Most media focus has been on the composition and nature of the proposed monetary policy board, which is natural given the effect board decisions have on the public. However, the broader debate overlooks the critical importance of the proposed governance board.
Just fifteen months after handing the review to the Treasurer, a new risk has emerged around AI technology. The recommendation for establishing the governance board is critical because the operations of the RBA are becoming more complex. One reason for our recommendation was concern about large risks coming from technology, such as cybersecurity. In the past decade, the number of IT staff employed by the RBA has almost doubled, reflecting technology’s role in the Australian financial system.
Practicalities on how the two new boards should be populated are addressed in the review. The recommendations are to ensure continuity of decision-making on both boards by asking current board members to continue their term on one of the new boards and for the government to consult with the shadow treasurer to ensure broad bipartisan support for the new arrangements. Current board members are probably best placed to decide on which board they can best contribute.