Progress Report on the Review of the Reserve Bank of AustraliaAn RBA Fit for the Future

Foreword

On behalf of the Governance Board, I am pleased to present this report on our progress in implementing the 51 recommendations of the independent Review of the Reserve Bank of Australia (Review). This report marks a significant milestone in the multi-year transformation we began in 2023.

Our transformation agenda – shaped by the findings of the Review and the independent assessment of the October 2022 RITS outage (Deloitte Review) – is designed to strengthen the foundations of how we operate. It supports our mandate to promote the economic prosperity and welfare of the Australian people, and reflects our ambition to become a more open and dynamic central bank, trusted for our analysis, policy and service delivery.

We welcomed the Review and its findings, and we are committed to meaningful change. The Review recognised the RBA’s longstanding contribution to Australia’s economic success and the professionalism of our staff, while identifying areas for improvement. It focused on key areas – monetary policy, governance, transparency and culture – that are central to our effectiveness as Australia’s central bank. Strengthening these areas enhances our ability to deliver across the full breadth of our responsibilities, including supporting the payments system, providing banking services to the Australian Government, issuing banknotes and contributing to financial stability.

In March 2025, the most significant reforms to the RBA since the 1990s came into effect. These changes introduced a new governance structure, with three boards now overseeing our work: the Governance Board, the Monetary Policy Board and the Payments System Board. This structure has sharpened our focus, strengthened decision-making and improved accountability, supporting our commitment to modernising the RBA.

Given the breadth of our mandate, our transformation agenda is necessarily complex. It reaches into every part of the RBA, from how we make policy decisions to how we run critical infrastructure to serve the Australian public. We have made substantial progress. We are more open and inclusive of diverse perspectives which challenge our decisions and processes. But there is more to do. Embedding lasting change requires sustained focus and dedication.

Importantly, throughout this period of change, we have maintained a sustained focus on delivering on our objectives, while laying the groundwork for a stronger RBA.

Our work does not end with the implementation of specific recommendations. In the spirit of the Review, we are embracing a mindset of continuous improvement – recognising that the environment in which we operate is dynamic and that our institutional practices must continue to evolve. We remain committed to pursuing excellence in everything we do as we build an RBA that is fit for the future.

This report outlines our progress against the Review’s recommendations and highlights the steps we are taking to build new capabilities, strengthen our culture and improve the way we work. It reaffirms our commitment to continuous improvement and to serving the Australian public with transparency, rigour and purpose.

The Governance Board joins me in thanking our staff for their dedication and professionalism in responding to the Review. Their efforts are helping to build a stronger, more resilient RBA ready to meet the challenges of a dynamic economy and deliver on our responsibilities with confidence.

Michele Bullock
Governor and Chair of the Governance Board
15 December 2025

1. Overview

The Review

The Treasurer, The Hon Jim Chalmers MP, commissioned the Review in July 2022, led by a panel of three experts from Australia and overseas. The Review and the Government’s response to the recommendations were released in April 2023.¹

The Review aimed to ensure that Australia’s monetary policy arrangements and the operations of the RBA continue to support strong macroeconomic outcomes in an increasingly complex and evolving environment. It made 51 recommendations under 14 broad headings, grouped into five themes:²

• a clearer monetary policy framework, with clear objectives and tools, and a well-defined financial stability role
• stronger monetary policy decision-making and accountability, including establishing an expert Monetary Policy Board supported by better processes and greater transparency and accountability around decisions
• an open and dynamic RBA, with a more agile and empowering culture and more open and constructive debate
• more robust corporate governance, including establishing a new Governance Board to support and oversee management
• steps to ensure RBA leaders drive institutional and cultural change.

Of the 51 recommendations, 24 were directed to the RBA, 17 to the Government and 10 involved joint action.

The Government implemented several key recommendations through amendments to the Reserve Bank Act 1959, which took effect on 1 March 2025. These reforms clarified the RBA’s overarching objective and the specific objectives of monetary policy, confirmed the RBA’s role in contributing to financial system stability and established a new governance structure.

Other recommendations have been addressed administratively by the RBA and the Government, including through updates to the Statement on the Conduct of Monetary Policy.³ Several have been addressed by the Council of Financial Regulators, of which the Governor of the RBA is Chair.

