Richard Perry 
This article discusses the Reserve Bank of New Zealand's corporate governance, financial management and transparency practices within the broader context of international efforts to strengthen central bank governance, transparency and risk management. The article does not address broader governance issues, such as the governance arrangements applicable to monetary policy. As noted in the article, it is possible that some aspects of the Reserve Banks corporate governance framework might change depending on the outcome of the review of monetary policy arrangements.
Much of the last decade has seen increased emphasis on improving central bank corporate governance and transparency. This follows the increased independence under which central banks are now operating and reflects the growing international focus on improving corporate governance structures and corporate financial and risk management.  Increased levels of disclosure and transparency are seen as integral to improving governance and financial management for central banks, as well as for the wider financial community.
* discusses the international initiatives to strengthen central bank corporate governance, financial management and transparency; and
* sets out the operational framework for the Reserve Bank of New Zealand's corporate governance, financial management and risk management within the context of international best practice.
2 Central bank corporate governance, transparency and financial management
Several global factors are encouraging central banks to strengthen their practices in the areas of transparency, financial management and corporate governance. These include:
* Leading by example. Central banks are among the government agencies responsible for implementing international measures aimed at strengthening global and domestic financial systems. This role has encouraged central banks to promote international best practice in areas such as corporate governance, management accountability, financial disclosure and risk management for banks and other financial institutions. In pursuing these reforms, central banks inevitably come under pressure to lead by example, through their own adoption of improved management and transparency practices.
* Increased central bank independence. The last decade or so has seen a number of countries implement monetary policy reforms which have involved conferring a degree of operational independence on the central bank to implement monetary policy. Increased independence carries with it the need for greater transparency of decision-making and accountability, not only in respect of monetary policy, but also in respect of a central bank's other functions and the management of its resources. In turn, that has put a premium on the need for strengthened corporate governance, financial disclosure and risk management practices within central banks.
* Emphasis on central bank best practice. In recognition of the importance of the central bank's role in the economy, and the increasing emphasis on strengthening risk management practices and governance within public and private sector entities, there is increasing international emphasis on the need for best practice for central bank operations. Central banks have been expected to adopt specific international recommendations aimed at strengthening governance, transparency and financial management.
These factors have provided impetus for central banks to improve their operations in all areas. This section of the article specifically considers these developments in relation to central bank corporate governance, disclosure, risk management and financial management.
Central bank corporate governance and disclosure
International standards such as the OECD's Core Principles on Corporate Governance and the …