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Corporate Governance


The responsible Minister for the FY18-19 period was Senator the Hon Matthew Canavan, Minister for Resources and Northern Australia.

The duties of the responsible Minister in relation to NAIF are set out in the NAIF Act1. These include that the Minister appoints NAIF’s Board and gives direction to NAIF about the performance of its functions through the Investment Mandate. NAIF is required to take all reasonable steps to comply with the Investment Mandate.

The NAIF Act provides that the Minister cannot direct, nor have the effect of directing, NAIF to provide financial assistance for the construction of particular infrastructure, or in relation to a particular person2.

As a corporate Commonwealth entity, NAIF is subject to the requirements of the PGPA Act in relation to corporate governance, reporting and accountability.

Corporate Governance Framework

NAIF has a comprehensive suite of governance policies that are fit for purpose and appropriate for its size and functions. It is a tailored governance framework that incorporates statutory responsibilities under the NAIF Act, Investment Mandate, PGPA Act and other relevant legislation.

NAIF’s core suite of governance policies has been benchmarked against similar agencies in the public and private sectors and reviewed by independent experts3. These experts concluded that in their view the policies they reviewed reflected current Australian best practice as required by the Investment Mandate4.

Review and Continuous Improvement

NAIF approaches its operations on a continuous improvement basis to ensure that it has regard to Australian best practice government governance principles, and Australian best practice governance for commercial financiers as required by section 17(1) of the Investment Mandate. Over the past 12 months

NAIF’s Board reviewed 20 policies including a comprehensive review of NAIF’s Privacy Policy and related procedures to remain responsive to changes in legislation. Six new NAIF specific policies were approved5, namely: Complaint Handling, Corporate Information Security, Due Diligence Costs, Procurement, Records and Information Management and Staff Travel and Expenses.

NAIF maintains a program of periodic independent expert review of material changes to core governance policies, as part of the annual policy review schedule.

Board Charter

NAIF’s Board Charter sets out its roles and responsibilities. This Charter builds off the Board’s legislative accountable authority duties, and outlines key duties and responsibilities. This current Charter is available on the NAIF website.

BARC Charter

The NAIF Board constituted the Board Audit and Risk Committee (BARC), which advises the Board in relation to financial and performance reporting, systems of risk management and oversight, and systems of internal control. The BARC consists of at least three Board members. Pursuant to the PGPA Act, the Chair of the Board, the CEO and the Chief Financial Officer of NAIF cannot be members of the Committee. All Board members are welcome to attend any BARC meeting, with outcomes from BARC meetings reported to the Board as a standing agenda item. The current BARC Charter is available on the NAIF website.

Remuneration Committee

During FY18-19 NAIF commenced planning and establishment processes for a Remuneration Committee (RemCo). The Committee consists of three Board members (which do not include the Board Chair). The RemCo held its first meeting in July 2019, the commencement of FY19-20. Refer to section 9 for a description of the work of the RemCo in supporting the FY18-19 end of year remuneration processes.

Strategic and Corporate Planning

NAIF has developed strategic documents that align with its corporate governance framework and vision. The Strategic Plan sets out the shared vision of NAIF and provides guidance to the Board and Executive. The Corporate Plan 2019-2020, which outlines NAIF’s plan for achievement of its key business strategies, is available on the NAIF website. The Corporate Plan 2018-2019 covering the reporting period is also available on the NAIF website.

Code of Conduct

NAIF maintains a Code of Conduct that requires the observance of ethical guidelines by all NAIF staff.

Conflicts of Interest

In addition to statutory requirements under the PGPA Act, NAIF manages conflicts of interest in accordance with its Conflicts of Interest Policy. The current Conflict of Interest Policy is available on the NAIF website.

The ANAO Performance Audit found that NAIF management of conflicts of interest was effective.

In general terms where a Director has an actual, apparent or potential conflict of interest in relation to a project under consideration, that Director does not receive papers and does not participate in discussions on that transaction. A Conflicts of Interest Register is maintained to record Board members’ disclosed interests. Board meeting minutes record recusals due to disclosed conflicts as they occur. A register of staff Conflicts of Interest is also maintained and processes to manage relevant conflicts are implemented as required.


