Ken Henry waxes lyrical on NAB’s backing the bold

A seven-word question — a 665-word answer.

Ken Henry: ‘It’s quite a long journey.’ Picture: David Geraghty

A seven-word question — a 665-word answer.

NAB’s chairman, former Treasury secretary Ken Henry, was in the mood to elaborate as he sat in the banking commission hot seat yesterday.

Counsel assisting, Rowena Orr QC, wanted an explanation of the “purpose” Henry and his chief executive, Andrew Thorburn, picked out a couple of years ago — “to back the bold who move Australia forward”.

“And what does that mean, Dr Henry?” she asked. She soon regretted the question.

Out came a torrent of words that flowed through the bank’s 160-year history, the development of Vegemite — apparently it failed on the first try — to farmers doing it tough in the drought and young families buying a home.

Zooming in on a single customer, he pulled back up again to reveal the bank’s noble purpose in aid of the entire country.

The oration reached its triumphant conclusion with the statement that NAB board members “should be proud of having that accountability, not just to the shareholders — as important as that is — but an accountability to the country, and for the country’s future”.

Fine words, but perhaps odd ones coming from the mouth of a man who sits atop an institution that has been exposed by the royal commission for charging people — including the dead — hundreds of millions in fees for services they never received, charging customers who put money into cash accounts so much in fees they were going backwards and playing host to a home-loan fraud ring.

Appearing at the commission has been bad for other NAB executives — its smooth head of wealth Andrew Hagger departed the bank last month after a second stint in the stand — and helped egg on the corporate regulator in its pursuit of the institution through the courts.

Last month, the Australian Securities & Investments Commission launched Federal Court action over one of NAB’s fee-for-no-service rorts, and more action appears inevitable from a regulator keen to dispel commissioner Kenneth Hayne’s complaints that it doesn’t get tough with the big banks often enough.

Perhaps it is no coincidence that ASIC’s chief legal counsel, Chris Savundra, was a keen onlooker at yesterday’s hearings.

Yesterday, Henry’s mind was elsewhere, on the big picture. The really big picture.

There was talk of the “cultural inhibitors”, “the dimensions of risk culture that really matter” and NAB’s journey towards cleaning up its act.

“It’s quite a long journey,” Henry helpfully explained.

No, he didn’t think risk culture could be measured — even though Macquarie Group (of all people) already do.

“So the fundamental elements of a good culture have to include both the top-down stuff in terms of purpose and vision, and values, but also the foundational supports,” he said.

His trip down a transdimensional wombat hole left Orr, back in the courtroom, trying to inject a note of reality into proceedings.

“One value that many other banks emphasise is accountability,” she said.

“Is there a reason that that’s not reflected in the NAB values?”

Henry responded: “I don’t think it’s necessary.”

We’ll hear more from Henry when he returns to the stand this morning.