BEARing Responsibility for Cyber Security in Australian Financial Institutions: The Rising Tide of Directors’ Personal Liability

Journal of Banking and Finance Law and Practice, Vol 30, Iss 1, 2019: 20-42

35 Pages Posted: 2 Jan 2019 Last revised: 13 May 2019

See all articles by Kayleen Manwaring

Kayleen Manwaring

UNSW Sydney

Pamela F Hanrahan

UNSW Business School; University of Melbourne - Law School

Date Written: December 17, 2018

Abstract

The Banking Executive Accountability Regime was enacted in February 2018; a month later the Australian Prudential Regulation Authority released a consultation draft of its new Prudential Standard CPS 234 on information security. It requires that an APRA-regulated entity ‘clearly define the information-security related roles and responsibilities of the Board and of senior management, governing bodies and individuals’. This article considers the implications of these related developments for individual directors of financial institutions that experience cyber security breaches related to customer data, systems or infrastructure. It concludes that these developments set a hard floor under community and regulator expectations of directors’ role in ensuring that adequate cyber security measures are adopted, that flows through to the standard of care required of them.

Keywords: Cyber Security, Cybersecurity, Directors' Duties, Banking, BEAR

Suggested Citation

Manwaring, Kayleen and Hanrahan, Pamela F, BEARing Responsibility for Cyber Security in Australian Financial Institutions: The Rising Tide of Directors’ Personal Liability (December 17, 2018). Journal of Banking and Finance Law and Practice, Vol 30, Iss 1, 2019: 20-42, Available at SSRN: https://ssrn.com/abstract=3284289

Pamela F Hanrahan

UNSW Business School ( email )

UNSW Business School
High St
Sydney, NSW 2052
Australia

University of Melbourne - Law School ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia

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