ASIC chair James Shipton is underwhelmed by the conversation skills of some bank directors

  • ASIC chair James Shipton says his meetings with bank boards have mostly been a one-way dialogue.
  • But he also has regular structured meetings with the CEOs of the major banks.
  • He says he has been “very forthright” in telling the CEOs and directors what he thought.

ASIC chair James Shipton says his meetings with senior bank board directors have been less candid they he had hoped.

“I was surprised that such senior people spoke so little,” he told the financial services royal commission.

Shipton, who became ASIC chair in February, says he’s done most of the talking when he’s met with boards of directors.

“It has been a bit of a one-way dialogue,” he told the hearing.

“So no matters of significance, at least coming from a financial institution, have been raised.”

But he says he has been “very forthright” in telling them what he thought.

He’s called CEOs to his “express dissatisfaction”.

“I’ve called CEOs to express dissatisfaction on a number of occasions as regards the handling of particular matters that are being handled by our enforcement teams,” he told the royal commission.

He told them he wasn’t happy about what he termed “legal trench warfare”.

“I have also expressed my dissatisfaction to these leaders about the lack of professionalism in the Australian financial sector,” he says.

He had told them “they have forgotten that they are dealing with other people’s money”.

Rowena Orr, senior counsel assisting the commission, asked whether it was appropriate that the same ASIC people, who are ultimately responsible for making decisions about whether to take enforcement action, are regularly engaging with the institutions.

Shipton: “I do think it’s appropriate … on the foundation that we continue to exercise the highest standards of professional judgment in our interactions.”

He counsels fellow ASIC Commissioners to approach the meetings with a “healthy dose of scepticism”.

Shipton is creating a new layer of management to take many of the day-to-day operational responsibilities away from the Commissioners.

He described ASIC’s relationship with bank CEOs as open and professional.

Commonwealth Bank chief executive Matt Comyn has told the royal commission that he and Shipton get together every quarter.

“I aim to have very structured formal meetings with people like Mr Comyn,” Shipton told the hearing.

And they often spoke by phone. Comyn would give Shipton a heads-up on a market announcement coming the next day.

“That’s important for us as a market regulator but it’s also very important for us to be aware of business developments inside a financial institution as important as the Commonwealth Bank,” says Shipton

“I have spoken directly to him and his senior colleagues and the board exactly about our expectations, and my expectations as a regulatory agency.”

He also had similar interactions with the CEOs of the other major banks.

Shipton was asked why he gave advance notice to the banks of findings against them before they are released.

He said it was in the interest of fairness.

“I do not believe that giving them advance notice of our intent to publish their names in any way distracts from the importance and the impact of this particular report,” he told the hearing.