Our response and progress

We welcomed the Review and are committed to achieving its broad intent. The Review endorsed several initiatives that were already under way and provided a framework for broader transformation. Together with the recommendations from the Deloitte Review,⁴ the Review has shaped our current Corporate Plan.

We have made substantial progress. To support a disciplined, comprehensive and coordinated response, we developed a structured program of work aligned with the Review’s findings and the Government’s response. To date, the RBA and the Government have addressed 41 of the 51 recommendations.⁵ Many of the changes we have made are to support continuous improvement.

Clear implementation plans are in place for the remaining recommendations, and work is well under way. We expect to implement two further recommendations in 2026: publication of a framework for additional monetary policy tools and convening of an external expert advisory group on monetary policy. The remaining recommendations are ongoing commitments, where we have established the structures, processes and capabilities needed to sustain progress in these areas. They include initiatives to strengthen leadership, embed cultural change, enhance analytical expertise and deepen our understanding of monetary and fiscal policy interactions. We have also committed to conducting future reviews of the monetary policy framework and our institutional capability.

Our response reflects a long-term commitment to strengthening the RBA, by implementing the Review recommendations and establishing a foundation for ongoing improvement.

Key reforms

Part 2 of this report outlines the key changes to the RBA’s monetary policy decision-making, governance, transparency and culture that we have made in response to the Review, and the expected impact of these reforms. These changes include:

• clarifying the RBA’s monetary policy objectives and financial stability role through legislative amendments and updates to the Statement on the Conduct of Monetary Policy
• introducing new internal processes to support monetary policy formulation, including less frequent but longer Monetary Policy Board meetings, refreshed advisory structures, deeper engagement between Board members and staff, and ongoing work to improve forecasting and modelling to deal with the increasingly complex environment
• enhancing the integration of research in the monetary policy process by strengthening internal capability and deepening engagement with academia and think tanks, to foster diverse perspectives and support our policy framework
• strengthening decision-making, transparency, corporate oversight and risk governance through the establishment of the new Governance Board and Monetary Policy Board
• improving frameworks for cooperation with other financial regulators in promoting financial stability
• advancing a more open and dynamic culture, supported by refreshed leadership expectations and development initiatives to support the achievement of these expectations
• increasing transparency and public engagement through a new dedicated Communications Department and expanded outreach to media and stakeholders
• creating a Chief Operating Officer (COO) role to help drive enterprise-wide change that strengthens the RBA’s management, culture and operations.

A number of other changes support our implementation of the Review recommendations and response to the Deloitte Review. These include significant steps to strengthen our risk and compliance management framework by enhancing our ‘three lines of accountability’ model, improving risk governance structures and processes, and strengthening the ‘voice of risk’ for independent review and challenge.

While we have made good progress towards strengthening the RBA and the way it operates, many of the recommendations involve adopting a process of continuous improvement to embed the desired change and deliver on longer term commitments.

Structure of this report

Part 2 of this report provides an update on our progress against the Review recommendations across its five themes, and outlines the early effects of these reforms and the ways they are expected to strengthen our monetary policy decision-making, governance, transparency and culture. Part 3 explains our approach to implementation. Part 4 outlines our future priorities. The appendices provide a summary table that maps the Review’s 51 recommendations to the broader themes discussed in this report and a glossary of terms.

2. Our Progress

The Review found that Australia’s monetary policy and financial stability frameworks have served Australia well in recent decades. The Review determined that flexible inflation targeting remained the best operational framework for monetary policy and was well established and understood. It recommended that the RBA’s longstanding additional mandate for full employment be made clearer, with the flexibility inherent in the inflation targeting framework available to balance the two objectives as required.

The Review identified some areas where the monetary policy framework could be improved, to better respond to the increasingly complex economic and financial environment. The Review recommended several changes to:

• clarify the RBA’s monetary policy objectives, toolkit, how we operate the framework and how monetary policy interacts with other branches of macroeconomic policy
• put the RBA’s financial stability role on a firmer footing and strengthen cooperation arrangements with other agencies involved in financial stability.

The Review also emphasised the importance of retaining the RBA’s operational independence in setting monetary policy.

