Westpac CEO and chairman must quit now or be sacked
The fallout from the scandal engulfing Westpac will be monumental and there’s no way back for the bank’s top brass. Heads must roll, and they must roll now, writes Terry McCrann.
Terry McCrann
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The bank regulator, APRA, must now intervene directly in the Westpac crisis by appointing an independent chairman over a totally compromised and paralysed board of directors — unless both the chairman, Lindsay Maxsted and the CEO Brian Hartzer resign overnight.
Both Hartzer and Maxsted should have gone on Thursday, but there’d been no announcement of either by last night.
Maxsted is Prince Andrew-level delusional if he thinks he can still attend Westpac’s AGM on December 12 as a director. He would make Prince Andrew look like the model of self-awareness if he thinks he can attend it as chairman.
Further, no existing director of Westpac can chair the meeting either. Indeed, it is now entirely probable that the entire board of directors will be “spilled” at the meeting — that is to say, every single director having to stand for re-election.
The major institutional shareholders — the industry and corporate superannuation funds and the like — will have to think very, very, carefully over the next three weeks whether they sack all the directors or only some of them.
That’s if, of course, APRA has not acted before then, as it should.
At the very least, the three longstanding directors, who are up for re-election at the AGM, Nerida Ceasar, Ewen Crouch and Peter Marriott, must withdraw their nominations and leave the board. If not, they must be sacked.
The level of delusion around the Westpac
board table is staggering and is captured in the notice of meeting sent to shareholders earlier in the month.
With the Austrac bombshell about to burst over Westpac, the notice projected utterly delusional “business as usual” — including approval of bonuses for Hartzer.
Are you kidding me? Locking in place future bonuses for Hartzer?
He has to forfeit all the bonuses and shares that he would normally receive on his now inevitable and immediate departure.
Indeed, in my judgment, he must now repay all additional payments and bonuses he has received since becoming CEO in 2015, keeping only his basic salary for those years.
Maxsted must repay all board fees he has received since becoming chairman in 2011, for presiding over this disaster.
What has been — at this stage, only partially — revealed at Westpac is quite simply the greatest and utterly inexcusable failure of governance and leadership that I have seen in 50 years of financial reporting and commentary.
It will now have stunningly disastrous consequences for Westpac and its shareholders, the extent of which we cannot possibly estimate but will be huge.
Nobody at Westpac seems to have understood the most basic, the most immediate and the most obvious failure — having a $2 billion share issue without telling investors of this money-laundering disaster.
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How is just this going to be resolved? I have no idea. But at the very least Westpac shares must be suspended before trading opens Friday.
If the paralysed board won’t request suspension, the ASX itself should do it. And if the ASX cannot understand its obligations, corporate regulator ASIC must force suspension.
Westpac should have asked for suspension from the start of trading on Wednesday, ahead of the disclosures of its money-laundering failures.
Indeed, in my judgment, trading in its shares should have been suspended months or even years ago, given the monumental, continual and functionally deliberate failures of its board and management.
Westpac has been and continues to trade in a completely uninformed and indeed misinformed market.
If anyone thinks that Westpac is anywhere near resolving this disaster, they should think again. It is only going to get worse, much worse.
It’s as if the directors and senior management of Westpac have all been sitting, trapped and paralysed, under the main sewerage outflow pipe for the greater Sydney area — waiting, waiting for it to burst over their heads.
On Wednesday, a 10cm inflow pipe did finally burst over their heads. They are still trapped under the main pipe. It is still to burst. It will.