Board Matters

Issue 4 - May 2006

News from the Board

This is our fourth newsletter in a series of regular updates from the Board of B&E Ltd designed to provide you with information on the activities of the Board. I hope that you find this update interesting as well as informative. I would welcome your feedback.

Nigel Harris
Chairman

Strategic Plan

Board and Management have recently reviewed our Strategic Plan to ensure that it is relevant. As part of this review we have taken the opportunity to refine our purpose, vision and values as follows.

Our Purpose (Why we exist)
To help people achieve their financial and lifestyle goals.

Our Vision (Our goal for the future)
To BE recognised as the financial institution that provides exceptional service.

Our Values (How we will behave as a Company)

• To be progressive
• We will treat everyone with respect and care
• To be professional in the way we do business
• To provide exceptional service
• To be accessible.

Implementation of the plan has been proceeding well with the Board having approved a number of important strategic projects in recent months including:

• Creation of a strategic partnership with Quadrant Superannuation to improve the range of services for our clients.
• Development of a Distribution Strategy to increase the ways that clients can do business with us.
• Preparation of a long term Financial Plan to ensure that we can adequately prepare for growth and maintain financial discipline.
• Issuing of a Subordinate Capital Note to improve Capital Adequacy.
• Creation of an Internet Cash Management Account to widen the range of deposit products we offer.

There are several other important initiatives in the planning phase that we also expect to be able to tell you about during the next few months.

Policy Reviews

The Board has adopted a robust process for ensuring that its corporate policies are reviewed on a regular basis, with all policies being reviewed at least once annually.

Policies that have been reviewed in recent months include:

• Data Risk
• Capital Adequacy
• Liquidity
• Market Risk
• Operations Risk

Business Continuity Management Plan

B&E has recently completed the preparation of a Business Continuity Management Plan that identifies key business processes, potential business interruption events and strategies for addressing these situations.

This will help ensure that in the event of an unplanned interruption that we can minimise inconvenience to our clients.

Board Performance Review

As part of our commitment to a philosophy of continuous improvement, the Directors undertake an annual appraisal of the effectiveness of themselves and the Board as a whole.

We do this because we believe that it is good corporate governance practice and that it will help improve over time the effectiveness of the board.

Our most recent review was undertaken this month.

Special General Meeting – Governance and Fit and Proper Standards

Our corporate regulator, the Australian Prudential Regulation Authority, has recently released new standards for how Financial Institutions are governed and for Responsible Persons of Financial Institutions.

The Governance standard requires that the Board have in place governance practices that promote good governance. For B&E many of the practices are already in place so the new requirements will not be overly onerous in applying.

The Fit and Proper standards require that responsible persons have the skills, experience and knowledge needed to deliver sound and prudent management and that the interests of members are managed and overseen competently by honest and trustworthy individuals. Responsible persons for B&E are defined as the Directors, the Executives and the External Auditor.

While we also have practices in place that address many of the requirements it is in the Board’s opinion necessary that changes are made to our Constitution to give legal effect to the Fit and Proper Standard and also the Governance Standard.

The Board will be calling a special general meeting in July at the B&E Launceston office to amend the constitution. A great deal of work has been done by the Board and Management to ensure that the constitution can give effect to the new standards and the Directors unanimously recommend that members support the amendments.

Member Friendly Annual Report

The Board is keen to ensure that our members understand how we have performed from year to year. In previous years we have distributed a comprehensive annual report to all members, including detailed financial statements.

For the 2005/06 financial year we have decided to distribute a "Member Friendly" version of the annual report to all members. While a comprehensive Statutory Annual Report will still be available for those members wishing to obtain this level of detail, it is the Board's view that the majority of members would be better served with receiving a report that is written in a plain English and easy to digest form.