2.1.1 Our monetary policy objectives and framework

The Government implemented most of the Review’s recommendations to clarify the RBA’s statutory objectives for monetary policy through amendments to the Reserve Bank Act. These amendments:

• establish that ‘promoting the economic welfare and prosperity of the people of Australia both now and into the future’ is the overarching purpose of all of the RBA’s activities and not a specific third objective for monetary policy
• clarify the definition of our longstanding dual objectives for monetary policy to be ‘price stability’ and ‘the maintenance of full employment’.⁶

Alongside these legislative changes, the Review recommended updates to the Statement on the Conduct of Monetary Policy to better explain how the RBA uses its operational framework to pursue its monetary policy objectives. The Treasurer and the former Reserve Bank Board agreed on updates to the statement in December 2023 to implement these recommendations (which were subsequently affirmed in July 2025 by agreement between the Treasurer and the Monetary Policy Board). These updates included:

• more clearly defining the inflation target, including clarifying that the Board sets monetary policy so that inflation is expected to return to the midpoint of the 2–3 per cent target range
• affirming and clarifying the Board’s focus on achieving sustained full employment, which is the current maximum level of employment that is consistent with low and stable inflation
• clarifying that the Board should determine how to balance its inflation and employment objectives when that is required, and that if inflation is expected to be significantly away from the midpoint of its target or labour market conditions are expected to deviate significantly from those consistent with full employment, the Board will communicate how long it expects it will be before it again meets each of its objectives and why
• committing to publish a framework for the use of monetary policy tools other than the cash rate.⁷

The updated Statement on the Conduct of Monetary Policy also reaffirmed the Government’s support for the RBA’s operational independence.

The impact of these changes, together with the other changes to our policy framework, are addressed in Part 2.1.6.

Looking to the future, the Review recommended that the RBA and the Government institute regular reviews of the monetary policy framework and tools to ensure they remain fit for purpose. We have agreed with the Australian Treasury to undertake a joint review every five years, commencing in 2030.

2.1.2 Our financial stability role

Although the RBA has long been recognised as having responsibilities for financial stability, prior to the Review this role was not defined clearly in legislation. In line with the Review’s recommendation, amendments to the Reserve Bank Act have established a clear statutory basis for our financial stability role.⁸ The Statement on the Conduct of Monetary Policy complements this change by setting out the various ways in which the RBA contributes to financial system stability.⁹

The Review emphasised the importance of strong cooperation among financial regulators to safeguard financial stability. This is primarily facilitated through the Council of Financial Regulators (CFR), which is chaired by the RBA Governor and also includes the Australian Prudential Regulation Authority (APRA), the Australian Securities and Investments Commission (ASIC) and the Australian Treasury.

While recognising that cooperation between Australia’s financial regulators had been effective in mitigating financial stability risks, the Review identified opportunities to formalise and clarify the outcomes the CFR seeks to achieve and the mechanisms for delivering a whole-of-system response.

In response to the Review’s recommendations, the CFR and its member agencies have taken several steps to strengthen cooperation arrangements:

• The CFR updated its charter in July 2025, including to articulate more clearly the outcomes the CFR aims to achieve and the respective roles of member agencies regarding financial stability.¹⁰
• The CFR updated its Memorandum of Understanding (MOU) on Crisis Management, which sets out a framework for coordination across agencies during periods of potential or actual financial instability.¹¹
• The RBA established a more structured framework and process through which it provides financial stability advice to the CFR and APRA. The RBA has committed to update the CFR regularly on financial system risks and vulnerabilities, including (where material) the potential impact of monetary policy on financial stability (and vice versa).¹²
• The RBA updated its MOU with APRA in July 2025 to ensure clear and specific commitments to cooperate in promoting financial stability. The updated MOU reflects APRA’s commitment to update the CFR on macroprudential policy at least annually, supported by advice from the RBA on financial stability considerations. To reinforce transparency and accountability, the substance of this advice will be published as part of the release of Monetary Policy Board papers after seven years.¹³

2.1.3 Interaction with fiscal policy

The Review observed that the objectives and effects of monetary and fiscal policy overlap and recommended ways to strengthen understanding of the potential linkages. In response, we have been:

• formalising and building on existing regular staff-level and senior discussions between the RBA and the Treasury
• sharing relevant analysis and longer term work plans, and deepening external engagement through collaboration with academics, policy researchers and think tanks (including via the 2025 RBA–Treasury joint conference and a new external research engagement strategy).

