Reflection before reaction

My daily consumption of media had me pore over an article in The Conversation the other day, my head nodding like one of those kitschy dogs on the back ledge of cars and my mouth muttering yes, yes, yes.

And then I stopped, the affirmative pronouncements giving way to a reminder from way back, when a particularly wise person in my life once suggested we should pause to reflect before we react.

The article was all about APRA’s announcement of an independent inquiry into the Commonwealth Bank of Australia (CBA) and its governance, culture and accountability in the light of the money-laundering scandal embroiling the bank.

The author’s thrust seemed perfectly reasonable.

APRA, as the regulator, is meant to be a participant in, rather than a spectator to, the upholding of banking regulations. And by outsourcing the task of conducting the inquiry to an independent group, APRA had pretty much abrogated its responsibilities. Surely this made it deserving of the criticism?

So while I nodded and muttered yes during my first reading, I took the sage advice I’d been given all those years ago and did my reflecting…

Yes, in an ideal world, APRA, with its broad regulatory powers, should have done its job rather than delegate it to others while it sat by on the sidelines.

Perhaps all the more so, too, as it had previously been rather vocal in telling everyone it was going to extend its regulatory powers to look at the culture of the organisations it regulates.

So looking at it bluntly, it’s fair to say APRA already has the power and the authority to conduct the inquiry into CBA and others.

However, when we look at the concrete cold facts, there are two key points that allow me to excuse APRA.

Firstly, the CBA case has been particularly high-profile, enjoying reams of press coverage and an equal amount across radio, television and the myriad social media platforms. Everyone seems to have an opinion on it, to the point where its status has risen to notoriety levels.

I’d like to believe the folk at APRA took these developments into consideration when arriving at what might well prove to be a most judicious decision. I’d like to believe, too, that they felt it needed to be handled – and seen to be handled – in a most robust fashion.

And secondly – and perhaps more importantly – being a government entity or regulator, APRA has a limited number of staff and a finite budget.

As such, it will never, ever be able to do the perfect job of forever preventing everything untoward happening in any organisation or company that it regulates.

And taking my generosity up a notch or two, APRA should, in many respects, be a surrogate of sorts, a back-up, if you will.

After all, shouldn’t the primary responsibility for ensuring that there’s best practice governance across the organisation fall to the members of the board who by their very positions have a far more intimate and intense understanding of and involvement with the organisation in question?

Until next time,


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