Bank keen to be seen to act without actually acting

The culture of not taking responsibility for decisions made is rife in Westpac.

Westpac’s board, executive team and media unit held crisis talks at the weekend. But as one insider present told me: “The strategy is to use PR and spin to get out of this mess without doing anything to fix the real problem.”

This has been the case right throughout the handling of the Austrac saga.

Those tainted by what has occurred are more concerned about protecting their current jobs or other board appointments rather than actually taking responsibility.

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They fall back on a leadership matrix in banks that feels like it’s designed for obfuscation. Last Wednesday, after CEO Brian Hartzer addressed the media via a teleconference at 3.45pm, a meeting with 100 senior managers was also arranged.

To say the mood in the bank was (and remains) low is an understatement. Hartzer used the occasion to claim he had been let down by those under him, before hastily adding that he wasn’t referring to anyone at the meeting.

Hartzer is American by birth. He’s also a student of political history. I wonder if he knows about the sign former US president Harry S. Truman had on his desk in the Oval Office: “The buck stops here.”

Hartzer may be aware, but he certainly doesn’t live by the same principle.

The culture of not taking responsibility for decisions made is rife in Westpac. Closing down LitePay — the vehicle that allowed for cheaper transactions but at a higher risk — could and should have happened years ago. It didn’t because it was so profitable. It was finally shut down yesterday.

And the decision to move to the LitePay platform in the first place was taken by the entire executive team, signed off by the board, no less. It carried greater risks than the more expensive platform used previously, but the quest for higher profits and bigger bonuses took precedence.

That’s why all those around the decision-making table at the time are responsible for this mess, not just the CEO.

Now one of them, the head of consumer bank, David Lindberg, “has volunteered to go to Parliament House on Tuesday”, according to my source. With the aim to “tell the story that this was an error no one could be responsible for”.

You can’t make this stuff up.

The board and the executive also agreed at the weekend on plans to announce nearly $20m in donations to a charity that “rescues and accommodates children in The Philippines” in a bid to look like the bank is taking action.

I wonder what that dollar amount is as a fraction of the profits Westpac reaped from the risk-riddled LitePay system, which helped finance child exploitation in the first place?