APRA eyes bank succession
The recent flurry of management changes at Australia's big banks feeds into the regulator's desire to have more oversight of board and executive appointments and succession planning.
After the recent upheaval in the senior Australian banking ranks again highlighted the failure of boards and CEOs to consistently build internal succession, it's worth remembering the Australian Prudential Regulation Authority (APRA) also raised concerns about the issue just two weeks ago.
The primary focus of the regulator’s governance review paper was boards, but executive succession comes up with banks in particular, specifically because the Financial Accountability Regime (FAR) imposes a strengthened responsibility and accountability framework for banks, their directors and senior executives.
APRA proposes major banks and systemically important institutions “should engage more closely with APRA in the appointment process and that entities should improve their succession planning and appointment processes”.
“While APRA does not have formal approval or veto powers, APRA seeks to heighten its oversight of, and entity focus on, the suitability of individuals in responsible person roles,” the review said.
