BEAR risks distorting financial services remuneration

BAER

31 October 2017
| By Mike |
image
image
expand image

The Federal Government’s Bank Executive Accountability Regime (BEAR) legislation risks undermining the authority of the boards of the major banks, according to the Australian Shareholders Association (ASA).

The ASA has used a submission to the Senate Economics Legislation Committee inquiry into the BEAR legislation to argue that while it supports tighter monitoring of the major banks, it is opposed to the undermining of the role of duly elected company boards.

“We strongly oppose the Government or governance agencies prescribing, in detail, remuneration structures for the private sector,” the ASA submission said.

“The ASA is of the view that increased accountability by ADIs and the framework for that accountability should not come at cost to the current corporate law framework whereby shareholders delegate the management of companies to boards, including the framework for remuneration of executive management,” it said.

It said that, in turn, boards were held accountable to shareholders for the remuneration framework and other aspects of company management.

“We oppose, therefore, the central premise of the bill which legislates the determination of aspects of remuneration,” the ASA said.

It said it did not see determination of executive remuneration as the role of government or the Australian Prudential Regulation Authority (APRA).

It said it had expressed previously and continued to express its concern that the legislation would distort remuneration structures in the entire financial services sector and would have unforeseen consequences in overlapping sectors.

 

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

3 weeks 5 days ago

This verdict highlights something deeply wrong and rotten at the heart of the FSCP. We are witnessing a heavy-handed, op...

1 month ago

Interesting. Would be good to know the details of the StrategyOne deal....

1 month ago

Insignia Financial has confirmed it is considering a preliminary non-binding proposal received from a US private equity giant to acquire the firm. ...

1 week 3 days ago

Six of the seven listed financial advice licensees have reported positive share price growth in 2024, with AMP and Insignia successfully reversing earlier losses. ...

6 days 3 hours ago

Specialist wealth platform provider Mason Stevens has become the latest target of an acquisition as it enters a binding agreement with a leading Sydney-based private equi...

5 days 7 hours ago