One of the issues covered in my recent compliance webinar was the role and liability of Responsible Managers.

Responsible Managers must be appointed by organisations which need to obtain an Australian Financial Services Licence or an Australian Credit Licence.

Apart from having relevant qualifications and experience and being of good character a responsible manager must be directly responsible for significant day-to-day business decisions about the organisation’s ongoing provision of financial services (for AFSLs) or those most directly involved (or who will be involved) in managing the organisation’s credit activities (for credit licenses).

Although a Responsible Manager has obligations under the relevant licence, because of their operational responsibilities their role as Responsible Managers is often not included in their job description and is not separately reported on. It should be.

With the introduction of the Banking Executive Accountability Regime the role of Responsible Manager could be significant.

Additionally as a Responsible Manager the person would most likely be regarded as a company officer under the Corporations Act and be liable to comply with the duties of a company officer.

Responsible managers could be liable to pay a pecuniary penalty or be disqualified from managing corporations depending on the circumstances.

Whether any directors’ and officers’ liability insurance in place for the benefit of directors and officers (including responsible managers) will be effective in the event of a compliance breach will depend on the policy wording.

Watch the Responsible Manager Video Course