2.1.4 Formalising the monetary policy toolkit

The Review concluded that the framework for monetary policy in Australia would be enhanced by having a clearly articulated framework for how additional monetary policy tools might be used in the future. Such a framework will bolster the RBA’s readiness for conducting monetary policy if interest rates again fall to very low levels and provide transparency on the Monetary Policy Board’s intended approach.

Our work to develop a formal framework for additional monetary policy tools is well under way and is expected to be communicated publicly in 2026. It draws on past research, insights from peer central banks and external expertise. The framework will have three key elements:

• a set of core policy principles centred on the benefits, costs and financial and non-financial risks of different tools, thereby guiding their design, deployment and exit strategies
• a decision-making approach outlining governance arrangements and the processes and analysis that the Board should expect when considering whether to deploy additional tools and how to manage their life cycle, including their exit
• an assessment of how the principles apply to each tool and situations in which certain tools might be used, including in combination.

This work is being undertaken in two phases: the development of a principles-based framework, to be published in 2026, leveraging existing evidence and experience with additional monetary policy tools; followed by a focus on ongoing research and operational readiness for preferred tools.

2.1.5 Policy readiness to respond to climate change

Climate change and the transition to lower emissions will impact how we discharge our responsibilities for price stability, maintaining full employment and contributing to the stability of the financial system. The Review concluded that monetary policy is not an appropriate tool to address climate risk directly, but recommended that we continue to build our capability to assess the implications of climate change and the transition. To do that, we have:

• created new climate and energy specialist roles to build modelling and analytical capability
• deepened our ties with the expert community – through external expert presentations and engagement, including via the RBA–Treasury climate economics seminar series
• started to incorporate the climate transition into our analysis of the economy and financial markets (including our structural and macroeconomic models) and financial stability assessments.

Consistent with the Review’s recommendation that the RBA continue contributing to the effective regulation of banking and finance in relation to climate risk as a member of the CFR, we have:

• supported the APRA-led insurance climate vulnerability assessment, including by providing advice on the development of macroeconomic scenarios
• overseen governance arrangements for the initial development phase of the Australian sustainable finance taxonomy, launched in June 2025.

2.1.6 The benefits of a clearer monetary policy framework

The changes to the monetary policy framework provide greater clarity, promote transparency and foster accountability.

The full benefits of this will become apparent over time – but the greater clarity around the objectives of policy have already sharpened the Monetary Policy Board’s discussions and supported more effective communication. The forthcoming framework for additional tools will enhance the rigour of decision-making and facilitate external accountability in any future crisis periods, supported by a broad-based assessment of the merits and the risks associated with various tools.

The reforms have strengthened and formalised the foundations for the RBA’s financial stability role, improved transparency around how monetary policy decisions interact with financial stability risks, and supported more structured coordination across the regulatory framework.

The Review proposed substantial reforms to the governance arrangements and processes supporting monetary policy decision-making, including the creation of a new Monetary Policy Board. In response, we have implemented changes that are designed to improve the quality of decision-making, reinforce transparency and accountability, and engage more effectively with the Australian public about our monetary policy decisions and actions.

2.2.1 Our new Monetary Policy Board

Establishment of the Monetary Policy Board

The Monetary Policy Board was established on 1 March 2025 as part of the Government’s legislative response to the Review. It is responsible for determining monetary policy and the RBA’s policies for contributing to financial system stability (excluding payments system policy).¹⁴

Consistent with the Review recommendations, the Board comprises the Governor (Chair), Deputy Governor (Deputy Chair), Secretary to the Treasury¹⁵ and six external members. External Monetary Policy Board members were appointed by the Treasurer through a public expression of interest process, guided by a skills matrix and overseen by a panel comprising the Secretary to the Treasury, the Governor and an independent third party, with staggered appointment terms to support continuity.¹⁶

As noted in Part 2.4.1, the Board has adopted a charter outlining its responsibilities and an MOU with the Governance Board, Payments System Board and executive to clarify their respective roles.

