At the larger end of the banking sector in 2024 investors saw new CEOs take the reins at National Australia Bank and Westpac, while ANZ announced a successor for longstanding boss Shayne Elliott. At the regional players, Bendigo and Adelaide Bank also saw a changing of the guard.
At NAB, head of business banking Andrew Irvine took over as CEO in April last year, while Westpac’s equivalent Anthony Miller started in the Sydney bank’s top job in December. ANZ’s board, led by Paul O’Sullivan, has tapped former HSBC and Santander banker Nuno Matos as its next CEO from July, while Richard Fennell took over at Bendigo Bank in August.
Irvine’s move to the top job was the first big change-over last year. NAB’s well-regarded chairman Phil Chronican, who was appointed to the board in 2016, had a hand in appointing Irvine and his predecessor Ross McEwan.
Chronican, an experienced, highly numerate and steadfast banking executive who was overlooked for CEO roles both at ANZ and Westpac, has more than proven his mettle at the helm of NAB’s board. He oversaw the damaging fallout from the Hayne royal commission and helped steer a turnaround at battle-hardened NAB.
That included Chronican having a short stint as acting NAB CEO after the royal commission’s scathing final report claimed the jobs of then boss Andrew Thornburn and chairman Ken Henry.
But after almost nine years on the bank’s board, Chronican and his fellow directors are no doubt carefully plotting a path to the next NAB chair, even though he can technically stay on until 2028.
NAB’s board composition, renewal and performance policy stipulates that the maximum tenure of a non-executive director – other than the chair – is nine years from the date first elected, but the chair can stay on for 12 years. The chair’s tenure can be further extended at the discretion of the board, but only on “an exceptional basis”.
A source close to the board said Chronican was known for his diligent planning and encouraging “rigorous discussion” around the table. The source believes it is a line ball call as to whether the next NAB chair will be an existing non-executive director or an external appointment that will take over after a requisite handover period.
In this columnist’s view, among those on the NAB board that have a shot at the role are former KPMG Australia national chair Alison Kitchen, who joined the NAB board in 2023, and former investment banker and Future Fund guardian Carolyn Kay. Ms Kay was also a panel member of the Commonwealth Retirement Income Review.
Former Macquarie banker Simon McKeon and former ANZ banker Kathryn Fagg cannot be ruled out as the next NAB chair, although investors may take a dim view of issues on other boards they are, or have been, associated with.
Fagg was Boral’s chair during the turbulent period that followed the acquisition of US group Headwaters, while McKeon remains on the board of Rio Tinto and was a director during the destruction of rock shelters at Juukan Gorge.
Investors and analysts will be watching any new appointments on the NAB board very closely, given the succession process that has to occur for Chronican. And they are big shoes to fill.
In a note late last year, MST Marquee analyst Brian Johnson said that as acting NAB CEO and then chairman, Chronican “heralded a fundamental turnaround for the previously long-running operationally underperforming, perennial total shareholder return laggard”.
Johnson noted that Chronican may opt for another three-year term beyond December 2025, but also questioned whether the next NAB chair was currently on the bank’s board.
“History suggests that a fourth three-year term is rarely completed by an incumbent chair. That said, as we look at the NAB board, it’s not clear to us that the next chair is actually on the board.”
One thing is certain, NAB has reaped the benefit of having an experienced banking executive leading its board. Chronican’s decision to lure McEwan back to the Australian banking market was a master stroke, given he was the right person to make the tough decisions at NAB and rule a line under the controversies of the past.
The NAB board must ensure the next chair is as capable as Chronican in holding the CEO and executive team to account and able to ensure the bank’s improved standing doesn’t slip. Separately, the major banks will be hoping they don’t get too much attention in the federal election campaign.
With a rural branch levy being considered, the issue of banking services will no doubt crop up again this year.
Chronican is also a director of supermarket giant Woolworths – a role he has held since 2021 – and will probably feel the political and regulatory heat in that role this year. The competition regulator has launched legal action against Coles and Woolworths, alleging they breached consumer law by falsely discounting hundreds of products.
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