Australia: Regulating governance, culture, remuneration and accountability risks
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The Australian Prudential Regulation Authority (APRA) plans to intensify efforts to lift standards of governance, culture, remuneration and accountability (GCRA) across the industries it regulates.
APRA’s intensified approach to GCRA aims to strengthen the resilience of financial institutions.
The approach will address issues such as poor risk governance, misaligned incentives and misconduct that have undermined public confidence in the financial sector.
The key attributes of APRA’s new approach to GCRA are:
- strengthening the prudential framework in areas such as remuneration and risk management, and incorporating the wider use of risk governance declarations and self-assessments;
- sharpening APRA’s supervisory focus by increasing internal resourcing and capabilities for GCRA supervision, adopting new tools to assess GCRA practices and holding entities more forcefully to account when deficiencies are identified; and
- sharing APRA’s insights to better inform industry and the public about APRA’s work, promote better GCRA practices, and drive greater accountability among boards and management.
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