Financial Services Regulation Report 2022

Running head: FINANCIAL SERVICES REGULATION
Financial Services Regulation
Name of the Student
Name of the University
Author Note

FINANCIAL SERVICES REGULATION1
Abstract
The Final Report by Commissioner Hayne has been released to the public on the 4th of
February 2019 accompanied by the response of the Government towards the
recommendations of enquiry. The model of corporate governance including the board and
management separation in Australia is sound as per the report. The boards would be
conferred with the liability for the best assessment of the governance and culture. The
recommendations made by Hayne relating to the changing governance and culture in its final
report have been supported by the AICD. Hayne has considered various significance
observations relating to the governance as well as role of the board in his report. To be more
precise, the drawing upon the CBA relating to the anti money laundering as well as counter
terrorist financing and upon the NAB regarding the fees for advisor service has occupied the
central focus.
Linking regulation and deregulation with financial crises in the aftermath
of Royal Commission into Misconduct in the Banking, Superannuation and
Financial Services Industry
Introduction
The Final Report by Commissioner Hayne has been released to the public on the 4th of
February 2019 accompanied by the response of the Government towards the
recommendations of enquiry. The highlighted concern of the report are the failure of the
organisational culture, the arrangements of the governance and the systems for remuneration
are located at the centre of the misconduct that has been examined within the commission. In
the opinion provided by Hayne, improvement brought about in all these areas has the
probability of reducing the risk of the misconduct at future times. On the other hand,

FINANCIAL SERVICES REGULATION2
improvements brought about in one of the areas will require reinforcement of improvements
in the other areas as well1. This report further emphasised upon the fact that the chief
responsibility pertaining to the misconduct within the industry of financial services belongs to
the entities those are concerned as well as the individuals managing as well as controlling
them. Such individuals includes the senior management and your boards. Hayne did not
allowed the entities to avoid liabilities for changing the drive. He further focused on the
regulator playing important role in the supervision relating to culture, the governance and the
remuneration. The key to such responsibility lies in the non financial risks supervision. This
final report has also been focused on several key principles related to good governance2. This
includes the significance of board challenge pertaining to management, allowing the right
information flow towards the board for the purpose of allowing the directives to discharge
duties imposed upon them. In one hand, this report has strived to avoid the more radical
proposals with respect to remuneration, which includes the variable remuneration ban floated
within the interim report. On the other, Hayne need several recommendations, which includes
calling up APRA for the purpose of having greater over side as well as the requirement of the
entities to have higher regard with respect to non financial metrics3. Hayne recommended
new body for oversight, which has been conferred with the responsibility of conducting
regular reviews of independent nature with respect to performance. Hayne also pointed out
the importance that the individuals would add to the board of the regulator4. This research
paper would strive to bring a focus upon the board and the governance and other related
aspects belonging to the final report.
1 O'Brien, Justin. "“Because They Could”: trust, integrity, and purpose in the regulation of corporate governance
in the aftermath of the Royal Commission into Misconduct in the Banking, Superannuation and Financial
Services Industry." (2019) Law and Financial Markets Review 13.2-3: 141-156.
2 Hunt, Ben, and Chris Terry. Financial institutions and markets. (Cengage AU, 2018).
3 Hunt, Ben, and Chris Terry. Financial institutions and markets. (Cengage AU, 2018).
Davis, Kevin. "The Hayne Royal Commission and financial sector misbehaviour: Lasting change or temporary
fix?." (2019) The Economic and Labour Relations Review 30.2: 200-221.
4 Klettner, A., T. Clarke, and M. Boersma. "Corporate responsibility and financialisation in the international
banking sector: the limits of current governance systems." (2019) European Academy of Management.

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Implications of the directors
The model of corporate governance including the board and management separation in
Australia is sound as per the report. The boards would be conferred with the liability for the
best assessment of the governance and culture. This would require the most apt metrics that
will not only concerned with indicating the lags, the stakeholders to engage and other
external support of independent nature. Certain fundamental tenets relating to governance has
been reinforced by the report requiring the boards and committees to abide by certain
requirements. This includes the sufficient challenge me to the management5. It requires the
continuous and intermittent ok to satisfy regarding the receipt of correct information as well
as inputs from the management for the purpose of arriving at complex decisions. It also
requires are regular assessment, measuring and monitoring of the corporate governance and
culture. A rigorous oversight relating to risks which includes non financial risks would also
be provided under this. There have been several commentaries that has been made by him
regarding the extent and nature of the duties relating to directors. This includes the directors
to be conferred with the duty to ensure their actions in pursuance to their duties as a director
to exhibit immense good faith6. All the actions of the directors in pursuance of their position
as a director needs to be solely undertaken for ensuring the welfare and beneficial interest of
the company. All the duties pertaining to the directors are required to be discharged
supported by a proper cause. The main emphasis of the directors needs to be centred around
the company whose responsibility has been expressly entrusted upon them. With regard to
these aspects, it can be stated that the concern of the directors does not only centred around
the financial returns that has been provided to the shareholders for a particular period. It
needs to be conceived as something beyond the same7.
5 Schmulow, Andrew, Karen Fairweather, and John Tarrant. "Restoring confidence in consumer financial
protection regulation in Australia: A Sisyphean task?." (2019) Federal Law Review 47.1: 91-120.
6 O'Brien, Justin. Trust, Accountability and Purpose: The Regulation of Corporate Governance. (Cambridge
University Press, 2019).
7 Menzies, Gordon, et al. Restoring Trust in Finance: 2018 From Principal-Agent to Principled Agent. No. 48.