NAIF is keenly aware of its responsibility as a steward of public resources to be as transparent as reasonably practicable.

NAIF’s disposition is to publish information where doing so does not compromise the interests of the Commonwealth or risk breaching NAIF’s legislated obligation to have regard to industry best practice. This obligation, includes the obligation to protect commercially sensitive information, and arises from an understanding that the Commonwealth’s own interests (including the protection of its reputation) are best served by the protection of confidential information. Confidentiality helps avoid disclosures that might deter proponents, or that might lead private financiers to conclude they can lessen their exposure to a project, in turn increasing demands on the public purse or lessening the achievement of NAIF’s objectives.

NAIF’s current confidentiality protocol which it applies in the public interest, is maintained across all projects. NAIF can release certain information, when releasing the information is agreed between the proponent and NAIF.

NAIF is required to publish on its website, within 30 business days of an Investment Decision being made, certain information regarding all transactions, subject to commercial confidentiality (refer to Figure 7). During the reporting period NAIF published this information in line with legislative requirements.

Anti-Money Laundering/Counter Terrorism Financing (AML/CTF)

NAIF is required to have an AML/CTF program in place which, amongst other things, aims to identify and manage money laundering and terrorism financing risks.

NAIF has enrolled with the Australian Transaction Reports and Analysis Centre (AUSTRAC) and developed a comprehensive AML/CTF program. The AML/CTF program includes a framework for reporting suspicious matters to AUSTRAC together with comprehensive ‘know your customer’ procedures and ongoing customer due diligence and transaction monitoring procedures.


NAIF manages its compliance obligations through its Compliance Plan. No issues were identified in relation to non compliance with relevant legislative, regulatory or policy obligations during the reporting period.

All incidents in FY18-19, recorded in the NAIF Incident Register, in accordance with NAIF’s Incident Management Policy were satisfactorily addressed with no systemic issues identified. The current Incident Reporting Policy is available on NAIF website.

Quarterly Risk Management and Compliance Report

NAIF’s quarterly Risk Management and Compliance Report (RMAC Report) provides ongoing monitoring and reporting of NAIF’s Key Enterprise Risks (KERs). It includes an analysis of the residual risk rating, appetite result, tolerance measures and control effectiveness for each KER including any proposed changes from the previous quarter.

Commentary is included for each KER highlighting relevant activity over the current quarter and whether or not this activity has impacted the residual risk rating. Should a KER be assessed as outside appetite, for example due to control failures and/or tolerance breaches, an action plan to address deficiencies is developed and monitored by the risk owner.

BARC endorsed the RMAC Reports for Board approval for each quarter of FY18-19.

Induction Program

All new NAIF Directors and staff during the FY18-19 period underwent an induction program, which included guidance around their obligations under the NAIF Act, Investment Mandate, PGPA Act and NAIF’s governance framework. This induction program is regularly reviewed and updated.

Annual Compliance Training

NAIF employees are required to complete annual online compliance training which is complemented by tailored face to face training. In FY18-19 NAIF achieved 100 percent compliance with completion of the required online training sessions.

Internal Audit

McGrathNichol is NAIF’s internal auditor. The internal auditor is over half way through a two year Strategic Internal Audit Plan which has been developed by the Board on the advice of the BARC. In formulating that plan, the key drivers were: NAIF’s core business, key organisational risks, priorities established by NAIF’s BARC and executive and NAIF’s business environment.

External Financial Audit

The ANAO, NAIF’s external auditor, confirmed that NAIF’s FY18-19 Financial Statements are compliant with Australian Accounting Standards and the PGPA Rule 2015 and issued an unmodified audit opinion. The field work associated with the FY18-19 Financial Statement audit was outsourced by ANAO to KPMG.


  1. NAIF Act sections 9,11,12,15,16.
  2. NAIF Act section 9(4).
  3. Allens Linklaters (reviewed twelve policies) and Australian Government Solicitor (AGS) (reviewed four policies) in FY16-17. AGS reviewed NAIF’s Privacy Policy in FY18-19.
  4. NAIF Investment Mandate Direction 2018, section 17(1).
  5. Prior to developing NAIF specific policies, NAIF had adopted and complied with Export Finance Australia’s policies.