Seats on the boards of the major banks and financial institutions should not be regarded as a retirement sinecure with the task of overseeing executives requiring a sharp focus, according to the Federal Treasurer, Scott Morrison.
Commenting on the release of the Australian Prudential Regulation Authority (APRA) Prudential Report into the Commonwealth Bank, Morrison signalled that the Government expected better from bank boards and that it also expected the rigorous application of the Bank Executive Accountability Regime (BEAR) when failures occurred.
“It’s not a retirement job. It’s a very serious job. I know that there are thousands of board directors around the country who take that job incredibly seriously. But this should be a wake-up call for every board member in the country, particularly those who are the custodians of the savings and shareholdings of millions of Australians,” he said.
The Treasurer also sought to stress that the Government had moved to press for APRA’s Prudential Inquiry and to impose the BEAR well ahead of the Royal Commission.
“I should stress, what we’re talking about today is a result of something that began last August, well before the Royal Commission,” he said in reference to the APRA inquiry. “These were matters the Government acted immediately on, through APRA, to put in a very high-powered inquiry which has now reported back.”
“Here it is. The report is back now. And the action that is now being taken by the CBA is happening now. Executives are gone, board members are gone. More will go. The BEAR regime is there in place for that to now be used, not just in CBA, but in all of the major banks, to ensure that the accountability is very, very clear.”