Monetary policy transparency and accountability

We have implemented a range of measures recommended by the Review that are designed to strengthen public understanding of monetary policy decisions and support accountability, including:

• the Governor holding a media conference after each Monetary Policy Board meeting to explain the policy decision and the Board’s views about current economic and financial conditions to the Australian public and our stakeholders
• issuing post-meeting media statements from the Monetary Policy Board, rather than the Governor, and including an unattributed record of votes
• publishing more detail about the Monetary Policy Board’s policy deliberations in the meeting minutes and committing to publishing Board papers after seven years
• refreshing and improving our quarterly Statement on Monetary Policy to include more detailed forecasts, assumptions and key judgements informing policy decisions,¹⁷ and publishing insights from our liaison program and content to explain how the RBA assesses full employment and potential output
• external Monetary Policy Board members committing to conduct at least one public engagement annually¹⁸
• establishing a new Communications Department and embedding a revised communications approach into the monetary policy process.

These changes help external observers to assess the RBA’s considerations, outlook and policy choices more easily. Our efforts to communicate more plainly and more often have enabled information on the outlook for monetary policy to be accessible to a broader range of Australians. This has, in turn, helped foster informed debate and continuous improvement. All of this helps to build trust in the transparency and integrity of our policy framework, which is foundational for good monetary policy and critical for our continued effectiveness as a public institution. The reforms will also help strengthen the connection between monetary policy and the Australian people by increasing opportunities for the RBA and the Monetary Policy Board to hear a range of voices about how monetary policy affects the community.

In line with the Review’s recommendation, we have also bolstered the accountability of the RBA’s boards by updating their conflicts of interest policies to tighten restrictions on the financial transactions of members and their associated entities.¹⁹

2.2.2 Monetary policy decision-making, strategy and research

The Review emphasised the importance of providing the Monetary Policy Board with the necessary information and sufficient time and support for it to deliberate and reflect on decisions effectively, especially as the policy environment becomes more complex. The Review recommended changes to support decision-making, deepen our forecasting and modelling capability and strengthen the role of research in policy formulation.

Supporting monetary policy decision-making

To address the Review’s recommendations regarding better support for decision-making, we have:

• instituted fewer but longer Monetary Policy Board meetings to support deeper deliberation and more substantive briefing
• enhanced the briefing materials to include scenarios analysing alternative economic pathways, consideration of monetary policy strategy and alternative monetary policy paths
• added a summary of large-group staff discussions about economic and financial conditions and monetary policy alternatives to the briefing materials and summaries of RBA staff roundtable discussions with academics and market economists
• increased opportunities for engagement between Board members and staff at various levels, including meetings before each Board meeting at which subject matter experts cover topics relevant for monetary policy
• made preparations to convene an external expert advisory group – comprised of private sector economists and academics – from mid-2026, to provide Board members directly with external views and insights on policy-relevant issues.

These enhancements have been led by a wide range of RBA staff, including the newly established Monetary Policy Strategy Department. This new department works with other RBA policy departments to deliver to the Monetary Policy Board advice that considers current decisions as part of a longer term strategy to improve policy outcomes. This work includes developing briefing materials for the Monetary Policy Board that consider the costs, benefits and risks of alternative monetary policy decisions and strategies.

In collaboration with other policy departments, the new department will also undertake in-depth analysis to support the Monetary Policy Board in formulating its strategy. This includes evaluating trade-offs, exploring interactions with other policy instruments, and identifying the most effective policy responses under various outlooks, scenarios and risks. To broaden staff engagement in the development of monetary policy strategy, the department integrates diverse perspectives from across the RBA on current issues and medium-term priorities. It promotes cross-departmental collaboration and draws on external thinking and research.

Building our forecasting and modelling capability and making greater use of new datasets

Monetary policy decisions affect the economy in the future. The Review emphasised the importance of decisions being supported by strong forecasting and modelling capability and a wide range of information including new types of data.

