APRA signals stronger action on BEAR
The boards of the major banks and financial institutions have been placed on notice that they will have to do more than the bare minimum with respect to deferring or clawing back executive salaries under the Bank Executive Accountability Regime (BEAR).
The Australian Prudential Regulation Authority (APRA) has signalled it may seek to impose longer deferrals and other measures.
APRA chairman Wayne Byers has told a Sydney forum that, disappointingly, too many of the boards of the banks and financial institutions covered by the BEAR have done the bare minimum.
"At this event last year, I noted that it would be disappointing if the industry viewed the minimum deferral requirements of the BEAR as the default,” he said. “Disappointingly, that is what seems to have largely happened.”
“We will be examining the case for longer deferrals, at least in some instances, to better align vesting with the emergence of risks,” Byers said. “In addition, the Royal Commission recommended APRA require additional clawback arrangements.”
“Many Boards argue that it is very difficult to make clawback work in practice. That may well be, but if so it won’t be the case of simply going without - longer deferral and malus periods, possibly combined with post-vesting holding locks, might be needed to compensate,” the APRA chairman said.
Recommended for you
The Reserve Bank of Australia (RBA) has lowered rates to a level not seen since mid-2023.
Financial Services Minister Stephen Jones has shared further details on the second tranche of the Delivering Better Financial Outcomes reforms including modernising best interests duty and reforming Statements of Advice.
The Federal Court has found a company director guilty of operating unregistered managed investment schemes and carrying on a financial services business without holding an AFSL.
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
