On 25 September Dr Natania Locke (Swinburne, Australia) presented a seminar on “Observations about the self-assessments of governance, accountability and culture following the Australian Banking Royal Commission”. 

The Australian Prudential Regulatory Authority (‘APRA’) launched a prudential inquiry into the Commonwealth Bank of Australia in August 2017, the final report of which was released in May, 2018. This briefly preceded the formal work of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (‘Banking Royal Commission’). Shocking revelations of systemic consumer misconduct were revealed during the public hearings of the Banking Royal Commission. In its Final Report, APRA received much of the blame for failing in the supervision of the regulated services when it came to non-financial risks. Subsequent to the release of the Final Report, APRA was much slower than the Australian Securities and Investment Commission, the financial services conduct regulator, to respond with a plan to tackle its highlighted internal shortcomings. One of the few initiatives APRA has driven forward in the last six months is to require the other authorised deposit-taking institutions under its supervision to self-assess their weaknesses in operational, compliance and conduct risk and to report their findings.

Dr. Locke shared the findings of the common themes identified by APRA from these self-assessments and their implications for governance of financial institutions, but also for corporations more generally. I hope that we may discuss the usefulness of self-assessment as a supervision tool, against the backdrop of shortcomings identified in APRA’s ability to fulfil its supervisory role.

Dr Locke is a senior lecturer at Swinburne University of Technology as well as a corporations lawyer. Her research interests are mainly related to the impact of innovation on corporate and financial regulation.

 

First published: 5 September 2019

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