Mistakes, we made a few, Maxsted laments

Outgoing Westpac chair Lindsay Maxsted admits the bank’s brand has been damaged by the Austrac scandal.

Westpac chairman Lindsay Maxsted. Picture: Colin Murty

Outgoing Westpac chair Lindsay Maxsted admits the bank’s brand has been damaged by the Austrac scandal and acknowledges the lender’s board could have done more to prevent it.

But he stresses that the bank “is 202 years old and has done a lot of good things — I just hope people will remember them”.

In an interview with The Weekend Australian, Mr Maxsted said: “There has to be some brand damage.

“We made a terrible, terrible mistake and it must have an impact, but hopefully so will the good things we have done.”

Mr Maxsted, who was due to step down as Westpac chair at the end of next year, has brought forward his retirement date in the wake of the scandal.

Austrac last week alleged Westpac breached anti-money laundering rules 23 million times.

The financial crimes regulator also claims the bank was slow to respond to warnings about transfers of funds facilitating child exploitation in The Philippines.

The allegations led to the axing of chief executive Brian Hartzer this week.

When asked what it means for him personally, Mr Maxsted said: “That is not important — what is important is doing the right thing by Westpac.

“Since the lawsuit hit I’m not sure what we could have done.

“We have tried to do everything possible.

“It’s a balance between accountability and stability.”

He quickly acknowledged that more could have been done to prevent the legal action.

“We made mistakes,” he noted.

After a tumultuous week, Mr Maxsted said he thought “people are better educated. They know the board takes its responsibility absolutely seriously.”

Mr Maxsted has spent the second half of the week talking to shareholders and was helped by the support of proxy advisers Ownership Matters and CGI Glass Lewis. CGI backed the board on all recommendations except the reappointment of six-year board veteran and audit committee chair Peter Marriott.

“ISS was the only one which was against us,” Mr Maxsted noted.

Asked what was happening at the bank now, he said: “We are getting on with the response plan and hopefully our business.

“‘Hopefully everyone understands what we are up to.”

Prime Minister Scott Morrison and Treasurer Josh Frydenberg were vocal in their attacks on the bank and the board but Mr Maxsted declined to respond.

“I can’t say anything about that,” he repeated.

The outgoing Westpac chair has made clear he thinks expectations of boards and indeed auditors are unrealistic.

“Most people seem to think nothing can go wrong,” he noted.

Asked what can be done about the expectation gap, he said: “People need to understand that boards don’t know everything.”

The bank has hired consultant Promontory to investigate the Austrac scandal and will shortly name a group of three independents to consider the expert’s report.

It has also installed retiring chief financial officer Peter King, a 25-year veteran at the bank, to be its interim chief executive while installing Mr Maxsted’s KPMG protege Peter Nash to chair the board committee looking at the issue.

Mr Maxsted has said he will step down in the first part of next year.