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APRA regulated entities to lift Governance, Culture, Remuneration and Accountability

APRA regulated entities to lift GCRA

APRA have published its plans to significantly scale up its efforts to lift standards of governance, culture, remuneration and accountability (GCRA). We summarise the key changes, what it means and practical steps for financial institutions to get ahead of the curve.

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On 19 November 2019 the Australian Prudential Regulation Authority (APRA) published its plans to significantly scale up its efforts to lift industry standards of governance, culture, remuneration and accountability (GCRA).

With a more intensive regulatory approach to GCRA practices, increased transparency around what ‘good looks like’ and with clear BEAR accountabilities – will this be the start of a regulatory and risk ‘race to the top’?

APRA’s approach to strengthen GCRA

APRA’s approach includes:

  • Strengthening the prudential framework – APRA will develop or review existing risk management (CPS 220), governance (CPS 510) and remuneration standards (CPS 511) making them more prescriptive based on lessons learnt from the Royal Commission and self-assessments.
  • More intensified supervision – an increase in APRA resourcing to focus on supervisory activities. APRA will ‘use its powers more assertively to hold boards and senior management to account for ensuring high standards of GCRA are maintained’.
  • Increased transparency – APRA intends to adopt a more strategic approach to transparency, through initiatives such as board and senior manager declarations, periodic self-assessments and industry benchmarking to promote better practices.

How KPMG can help

We have deep experience across the financial services industry under-pinned by a multi-skilled team who bring global insights and data-enabled technology solutions to address the challenges arising from the uplift of GCRA standards. Our services include:

  • self-assessment remediation plans
  • operating model assessment
  • culture checks
  • remuneration deep dives.

In our report we summarise the key APRA changes, what it means and practical steps to take now for financial institutions to get ahead of the curve.

© 2020 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Liability limited by a scheme approved under Professional Standards Legislation.

KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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