CBA board shows signs of stress
As another exit leaves a sixth hole in CBA’s executive team, monthly board meetings at the bank are also blowing out.
The board is also undergoing renewal, and it’s working harder.
The word on the street is that, since the beginning of the year, monthly board meetings have sometimes turned into three-day affairs — a day longer than before.
A bank spokesman said it’s more a reflection of the current workload than any permanent change.
Among other things, this includes acceptance of the APRA report on culture and risk and implementation of its 35 recommendations, the financial services royal commission, Austrac’s money laundering allegations, and last week’s settlement with ASIC over attempted unconscionable conduct in relation to interest-rate rigging.
Permanent or not, the APRA report fired a rocket at the directors over their complacency and a “dulling of the senses” that blinded them to a deterioration in the bank’s risk profile.
It also found that the board deferred to chief executive Ian Narev for internal and external communications to ensure there was a single, consistent voice.
The result was that the board didn’t have a highly visible presence, and the lack of apparent urgency in dealing with non-financial risks could have resulted in a “tone of inaction” where sound risk management principles were deprioritised.
These findings related to the operation of the board before last year’s appointment of new chair Catherine Livingstone.
Under Livingstone, the panel found, agendas had been enlivened, and there had been an increase in urgency, and an environment of greater challenge and engagement with the executive team.
Board members talked of a “don’t tell me, show me” philosophy to ensure that the trust placed in executive teams was justified.
The departure of Jesudason, who was briefly an internal contender to succeed Narev, means there are now six vacant roles on an executive leadership team that currently has only seven incumbents.
The vacant jobs are chief financial officer, head of the retail bank, head of the institutional bank, chief information officer, head of wealth, and head of people and culture.
Jesudason was the Hong Kong-based chief of CBA’s international financial services unit from 2015 until he his appointment last year as CFO.
He now returns as chief operating officer of Block.one — publisher of the EOSIO blockchain software and seller of the EOS token, a top-five cryptocurrency based on its $US12.4 billion ($16.4bn) market value.
As COO, he will be responsible for scaling the group’s global operations.
One senior industry observer warned today that the punishing BEAR (banking executive accountability regime) framework and continuing scrutiny from the royal commission could result in an exodus of senior banking talent.
“Why would you want to work in Australia when you’ve got BEAR, the royal commission, (the likelihood of) no bonuses at CBA, and the end of the housing cycle?” he said.
It remains to be seen if others will follow Jesudason’s example.
Email: gluyasr@theaustralian.com.au
Twitter: @Gluyasr
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