What is the form of letter of appointment used by Commonwealth Bank?

Definition & Meaning

The form of letter of appointment used by Commonwealth Bank is a formal document that outlines the terms and conditions under which an individual is appointed to a specific role, such as a director or a third-party representative. This letter serves as a legal agreement that defines the responsibilities, authorities, and expectations associated with the appointment. It is essential for ensuring clarity in the roles and for compliance with corporate governance standards.

Key Elements of the Letter of Appointment

Each letter of appointment from Commonwealth Bank typically includes several critical components:

• Position Title: Clearly states the role being appointed.
• Responsibilities: Outlines the specific duties and expectations associated with the position.
• Term of Appointment: Specifies the duration of the appointment, including start and end dates.
• Remuneration: Details any compensation or benefits associated with the role.
• Compliance Requirements: Highlights the need for adherence to relevant laws and corporate policies.

How to Obtain the Letter of Appointment

To obtain a letter of appointment from Commonwealth Bank, individuals typically follow these steps:

• Application Process: Submit an application for the desired position, which may include interviews and background checks.
• Selection: Once selected, the bank will prepare the letter of appointment tailored to the specific role.
• Formal Issuance: The letter is issued directly to the appointee as part of the onboarding process.

How to Use the Letter of Appointment

The letter of appointment serves multiple purposes:

• Legal Documentation: Acts as a binding contract between the bank and the appointee.
• Reference for Responsibilities: Provides a clear outline of what is expected from the appointee.
• Governance Compliance: Ensures that all parties are aware of their obligations under corporate governance policies.

Examples of Appointment Letters

Commonwealth Bank issues various types of appointment letters based on the role:

• Board Appointments: These letters are detailed and include references to governance guidelines, remuneration, and ASX disclosure requirements.
• Third-Party Authority: For family members or representatives managing accounts, the "Authority to Operate – Third Party" form is used.
• Employee Contracts: While not publicly available, these follow standard employment practices and include compliance with laws.

Legal Use of the Letter of Appointment

The letter of appointment is a legally binding document that ensures both parties understand their rights and obligations. It is crucial for:

• Establishing Authority: Confirms the appointee's authority to act on behalf of the bank.
• Mitigating Risks: Helps in reducing legal risks by clearly defining roles and responsibilities.
• Compliance with Regulations: Ensures adherence to financial regulations and corporate governance standards.

Who Typically Uses the Letter of Appointment

The letter of appointment is commonly used by various stakeholders within Commonwealth Bank:

• Directors: Non-executive directors receive detailed letters outlining their governance responsibilities.
• Third-Party Representatives: Family members or authorized individuals managing accounts require specific authority letters.
• Employees: New hires receive letters that outline their roles and compliance expectations.

Steps to Complete the Letter of Appointment

Completing the letter of appointment involves several steps:

• Drafting: The bank drafts the letter based on the specific role and requirements.
• Review: The appointee reviews the letter to ensure all details are correct.
• Signing: Both parties sign the document to formalize the appointment.
• Distribution: Copies of the signed letter are distributed to all relevant parties for their records.