within an effective remuneration framework that is competitive and appropriately rewards our Executive Leadership Team.

Information on the Group’s remuneration and performance frameworks and outcomes for 2021 are set out in NAB’s 2021 Remuneration Report.

• Remuneration Report in the Report of the Directors in the Annual Financial Report (PDF, 2.1MB)
• Financial Services Companies Peer Groups (PDF, 67KB)

We're committed to protecting the bank and our customers by meeting our legal and regulatory requirements in the areas of financial crime. This includes anti-money-laundering and counter-terrorism financing (AML/CTF), anti-fraud, anti-bribery and corruption, and sanctions and embargoes.

Good corporate governance is a fundamental part of our culture and business practices in the prevention of financial crime. Our corporate governance framework along with effective risk management is key in the prevention of financial crime. Find out more about our approach to the management of financial crime and how customer due diligence including know your customer verification helps us to combat our fight against criminal activity.

External commitments and activities in financial crime prevention include:

• reflecting in our policies and procedures, Australia’s adoption of the FATF Recommendations (International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation).
• adoption and commitment to the Wolfsberg Financial Crime Compliance Questionnaire (PDF, 247KB).
• developing AML/CTF and Sanctions Policies and Framework to comply with applicable laws and regulations, articulated in NAB's Anti-Money Laundering and Counter-Terrorist Financing (AML/CTF) and Sanctions Policy Statement (PDF, 515KB).
• maintaining and making publicly available NAB’s Patriot Act Certification (PDF, 167KB) regarding correspondent accounts for Foreign Banks. The Patriot Act Certificate is available to any financial institution that requires a Patriot Act Certificate from the NAB Group.
• communicating and making publicly available our Anti-Bribery and Corruption Policy (PDF, 873KB).
• compliance with local and international AML/CTF rules and regulations.
• compliance with all sanctions laws and regulations in the jurisdictions in which NAB operates.
• compliance with international anti-bribery and corruption rules and regulations.

We are also a signatory to the UN Global Compact (UNGC) which includes a commitment to work against corruption in all its forms, including extortion and bribery. See our latest UNGC Communication on Progress.

NAB commits to act as a model litigant and has adopted a Model Litigant Policy.

We recognise our responsibility to act honestly and fairly in the conduct of litigation and make commitments on the way we will conduct ourselves in the handling of claims and litigation.

Those commitments include:

• dealing with claims promptly and not causing unnecessary delay;
• endeavouring to avoid, prevent and limit the scope of legal proceedings wherever possible;
• where it is not possible to avoid litigation, facilitating the just resolution of the litigation as quickly, inexpensively and efficiently as possible;
• not taking advantage of a claimant who lacks the resources to litigate a legitimate claim; and
• not relying on technical defences unless NAB’s interests would be prejudiced.

It is not limited to particular customer segments nor is it limited to any particular type of claim or litigation.

The Financial Claims Scheme (FCS) is an initiative by the Australian Government to provide protection and quick access to your deposits in financial institutions in the unlikely event that one fails.

How the Financial Claims Scheme works

Under the FCS, certain deposits are protected up to a limit of $250,000 for each account holder at any bank, building society, credit union or other authorised deposit-taking institution that’s incorporated in Australia and authorised by the Australian Prudential Regulation Authority (APRA).

The FCS can only come into effect if it’s activated by the Australian Government when an institution fails. Once activated, the FCS will be administered by APRA who would aim to pay the majority of customers their protected deposits within seven calendar days.

Application of the FCS limit

The FCS limit of $250,000 applies to the total of an account holder's deposits under the one banking license.

This means, all deposits held by an account holder with a single banking institution, including accounts with parts of the business operating under a different trading name, count towards the limit. For example, deposits you have with NAB, nabtrade and Ubank would count towards the $250,000 limit.

NAB businesses covered by the Scheme

The FCS applies to NAB, nabtrade, ubank and Citi Consumer business.

Deposits covered by the Scheme

The FCS applies to a wide range of deposits held with NAB, including:

• savings accounts
• call accounts
• term deposits
• current accounts
• cheque accounts
• debit card accounts
• transaction accounts
• personal basic account
• cash management accounts
• farm management deposits
• pensioner deeming accounts
• mortgage offset accounts, either 100 per cent or partial offset, that are separate deposit accounts
• trustee accounts
• retirement Savings Accounts
• first home saver accounts that are deposit accounts

Further information on the FCS

If you’d like to know more about the FCS there’s information available on the FCS website.

Our core behaviours encourage our people to speak up and have open, honest conversations. Our Code of Conduct, compliance standards, and policies guide our day-to-day decisions, actions and behaviours and govern our business.

Our Group Whistleblower Protection Policy (PDF, 428KB) is applicable to all employees (including all directors, officers, employees, former employees, contractors, subcontractors and agents of the Group) and subsidiaries across our operations. The Policy complements the normal communication channels that exist for raising concerns between people leaders and employees without fear of reprisal. All employees (and former employees) have access to the independently managed KPMG FairCall Service.

The Group Whistleblower Protection Policy and Group Whistleblower Program are part of the Group Corporate Governance and Risk Framework. Overall governance of the Group Whistleblower Program is undertaken by the Board Audit Committee with day-to-day operation of the Program managed by Internal Audit.

The Group Whistleblower Committee is chaired by our Chief Audit Officer and meets bi-monthly. The Whistleblower Committee is comprised of senior leaders from across the business and is responsible for oversight of the Whistleblower Program and decisions and activities of Program officers, ensuring appropriate activities are undertaken to raise awareness of the Program across the business and ensure effective and regular reporting to Board Audit Committee in relation to the work of the Program.