This will provide a greater opportunity for the Reserve Bank to communicate any concerns with directors, and help to address the information asymmetry between senior management and directors described earlier. The Reserve Bank will also gain a potentially better insight into the effectiveness of the Board and how it is discharging its oversight duties.
The Reserve Bank will also consider how to support directors in understanding their duties, via induction sessions for new independent directors. The development of guidance on the Reserve Bank’s expectations around risk management. This will help provide a clearer and more consistent benchmark for bank directors to attest whether they believe their institution is adequately managing risks.