Today’s announcement that Ian Narev will be stepping down when a replacement can be found has satisfied Canberra’s lust for heads and accountability, but does the reverse for the good governance of the bank.
Just days ago Narev was hosting the bank’s annual results media dinner, giving no sign that he is about to hand in the reins any time soon and in fact was ready for the fightback on the Austrac allegations the back has breached money-laundering laws.
The need for accountability is clear but today’s move smacks of a board that is either panicking or, alternatively, has known about the events for some time, which is what ASIC chief Greg Medcraft thinks.
Narev has hand-picked his executive team with a view to future leadership prospects, but his most obvious successor, Matt Comyn, is at the centre of the Austrac scandal.
Granted there are confused lines of responsibility which the bank is yet to untie but an outside chief executive would seem the most likely alternative.
This will not please CBA investors who made clear last week they wanted Narev to stay.
Livingstone has chosen the exact opposite route and opened the door for massive change at the bank.
There is a solid argument which says massive culture change is necessary and Livingstone has done the right thing to get the ball rolling.
But assuming the Austrac litigation was new news to the board this move, before the bank has responded to the claims, smacks of a political solution.
Canberra now has the head on the stock it wanted, which is the head of the biggest company on the Australian bourse.
This should satisfy all the calls for accountability.
That much is good but a more managed approach, by leaving some space between the litigation and Narev’s departure, would have made more sense.
Livingstone and her board are rattled and have taken matters into their own hands.
In doing so they have magnified the scandal dramatically, ensuring upheaval at the bank.
As much as she has done the rest of the industry a favour, CBA shareholders won’t be thanking her any time soon.
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Commonwealth Bank chair Catherine Livingstone has panicked and in the process created a lame duck chief executive at the precise time she needs a strong executive leader.