Mr. Gerry Cross:

I will have the first go at answering the Senator's questions and Ms Cunningham may want to come in on some specific aspects. The Senator asked about the role of individuals and the possibility they could wriggle out, empty out the senior function and get their people out of the picture. It is an important question and comes back to an answer I gave earlier. In our discussions with the Department of Finance on this issue, we have tried to design this legislation in a way that learns from the experience of others and whereby it is really about substance. People should not be able to say they are not on the hook because allegations of wrongdoing do not apply to the title of the role they carry out. It should be the case that the substance of the role goes with the responsibility for the role. There is also the other context of the allocation of responsibility. As I said earlier, the way the Bill is designed means it should not be possible for someone to decide they will make the decisions but will not assign themselves the relevant role and, therefore, get around the legislation. Ms Cunningham can speak to this better than me.

The issue goes back to some of our earlier discussions about the participation link. The essence of it is that individuals understand their responsibilities and know what is expected of them, and that we hold them to account, as individuals. That is the heart of the matter. If the regime was not hitting that target, it would be a big miss. It is about individuals. It should not allow a company to claim an investigation did not show that the firm broke a regulation and it is therefore off the hook, nor should it allow a company to assert that because it has now left the business or the financial services sector, it is off the hook. It is about trying to close those escape routes.

I agree with the Senator that this should not be about nice language with references to improving standards. This is about improving the way financial services are done in firms and how they think about their roles and responsibilities as firms and individuals. That is at least partly driven by being on the hook for what they do and what they fail to do. That has not been the case at all times and that is what this legislation has been designed to address. It is about driving up standards, culture and behaviour. It is about the financial sector fulfilling the role it should have, which is to support the economic well-being of citizens and the economy. That can be done by introducing clarity and expectations, while underpinning the regime with clear accountability.

The Senator also asked about reasonable standards. It comes back again to some of the things we were saying earlier. We need to give sufficient clarity to people so they know what is expected of them but we cannot and should not be telling people they are okay if they tick certain boxes. That is not what this is about. This is about people taking responsibility for their jobs. One could suggest that a firm may be able to create complexity but we will look straight through that. We will ask what is the substance of what is happening here. This is about asking an individual whether reasonable steps were taken to do his or her job and fulfil his or her responsibilities. If we are seeing add-on complexity and obfuscation, how we see the situation will move the other way. It will make us say we do not think an individual was taking reasonable steps. We would suspect that something was going on if individuals should have said that in order for them to do their jobs, unreasonable complexity should be removed. Of course, there are situations where things are complex. It is a complex world and we need to take that into account. The questions raised by the Senator are very important and legitimate. I hope and think this scheme will allow us to deal with those issues because if it did not, it would not be hitting the mark.