It originated from the days of naval sailing squadrons and can trace its origins to the Royal Navy. Each naval squadron would be assigned an admiral as its head, who would command from the centre vessel and direct the activities of the squadron. The admiral would in turn be assisted by a vice admiral, who commanded the lead ships which would bear the brunt of a naval battle. In the rear of the naval squadron, a third admiral would command the remaining ships and, as this section of the squadron was considered to be in the least danger, the admiral in command of the rear would typically be the most junior of the squadron admirals. This has survived into the modern age, with the rank of rear admiral the most-junior of the admiralty ranks of many navies.
Since the mid-1990s, the insignia of a Royal Australian Navy rear admiral is the Crown of St. Edward above a crossed sword and baton, above two silver stars, above the word "Australia". Like the Royal Navy version, the sword is a traditional naval cutlass. The stars have eight points, unlike the four pointed Order of the Bath stars used by the army (which are often referred to as "pips"). Prior to 1995, the RAN shoulder board was identical to the Royal Navy shoulder board. The Royal Navy shoulder board changed again in 2001 and the Australian and UK shoulder boards are now identical except for the word "Australia".