Culture review earmarked for embattled NAB trading team

The bank’s chief executive has written to staff describing the team’s poor conduct as ‘totally unacceptable’.

NAB’s trading team has been hit with allegations that it is a “boys club” with poor workplace culture. Picture: Getty Images

National Australia Bank will instigate a cultural review into its trading team after senior managers asked staff to fabricate workplace surveys amid claims of bullying and harassment.

The bank’s chief executive, Ross McEwan, has also directly intervened to resolve the growing dysfunction within the embattled unit, telling staff in an email sent late on Tuesday that workplace culture surveys were “not a game to be manipulated”.

The Australian on Wednesday reported that trading team staff had been asked to manipulate the workplace surveys – which are linked to remuneration – so as not to “make us look bad”. “The e-Sat score contributes 15 per cent to the bonus pool … so it is in our interest to answer 5 to that … then write comments about why you don’t like NAB,” one message read.

Mr McEwan, in an email, said the revelation was “so disappointing”. “This is totally unacceptable and those found to be engaging in this behaviour will be disciplined as we would want anyone who acts dishonestly,” he wrote in correspondence obtained by The Australian. “Feedback is a gift, not a game to be manipulated.”

The team, which has around 40 employees, has also seen high levels of staff turnover with at least a dozen leaving in the last two years.

In particular, one trader, Dikele Diawara, has begun legal action against the bank after alleging her former manager, Tim McCaughey, subjected her to years of poor behaviour. Mr McCaughey is the head of NAB’s trading team.

READ MORE: NAB unit asked workers to fudge surveys | Always get the basics right: inside NAB’s rebuild | NAB hit with ‘boys club’ allegations

Ms Diawara alleges, in one instance in late 2019 or early 2020, Mr McCaughey approached her “clubbing” a baseball bat and telling her he did not want to hear about a customer “asking about NAB’s ability” to deal in residential mortgage-backed securities.

The bank’s corporate and institutional executive, David Gall, addressed The Australian’s reports on the issue in a meeting on Wednesday morning, telling staff they should report issues immediately.

Mr Gall also told the meeting that the bank would launch a culture review of the markets division and interview all staff in the team.

NAB declined to respond to questions on Wednesday.

The bank, and the sector more broadly, has been at pains to avoid the sleaze and wrongdoing revealed by the financial services royal commission, and the significant damage from the last scandal in the trading team.

In 2005, the former head of the bank’s foreign currency options desk was jailed over his involvement in a $360m deception.

Luke Duffy and the three others were accused of falsely inflating the profits made to avoid the scrutiny of management, preserve their jobs and receive bonuses.

The scandal cost NAB executives in charge of corporate and institutional banking, markets and risk management their jobs.

Despite this, an independent review of NAB’s foreign exchange systems conducted in April 2018 was unable to assess whether the bank would be able to detect or prevent employee misconduct.

In a separate email on Tuesday, Mr Gall told staff: “In the coming days, you may also see some more media about the Federal Court claims against NAB and alleged cultural issues within markets.”

“As I mentioned before we are taking these allegations extremely seriously, we’re actively participating in the court process and we’re unable to comment further given the matter is before the courts.”

While NAB’s staff bonuses are not solely dependent on the outcome of its workplace survey’s engagement, it contributes to an employee‘s variable salary.

These bonuses are paid to management on a deferred basis.

NAB declined to detail whether it would be assessing future payments of bonuses given allegations of survey response fixing.

Former staff in NAB’s trading team have told The Australian they were singled out after making negative comments in the staff surveys and cautioned if they gave negative scores their bonus would be impacted.

KPMG, which runs the bank’s whistleblower investigations unit, has begun an inquiry following complaints from one employee who left the team in April.

On Wednesday, The Australian reported it had confirmed the departure of a number of senior staff in the last two years including wholesale banking director Vaughn Harvey, FX dealer Bradley Leffler, trading director Gavin Sheridan, interest rate derivatives trader Noel Nallaiah, head of derivatives Rob Collins, and trader Hermeet Najjhur.

The Australian is not suggesting wrongdoing on behalf of those who have exited, only that the turnover rate is significantly higher than sector norms.

One former team member said the “legacy of the 1980s is alive and well” in the unit. Current and former members of the trading team have told the Australian Ms Diawara’s allegations of a “boys club” culture were true.

Ms Diawara, who started working at NAB in 2007 in London, joined the bank’s repo trading desk as director in 2016, moving to Sydney in December. She also alleged her $200,000 remuneration was “the same, or not considerably greater than, what the respondent was paying persons in roles with less responsibility than the applicant”.

Ms Diawara alleges when she attempted to alert management within the bank’s trading team of the issue she was ignored or cautioned not to raise it.

NAB, in its latest full-year review, said it had partially or fully substantiated 53 of the 190 wrongdoing complaints lodged in the year to June 30.

NAB launched its third quarter survey of staff on Wednesday.

A 2019 self-assessment of NAB culture found the bank had issues with remuneration and performance management which “didn’t consistently and visibly sanction poor behaviour or reward good behaviour”.

At the time, NAB chairman Phillip Chronican told a parliamentary committee that 26 per cent of staff could rule out retribution if they reported unethical conduct. Its latest annual review puts now puts that at 81 per cent.