Time to haul bank CEOs before Kenneth Hayne’s royal commission

Day after day senior executives tell the bank inquiry key issues are outside their responsibility. So let’s bring in the CEOs.

NAB CEO Andrew Thorburn.

Where are the bank CEOs at the royal commission?

It’s time to bring them in.

Day after day Justice Kenneth Hayne and his team quiz senior bank executives and without fail they raise the defence that key issues are outside their responsibility. So bring in the CEOs and that defence is no longer appropriate.

Indeed Andrew Thorburn, the NAB chief executive, must surely be called first.

The superannuation segment of the inquiry now in its second week has devoted almost four of its seven days to executives from NAB, most recently when the bank’s head of wealth, Andrew Hagger, spent hours being interrogated over dealings with ASIC.

It was Hagger’s second appearance before the commission. With executives entering the ring for a second time the absence of the top brass becomes more obvious.

On Tuesday we also got a second helping of Linda Elkins, the hapless executive general manager at CBA-owned Colonial, who returned to the dock for more spectacular admissions. This time she conceded the bank had 15,000 potential criminal breaches in its super division for the sake of avoiding an IT problem.

Really, it’s time to move up the line.

When you get a major bank CEO in the dock it should give us substantial insights into how these organisations really work — and at their best, these top executives speak a lot more freely than their staff.

The CEOs are the ultimate spokespeople for any bank — they are invariably the highest paid, they are 100 per cent responsible for the culture of a bank. Moreover, it is clear from these hearings that executives at top levels are trying to please their CEOs as much as they are to any degree trying to please customers.

Take the case of IOOF chief executive Chris Kelaher. The commission had been wasting time with IOOF general manager of distribution Mark Oliver, who could barely answer a single question in a satisfactory manner. Once CEO Kelaher took the stand, governance issues at IOOF were clarified, not to mention record keeping issues where we found out Kelaher used handwritten pieces of paper as evidence of board minutes.

We also get to see why some funds are winners and some are perennial losers: Take Hostplus CEO David Elia, who offered a unique insight into why his superbly performing fund remains at $33 billion a mid-sized player. Elia said he had been in merger discussions with another super fund “for 20 years”, the implication being he was getting nowhere.

There may be an argument that the bank CEOs are simply too far up the corporate tree to call in just yet. But we have already seen some of the biggest players in the wider financial services industry inside the commission. Hayne and his team have already had a CEO with as much firepower as Thorburn. In fact, Ian Silk, CEO of AustralianSuper, runs an operation with $140bn in assets, while NAB has a market cap of $76bn.

Perhaps there is a sense that the bosses should not be heard until the very end of the hearings: This argument hardly stands up to interrogation either — the commission can call them up as many times as may be necessary.

Call them in now, and let’s hear what they have to say.