We have a substantial work program ahead of us to increase these capabilities. This program is the first part of our broader effort to strengthen and reinforce the role of analysis and research in informing monetary policy. We expect to complete the initial uplift in capability by mid-2027. The work program comprises three main parts:

• upgrading our core macroeconomic modelling suite, which includes further development of the RBA’s semi-structural macroeconomic model (MARTIN) to support forecasting, broadening the suite of models used to estimate key unobservable variables central to macroeconomic theory, and developing and enhancing structural macroeconomic models to capture the policy implications of structural change and supply-side shocks more effectively²⁰
• improving our forecast, data and analytical infrastructure to increase the robustness of our forecast process, make it easier to access and analyse forecast data and facilitate more effective use of macroeconomic models to support the forecasts
• making more use of new datasets and data science tools and frameworks. We have acquired new datasets and are working with partners further to develop relevant existing administrative micro datasets. We are also building the capability to apply new data science techniques to our datasets, for example, qualitative information from our liaison program. Our capability in this area will continue to deepen and evolve as our IT infrastructure adapts to support more advanced analytical methods.

Early outputs from this work have already helped strengthen support for policymaking – for example, through more thorough consideration of what constitutes full employment and broader use of alternative scenarios and policy options. Data science techniques have also helped us to summarise the experiences of different firms when assessing economic conditions. Building these capabilities will be an ongoing commitment.

Strengthening the role of research

The Review observed that we had not made full use of the capabilities of our staff, particularly their technical and research expertise. It recommended that we do more to strengthen the role of research within the RBA, and to enrich the quality of advice we provide to the Monetary Policy Board.

In response, we are:

• focusing on translating research into policy-relevant insights, building on the improvements to modelling and data capabilities discussed above and an uplift in internal expertise
• developing a research agenda of longer term research priorities to support the Monetary Policy Board
• increasing collaboration across the RBA through discussions of research priorities, and the creation of a cross-departmental modelling advisory group to improve prioritisation and capability investment
• improving external engagement by deepening ties with academia, think-tanks and other central banks to bring fresh perspectives and specialised expertise to our work
• investing in skills by hiring from international PhD markets and exploring technical career pathways to support long-term capability building.

Over time, a sustained investment in research capabilities and external engagement will help to embed a strong research culture and ground decision-making in robust frameworks that adapt to the evolving policy environment.

The Review highlighted the importance of culture and leadership in shaping performance. Recognising the RBA’s high-calibre staff, collegiate environment and prior efforts to strengthen our culture, it recommended further steps to build on this work. These recommendations focused on fostering constructive challenge and openness to diverse views, strengthening leadership capability and empowering staff – including by ensuring decisions are made at the right level and building confidence in managing risk.²¹

The Review recommended the creation of a COO role to drive enterprise-wide improvements in these areas. It also emphasised the need for all RBA leaders to drive and model cultural change.

In response to the Review’s recommendations, we launched a multi-year program to build a more ‘open and dynamic’ workplace culture at the RBA. Together with the risk transformation initiatives under way that support both our response to the Review and the Deloitte Review, our culture program aims to strengthen our ability to challenge, ask questions and proactively seek improvements.

2.3.1 Our open and dynamic culture ambition

Diversity of people, thought and ways of working

We have implemented several initiatives to help build a more open culture at the RBA, where leaders welcome constructive challenge and diverse viewpoints both internally and externally. Key initiatives include:

• defining the key behaviours underpinning our culture ambition – ‘inspire trust’, ‘open minds’ and ‘work dynamically’ – and focusing on embedding them into everyday practice, including through an enterprise-wide culture immersion program
• enhancing our Inclusion, Diversity and Belonging strategy, including by setting employment targets for culturally and linguistically diverse (CALD) groups in addition to our targets for employment of women and First Nations people
• establishing an employee listening strategy to enhance our understanding of staff sentiment and inform our approach to creating an environment where people feel safe to speak up
• enhancing our onboarding program to better support new staff, with a focus on ‘starting strong’, connection to purpose and cross-department collaboration.

We have onboarded many new colleagues to the RBA since the Review was released. They have brought fresh ideas, new ways of working and strengthened diversity of thought across the RBA – complementing our existing deep institutional knowledge and expertise. This includes the appointment of several senior leaders from outside the RBA, including the current Deputy Governor, Assistant Governor (Economic) and several other department heads, deputy heads and senior managers.

