FAR Beyond Compliance for Clarity, Confidence and a Competitive Edge

Hall Advisory
6 days ago
5 min read

With FAR now in effect, this article outlines five priorities for leaders to strengthen governance and build lasting accountability.

The Financial Accountability Regime (FAR) is no longer on the horizon, it’s here. For approved deposit-taking institutions (ADIs), insurers and superannuation trustees. Most organisations have completed the initial compliance work. Accountability statements are filed, frameworks are built and responsibilities are mapped.

But that was just the foundation. As FAR moves from implementation to daily application, the focus shifts. It’s no longer about preparing for the start date but about what comes next. Are your accountability arrangements clear, lived and consistent? Do they hold up under pressure or only on paper? For some, this new phase may already be revealing gaps such as unclear expectations around what “reasonable steps” look like.

FAR goes beyond compliance – it’s a chance to reassess and strengthen internal culture and governance frameworks. In this article, we unpack what matters now and actions leaders can take to embed FAR in a way that supports both compliance and high performance.

A FAR refresher: what it requires

The FAR applies to banks and their holding companies, insurers, superannuation trustees and licensed non-operating holding companies (NOHCs). It commenced for banking entities (ADIs and their NOHCs) on 15 March 2024. Insurers (including their licensed NOHCs) and super trustees followed on 15 March 2025.

At its core, FAR is about clear accountability at the top. Its main goal is to improve the risk and governance cultures of applicable entities. The FAR places personal obligations on senior executives and directors (accountable persons) to act with integrity, honesty, and due diligence and to take reasonable steps to prevent adverse outcomes.

FAR requires entities to:

identify and register accountable persons,
ensure accountable persons meet their obligations,
take reasonable steps to manage risk and deliver on responsibilities,
maintain up-to-date accountability statements,
prepare and keep an accountability map, and
notify regulators of key changes or breaches within set timeframes.

The regime is jointly administered by the Australian Prudential Regulation Authority (APRA) and Australian Securities and Investments Commission (ASIC). APRA focuses on prudential matters and financial soundness, while ASIC focuses on conduct and consumer outcomes.

A catalyst for stronger leadership

The FAR requirements provide a strategic opportunity to strengthen leadership and lift performance across the board. When applied with purpose, FAR can bring clarity, direction and alignment. It shines a light on where decisions are made and who owns them. Leaders are also given a reason to pause and ask whether they’re working the way they say they are.

Using FAR to refine existing frameworks can provide clarity to support stronger capability, better collaboration and more confident leadership. Managed well beyond compliance, FAR can help organisations:

Clarify culture and expectations: When accountability is personal and visible, it reinforces the values an organisation stands for. Leaders know what’s expected – and so does everyone else.
Lift the quality of decisions: Clear roles and mapped responsibilities lead to more consistent and transparent decision-making. It becomes easier to act with purpose and avoid duplication or delay.
Strengthen governance and oversight: Defined authority, structured handovers and visible risk ownership reduce confusion. They support faster escalation and better coordination across teams and functions.
Build deeper trust with stakeholders: Investors, regulators and staff want to see that leaders take ownership of their role. FAR gives organisations a chance to show, not just say, that accountability matters.

Here is a summary of how a compliance approach compares to approaching FAR with excellence:

Aspect	Compliance approach	Excellence approach
Culture	Minimal change, tick-box	Values-driven, positive alignment
Decision-making	Defensive, risk-averse	Rigorous, strategic, forward-looking
Operational oversight	Siloed, reactive	Integrated, proactive
Board-management alignment	Formal, transactional	Collaborative, trust-building
Stakeholder confidence	Meets minimum standards	Builds lasting trust and advantage

By reframing FAR as a catalyst for excellence, leaders can turn regulatory demands into a foundation for stronger systems, better conversations and more resilient outcomes.

What leaders need to do now

The initial implementation for FAR may be complete, but applying it in practice is a different kind of work. This next phase is less about ticking boxes and more about how accountability is understood, applied and maintained across the organisation. It calls for active leadership and a clear view of what’s working – and what isn’t.

Here are five areas that deserve attention from leaders now.

#1 Review and update your accountability map

An accountability map isn’t something you finalise once and forget. It should be a live document that evolves as your organisation does. With changes in structure, strategy or roles, your accountability map can quickly go out of date.

Consider embedding a periodic check into your processes to see if responsibilities are still clearly defined and if the right people are listed for the right areas. Even small updates can reduce confusion, improve decisions and support faster escalation when it matters.

#2 Define what “reasonable steps” look like in your context

Many leaders are still uncertain about how much is enough when it comes to documenting actions or managing risk. The answer will differ across organisations, but it helps to give people a clear starting point. Develop practical guidance, share examples and set expectations that make it easier to demonstrate how decisions were made.

For instance, under the Banking Executive Accountability Regime (BEAR), APRA’s 2020 information paper highlighted that scenario testing was an effective way to bring accountability obligations to life and prepare executives for real-world application.

Encourage leaders to record key actions they have taken to prevent adverse outcomes and meet their obligations. This is not for compliance alone, but also to support reflection and accountability over time.

#3 Connect FAR to performance and development

If accountability is treated as separate from how performance is managed, it’s unlikely to influence meaningful behavioural changes.

FAR requires at least 40% of variable remuneration for accountable persons to be deferred for a minimum of four years, if greater than $50,000. Variable remuneration must be reduced for failures to meet accountability obligations.

Consider how your organisation’s expectations under FAR show up in key performance indicators (KPIs), leadership assessments and incentive frameworks. Are people being recognised for ongoing clear ownership and sound judgement, or just short-term outcomes?

Bringing these areas together can help prompt a shift from reactive accountability to an approach that proactively strengthens performance and leadership.

#4 Give your people the support they need

Senior leaders are carrying more personal responsibility, and the pressure can be significant. Rather than relying solely on frameworks and statements, provide the tools and support leaders need to succeed. That might include training, discussion forums or decision-making guides they can refer to in practice.

Supportive environments lead to better decisions. And over time, they help build a culture that values learning and compliance.

#5 Strengthen the connection between boards and executives

Accountability maps and statements can create a useful foundation for more focused discussions. But it’s the conversations that follow that could have the greatest longer term impact. FAR offers an opportunity to revisit how boards and management work together.

Create space for discussions about role clarity, risk decisions and leadership expectations, as part of regular board and executive engagement. Open communication can help build trust, support alignment and improve how decisions are made across the business.

How we can help

As expectations grow and organisations evolve, accountability frameworks need to stay relevant. We work with boards and executive teams to test, refine and strengthen governance and accountability practices for continuous improvement. Our support includes: