‘This needs to change’: David Gonski admits ANZ Bank failings

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However, he described some of the report’s “many critical findings”, pointing to shortcomings in the bank’s accountability, its governance systems, and culture.

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“We have a culture where our teams do not always speak up. When permission or a process is ambiguous, we can be conservative in our decision making. Often this leads to an outcome where we do nothing,” Mr Gonski wrote in an article published on ANZ’s website BlueNotes.

“This needs to change,” he wrote.

Mr Gonski also hinted at a tendency for staff to accept problems, saying the review identified a “conditioned acceptance at ANZ that it’s ‘all too hard’ or ‘it’s the way it’s always been’.”

Describing the bank’s culture, he said there was a greater focus on “short-term fixes,”  and a lack of clarity around what it meant to be “customer-centric”.

He also pointed to a lack of accountability, though he said there had been improvement on this front thanks to the government’s Banking Executive Accountability Regime (BEAR). “Accountability for outcomes across ANZ, particularly in relation to inaction or poor performance, often lacked clarity below the senior executive level,” Mr Gonski said.

In response, he said the bank would simplify its operations and strive for a culture that encouraged staff to speak up when they see something wrong. It would “significantly” speed up the time it takes to pay compensation, with plans to add to its team of almost 500 staff who specialise in customer remediation.

We have a culture where our teams do not always speak up.

David Gonski

Mr Gonski vowed that the ANZ board would take a more long-term approach, and would hold management to account.

“We are determined the board will improve the way it questions management — and itself — in relation to the question of our long-term ambitions. While it is noted many Australian institutions like us have a tendency to focus on the short-term, that is no excuse,” he said.

There will also be a detailed review of the board’s charter, to be completed by the end of the year.

In response to the cultural and governance risks identified in their “self-assessments,” ANZ Bank, National Australia Bank and Westpac were last month each forced by the Australian Prudential Regulation Authority (APRA) to hold an extra $500 million in capital. Commonwealth Bank was required to hold an extra $1 billion in capital after the scathing review last year.

The Australian Prudential Regulation Authority has also refused to release the self-assessments, and rejected a Freedom of Information request for ANZ’s self-assessment on the basis this was “protected” information.

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