We are assessing our progress towards building an open and dynamic culture – both organisationally and individually – through surveying staff more often and by incorporating behaviour expectations into performance processes and goal setting. While cultural change takes time, early signs are encouraging. Our most recent engagement survey showed strong support for our cultural aspiration and an increase in the proportion of our people who agree that differing opinions are openly discussed at the RBA before decisions are made. However, more work is needed to help ensure all our people feel ‘safe to speak up’ and that decisions are made at the appropriate level.

We recognise that cultural change is a long-term goal, requiring a coordinated effort over an extended period. We remain focused on building empowerment, accountability and safety to speak up as we progress our multi-year program. We will continue to seek feedback from our people to help shape priorities and guide future actions.

Strengthening leadership and leading change

The Review recommended several actions to strengthen leadership capability at the RBA. High-quality leadership is essential to shaping our culture, supporting staff performance and driving organisational outcomes. In response, we have developed a comprehensive leadership framework that will apply to all people across the RBA. The framework includes:

• clear, consistent and action-oriented leadership expectations for our people, aligned to our culture ambition. These expectations were launched in August 2025 and include a clear mandate to lead people through change
• a new leadership development program that connects our purpose, leadership expectations and culture ambition across all leadership levels
• 360-degree feedback and coaching for senior managers and above, with 110 leaders having participated in this program to date
• regular leadership off-site meetings for our executive leaders to discuss and align on strategic priorities, with a focus on culture and leadership.

To support these initiatives and strengthen empowerment for our people, we have also initiated work on a revised delegations and accountabilities framework to ensure decision-making occurs at the right level.

We will continue to invest in our leaders, focusing on building the capability to lead the cultural transformation. We expect the impact of the leadership framework to build over time.

Source: RBA.

2.3.2 An enterprise approach and continuous improvement

Driving an enterprise approach to how we work

To further support our culture transformation and improve organisational effectiveness, we have taken several steps to drive an enterprise-wide approach to our ways of working at the RBA, including:

• establishing a COO role to look across the RBA and, together with the Deputy Governor, support coordination between policy, operational and organisational decision-making. In line with the Review’s recommendations, this role includes a focus on driving enterprise-wide improvements in leadership, culture and ways of working
• developing an enterprise strategic planning and continuous improvement capability, including an enterprise prioritisation framework to allocate and sequence work more effectively and ensure we are working on the right things at the right time.

We intend to supplement these initiatives with a new workforce planning strategy. This will strengthen our ability to identify future workforce needs, build the skills required to meet them, and align resources with strategic priorities.

Ongoing capability reviews

To reinforce our accountability for delivering on our transformation agenda and leading change at the RBA, we will participate in five-yearly Australian Public Service (APS) capability reviews from 2032.

2.4.1 Our new Governance Board

Our new Governance Board was established on 1 March 2025, following the amendments to the Reserve Bank Act passed in late 2024.²²

As recommended by the Review, the Governance Board is responsible for overseeing the organisational affairs of the RBA. The Governor chairs the Board and continues to manage the RBA, while the Board has formally assumed the role of accountable authority under the Public Governance, Performance and Accountability Act 2013. The composition of the Board was expanded compared with the Review’s recommendation, to include the Deputy Governor and a sixth external member, and the Governor was appointed Chair for at least the first five years.²³ In line with the Review recommendation, external members were appointed by the Treasurer following a public expression of interest process, guided by a skills matrix and overseen by a panel comprising the Secretary to the Treasury, the Governor and an independent third party.²⁴ Appointment terms were staggered to support continuity.

