- The former chairman of the Commonwealth Bank, who had presided over the years the bank was hit by a series of scandals, was asked to give back part of his director fees.
- However, the financial services royal commission was told that David Turner refused to give back 40% of his fees. He refused.
- The bank had shaved the bonuses of the CEO and executives by 20% and directors gave themselves a 20% fee cut.
The board of the Commonwealth Bank, when it decided to take a 20% cut in director fees following a series of scandals, asked former chair David Turner to give back 40% of his fees.
But Turner refused, according to evidence in the financial services royal commission today. Turner had been a member of CBA’s board since 2006 and was chairman from the start of 2010 to the end of 2016.
Current Commonwealth chair Catherine Livingstone told the commission hearing that Turner sent a message back that he didn’t recognise the bank in a report by APRA, the banking regulator, on the culture the CBA.
The APRA inquiry in May this year found that a failure of culture was behind a series of scandals which eroded trust in Australia’s biggest bank.
The regulator called the bank’s culture insular, the board of directors had “inadequate” oversight of emerging non-financial risks, and senior executives had a lack of ownership of key risks.
Rowena Orr, senior counsel assisting the commission, asked current chair Livingstone today why the board asked her predecessor to return fees.
Livingstone: “Because the board felt that it was appropriate as chair that he also effectively participate in the reduction that we had all taken for effectively what was described in the APRA report.”
Orr: “So why didn’t you make that clear in the remuneration report?
Livingstone: “Because the former chair did not agree to return any of his fees.”
Orr: “Do you think it was important for you to publish that the board had made that request of the former chair?”
Livingstone: “Well, I suppose I didn’t consider at the time including it, and maybe I should.”
The CEO and all group executives had their short-term bonuses for that financial year reduced by 20%.
The board decided that former CEO Ian Narev would not receive any of his short-term bonus or any of his unvested long-term variable remuneration.
Business Insider Emails & Alerts
Site highlights each day to your inbox.