A Royal Commission is a public inquiry appointed by the Crown or her representative such as the Governor-General into matters of great importance and, usually, controversy. 


The Commission is created on the recommendation of the government.


In Australia and New Zealand there have been Royal Commissions investigating matters such as child abuse in institutions. At present in Australia there is a Royal Commission looking into misconduct in the Banking, Superannuation and Financial Services Industry.


Governments are usually very careful in framing the terms of reference of the inquiry as once a Royal Commission has started, the government cannot stop it. There is generally a date by which the Commission must finish the inquiry.


Who is appointed as Commissioner?
In Australia the Commissioner is usually a retired judge or someone of similar legal standing.


What powers does the Royal Commission have?
A Royal Commission has broad powers to gather information to assist with its investigations. It has the power to summon witnesses to answer questions under oath or affirmation, or to produce a document or other material piece of evidence. Failure to comply with a summons, or to give misleading evidence is a serious offence.


A Royal Commission can refer information about suspected or alleged crimes to relevant law enforcement authorities or share information with other ongoing inquiries.


Source: Fact Sheet: Powers of  Royal Commission