As accountable authority, the Board is responsible for (among other things) establishing frameworks and policies for systems of risk oversight and risk management at the RBA. In line with the Review’s recommendation, the RBA’s former Audit Committee was replaced by an Audit and Risk Committee, which is a subcommittee of the Governance Board. Among other things, the Committee supports the Board in fulfilling its risk oversight responsibilities.²⁵

2.4.2 Strengthening the RBA’s corporate governance

The establishment of the Governance Board strengthens the RBA’s corporate governance by:

• bringing external perspectives and challenge to executive decision-making, through a structure that is consistent with contemporary governance standards
• enhancing oversight of enterprise strategy and organisational priorities
• clarifying our risk governance model and supporting stronger oversight of risk management at the RBA, including embedding the ‘three lines of accountability’ model
• enabling the Monetary Policy Board to focus on matters relating to monetary and financial stability policy – a key aim of establishing the new structure.²⁶

We are already beginning to see these benefits. To date, the Governance Board has supported our executives by providing broader perspectives and constructive challenge on several key strategic and operational issues. These include: reviewing the approach to the renovation of our head office building to help ensure it uses public resources wisely and supports our long-term needs; supporting efforts to strengthen operational resilience and cyber security protections in an efficient way; and overseeing our work to strengthen processes and culture of the RBA, including clarifying organisational priorities and expectations. The Audit and Risk Committee has, among other things, provided enhanced oversight of our risk transformation initiatives, including by reviewing and guiding plans to mitigate key risks.

The dynamic between senior leaders, staff and the Governance Board has been respectful and constructive with mutually held high-performance expectations for the RBA. Senior leaders and staff have responded to the Board with transparency and accountability.

An important consideration in the Review was ensuring the Governance Board and Monetary Policy Board complemented each other without creating friction. In support of this, the Governance Board, Monetary Policy Board, Payments System Board and executive established an MOU. This MOU supports alignment on their key responsibilities and how the boards will work together to advance the RBA’s overarching objective of promoting the economic welfare and prosperity of the Australian people. Each board also established charters that set out their responsibilities.²⁷ These arrangements reinforce collaboration across the RBA’s boards and ensure clarity in decision-making and accountability.

We are continuing to embed the new governance arrangements, with a focus on ensuring the framework strengthens strategic alignment, supports effective decision-making and improves overall performance.

3. Our Implementation Approach

Following the release of the Review, we established a dedicated project department to lead our response, supported by the RBA’s Executive Committee, other governance forums comprised of Executive Committee members and other senior leaders. Since its establishment in March 2025, the Governance Board has overseen the RBA’s transformation agenda, including our response to the Review.

The Review made several recommendations about the approach to implementation. Consequently, we developed an implementation roadmap prioritising key reforms that could be progressed ahead of legislative change. The roadmap adopted a staged approach to safeguard continuity of core functions while advancing priority actions. These included early steps to strengthen monetary policy decision-making and transparency, the establishment of a standalone Communications Department and COO role, and updates to the Statement on the Conduct of Monetary Policy. Work on our organisational culture was also initiated, preceding the launch of our open and dynamic culture ambition in mid-2024. These initiatives laid the groundwork for broader transformation efforts now under way. Our implementation roadmap has evolved over time and continues to guide our transformation agenda.

The Government addressed four of the recommendations relating to implementation through its legislative response to the Review and the process for appointments to the RBA boards.²⁸

4. Our Future Focus and Priorities

Our approach to our transformation agenda continues to be guided by a clear ambition: to build an open and dynamic central bank that is trusted for the quality of our analysis, policy and service delivery. We remain focused on strengthening leadership, enhancing governance and fostering a culture that supports open and dynamic ways of working.

While we have made substantial progress, our transformation is ongoing. Key areas of continued focus include embedding cultural change, deepening leadership capability, strengthening monetary policy frameworks, building capacity and capability (including technical expertise), and advancing risk transformation initiatives. These areas require sustained effort and investment. The scale, complexity and interdependency of the work involved in our transformation agenda amplifies the risks we face in our day-to-day operations, reinforcing the importance of continued investment in strengthening our risk and compliance management framework.

Our change initiatives are being actively advanced through targeted programs designed to embed lasting change and will remain a priority in the years ahead.

The progress outlined in this report reflects the collective commitment across the RBA to deliver meaningful change. This commitment is reflected in the actions we have taken to implement the Review’s recommendations and in our broader efforts to strengthen the RBA for the future.

We remain focused on maintaining public confidence and trust in the RBA’s role and operations, and on ensuring we are well positioned to meet future challenges.

Appendix 1: Review Recommendations

The following summary table maps the Review’s individual recommendations to the broader themes discussed in this report. Recommendations have been addressed either by the RBA, the Government or jointly.

Appendix 2: Glossary of Terms