Ghosts of the past haunt CBA chair Catherine Livingstone

Commonwealth Bank chairman Catherine Livingstone (left) and CEO Matt Comyn (right) during the Commonwealth Bank annual general meeting (AGM) in Sydney, Wednesday, October 16, 2019. Picture: AAP

Amid the latest ALP branch stacking scandal, CBA has hit the news amid allegations its highly esteemed chair Catherine Livingstone was selective in her memory about her Royal Commission evidence.

The market, it should be noted, is more focused on immediate concerns, such as reports of the potential for as many as 25 per cent of the deferred home loans to be deemed in trouble and fears the government’s $25,000 homebuyer scheme will be over leveraged.

The focus of separate reports elsewhere on Tuesday was on the evidence Livingstone gave the Royal Commission in November 2018.

Former director Andrew Mohl had sent an email questioning whether the evidence accurately reflected what went on in the board.

At the outset it should be said Livingstone’s position on the board is safe. She is regarded as doing a very good job at a tough time for the industry and having being re-elected in 2018, has every reason to expect shareholders to back her to continue` until 2021, if not longer.

Having joined the board in 2016, she is also regarded as being a cleanskin in terms of all the mud thrown at the CBA board and its governance.

She is well known for being a details freak and on that scale, her former colleague, Mohl, would be regarded as being at the other end of the spectrum.

Some think her operating style is too intense, but those working with her now obviously are not complaining.

Those who have left clearly have their own views.

That said, insiders are asking questions, wondering just what prompted the leaking of Mohl’s email this week.

One explanation being Austrac is now in the news again thanks to the Westpac case and the Livingstone testimony might have come up in conversations with former CBA folk, including Mohl and David Craig, who presently serves as the head of the audit committee at Lend Lease.

Craig used to have carriage of financial crime at CBA when he was CFO in an 11-year term ending in June 2017.

Magic Matt Comyn was appointed as CBA boss in January 2018 and he, like Livingstone, is also regarded as being a details freak, so the two have something in common.

Mohl was his biggest cheer leader when Comyn got the CBA job, and Mohl, who now works as an executive life coach, is still a big fan.

The circulation of an old email relating to evidence of reactions when Austrac first hit CBA show what an impact the regulator has had on the two big banks.

APRA has already raised questions about the poor governance at CBA centring on the audit committee under former director Brian Long and the risk committee under former director Harrison Young.

Austrac representatives had lunch with the CBA board in June 2016 and by all reports, there were few concerns expressed.

The following year, the Austrac litigation landed at CBA and apart from reputational damage, ended up costing the bank $700m.

In all, the bank has spent $2bn or more on compliance snafus, so governance wasn’t great in the pre-Livingstone era.

As stated, her position is safe and market reaction to the email circulation would be more questioning of the former directors.

That said, while her position is 100 per cent safe, she would not enjoy seeing old dirty linen being hung on the line, but that, it seems, is part of being a big bank chair.