Business Live:A�Australia’s biggest company, the Commonwealth Bank, has a complacent culture and ineffective board, the country’s financial services regulator said Tuesday in a scathing assessment after a series of scandals.
The banking giant has been embroiled in claims it broke anti-money laundering and counter-terrorism financing laws and is also facing court over alleged rigging of the benchmark interest rate, which is used to set the price of domestic financial products.
“These risks were neither clearly understood nor owned, the frameworks for managing them were cumbersome and incomplete, and senior leadership was slow to recognise, and address, emerging threats to CBA’s reputation,” its report said.
“The report, I think, is required reading not only for every financial institution in this country, but, frankly, it should be the next item on the agenda of every single board meeting in this country, regardless of whether you’re a bank or not,” he said.
Morrison said it showed the bank had “a complacent culture, dismissive of regulators, an ineffective board that lacked zeal and failed to provide oversight, a lack of accountability and ownership of key risks by senior executives”.
CBA said it had given an “enforceable undertaking” to APRA to address all recommendations made in the report.
They include a more rigorous level of governance, improving accountability, and a cultural change “that moves the dial from reactive and complacent to empowered, challenging and striving for best practice”.
CBA’s new chief executive Matt Comyn said the report was “confronting” and that he had printed 500 copies and sent them to the bank’s top executives.
“And over the next week I am going to have responses from all of those 500 leaders coming back to me, and a discussion across all of the top leadership groups in the Commonwealth Bank talking about how things are going to be different,” he said.
The bank was taken to the Federal Court last August for “serious and systemic non-compliance” of anti-money laundering laws more than 53,000 times, with financial intelligence watchdog AUSTRAC filing 100 other claims in December.
Dhaka, 1 May, (campuslive24.com) //MI