The failure of the Federal Government and Australian Securities and Investments Commission (ASIC) to strengthen the governance of the regulator with a board will act to the detriment of all its stakeholders.
“ASIC is set to receive significant new powers and the failure to apply any independent oversight to its activities is a significant weakness in today’s announcement,” said John Brogden, Managing Director & Chief Executive Officer of the Australian Institute of Company Directors.
“Directors fully support measures to provide extra funding to ASIC and the principle of extra powers as a well-resourced regulator is necessary for efficient markets and a stable economy,” Mr Brogden said.
“However, the extra funding and potential new powers come with additional responsibility. We believe that an external board of independent members is necessary to ensure ASIC functions according to the highest possible standards,” Mr Brogden said.
“It is disappointing that both the AICD’s proposal for an independent board and the Capability Review’s proposal for an internal board of commission have been rejected. The Reserve Bank of Australia benefits from independent directors on its board, and we believe that ASIC would similarly benefit.
“ASIC’s effectiveness will be greatly enhanced by its removal from the Australian Public Service, and other measures announced today. The extension of Greg Medcraft’s term as ASIC chair will also provide necessary continuity.
“It’s unfortunate that neither the Government or ASIC was prepared to take the extra step of the establishment of a board,” he said.
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