Regulators tighten accountability framework

The Australian Securities and Investments Commission (ASIC) has revised its internal governance framework and implemented a new accountability regime.

The changes are designed to strengthen ASIC’s governance and accountability measures as part of a reform program introduced in response to the recommendations of the banking royal commission.

Recommendation 6.12 of the royal commission’s final report called on both ASIC and the Australian Prudential Regulation Authority (APRA) to reform their internal accountability frameworks to reflect requirements prescribed in the Banking Executive Accountability Regime (BEAR).

“In a manner agreed with the external oversight body, each of APRA and ASIC should internally formulate and apply to its own management accountability principles of the kind established by the BEAR,” the recommendation reads.  

The revised framework outlines the manner in which ASIC’s commission collectively exercises its functions and powers to deliver on its obligations as a corporate watchdog.

Among the changes in ASIC’s updated framework are:   

• an updated committee structure to strengthen oversight of executive actions and assist the commission in the performance of its responsibilities; and       
• accountability statements for executive directors and commissioners that identify core responsibilities and individual accountabilities.

Following the release of ASIC’s updated framework, chair James Shipton commented: “The update reflects the importance ASIC places on transparency, regulatory integrity and effective oversight and management of its functions and responsibilities.”

Meanwhile, APRA has published its Governance and Senior Executive Accountabilities report, describing the regulator’s internal governance and accountability arrangements.

The report includes individual accountability statements for senior executive roles and an accountability map.

The accountability statements cover all four APRA members, as well as APRA’s six executive directors, APRA’s chief risk officer and chief internal auditor.

APRA committed to meeting the royal commission’s recommendation by 31 December 2019.

[Related: APRA launches probe into major bank]