APRA questioned on chair and deputy taking board positions

The Australian Prudential Regulation Authority (APRA) has defended its governance arrangements around members who leave the regulator and ultimately take up roles within regulated entities.

However, the chair of APRA, John Lonsdale, made clear that he did not believe any issues had arisen out of his predecessor, Wayne Byers, taking up a non-executive director role at Macquarie Bank.

Lonsdale also acknowledged that former APRA deputy chair, Helen Rowell, had taken up a non-executive role with Australian Retirement Trust (ART) less than a year after leaving APRA.

Under questioning during Senate Estimates by NSW Labor Senator, Tony Sheldon, Lonsdale said that Byers was “a bank only non-executive director at Macquarie Bank”.

“And we deal with Macquarie Bank,” Lonsdale said.

Senator Sheldon pointed out that three years ago while Byers was chair of APRA the regulator had taken action against Macquarie Bank over multiple breaches over prudential and reporting standards with some of those actions including additional capital requirements are still in effect.

The senator suggested that Byers would be “privy to confidential information about the action which Macquarie could find useful know”.

Lonsdale agreed that Byers, as the chair of APRA, would have had access to information but questioned whether that was “direct supervisory information” would be something different.

“Would that information be useful for Macquarie Bank to know?” Senator Sheldon asked.

Lonsdale said that if Senator Sheldon was asking whether Mr Byers knew what best prudential practice looked like, then, yes, he would know.

Lonsdale said that APRA looked very carefully at conflicts and if it saw a conflict after a member had left or joined a regulated entity very soon after leaving “it would be open to us to write to that entity and to the member to remind them of our conflict policy and the protection of information”.

He said that when a member or employee left APRA they remained covered by Section 56 of the secrecy provisions.