The Reserve Bank of Australia will need to rethink the governance of its subsidiary, Note Printing Australia, and either have the board comprise wholly of bank executives or, alternatively, mainly independent directors, a review by consultants of Cameron Ralph proposes.The RBA requested the review as part of its follow-up to the uncovering of allegations of bribery involving the Securency joint venture and NPA (which owned the 50 per cent stake in Securency)."In the longer term, a clear strategy for each of the entities should be developed, before attempting to establish the most appropriate governance arrangements," the consultants wrote in a report to the RBA board. The RBA released the report yesterday."For example, if NPA is to focus primarily on producing the RBA's notes, and other domestic business, it would be appropriate for the board to be comprised wholly of Bank executives," the report said."On the other hand, if NPA is to continue to be a commercially focused entity, looking for global opportunities, then it may be of value to appoint independent directors with particular skills and experience in the respective industries, including appointing an independent chairman," the report said.The consultants noted that, given "the likelihood that litigation may continue for some time, implementation of any agreed strategy with respect to either company may be delayed."On the wider issue of how appropriate the RBA's scrutiny of its wayward subsidiary was, Cameron Ralph said the RBA took "appropriate action" to monitor the governance of NPA."The bank gave reasonable consideration as to the governance arrangements for the two companies, and put in place processes for their oversight and reporting which were broadly consistent with usual practice at the time.  "The Bank appointed people whom it was entitled to believe could direct the affairs of the companies with due care, diligence and skill. "The Bank received regular reports both at management and board level, and responded to those reports in a considered and deliberate way."There is evidence of the Bank taking appropriate action where the entities appeared not to be performing in line with the bank's expectations and/or standards.""Clearly, with the benefit of hindsight, there could have been more oversight applied to the activities of the two companies, which may have detected earlier the alleged illegal payments, but that does not mean that the bank's oversight at the time was inappropriate."