5 December, 2017
Enhanced regulatory oversight will demand more robust corporate governance
The Australian Government has introduced legislation to enact the Banking Executive Accountability Regime (BEAR). The BEAR imposes greater accountability obligations on senior executives of Authorised Deposit-taking Institutions (ADIs) and puts in place restrictions on their remuneration packages.
The proposed BEAR legislation is designed to increase transparency and accountability in the Australian banking sector, which has faced a wave of regulatory pressure this year. The Australian Prudential Regulation Authority (APRA) will be given extra regulatory firepower to enforce the regime, and will be able automatically to remove and disqualify accountable persons who do not meet their obligations under the BEAR.
APRA has recently signalled that it may also ramp up its regulatory scrutiny of senior executives in the insurance and superannuation sectors in the future. In a submission to the Treasury, APRA indicated that it may change its prudential standards to require accountability maps setting out precise responsibilities of senior staff, to improve governance in the insurance and superannuation industries.
It is clear from the introduction of the BEAR legislation that the Government is seeking to enhance regulatory oversight of all financial services sectors to ensure that senior executives promote robust governance frameworks within their organisations and a positive corporate culture.
For further information, please contact:
Avryl Lattin, Partner, Clyde & Co
avryl.lattin@clydeco.com
