Shayne Elliott, the CEO of the ANZ Bank, has agreed that there’s been some appalling behaviour by a few at his bank.
He was responding to questions about a blokey culture — something he believes doesn’t apply to the entire bank — when he appeared at the House of Representatives economics committee which is calling the big four bank CEOs to account.
Julia Banks, a Liberal MP, said: “Do you think as a CEO who earns millions of dollars, it’s OK to answer questions here by saying, ‘Yes, we made a mistake, we fixed it and I apologise‘. How many times can you say that? Do you think that’s adequate?”
Elliott replied: “I think that’s the reality of large organisations, that when things go wrong our responsibility is to fix them and make sure they don’t happen again and make sure our customers are treated respectfully. But the reality is that most things don’t go wrong and that most of our customers are satisfied with the bank.
Banks said: “It seems that the ANZ Bank has had a systemic issue with inappropriate conduct of its employees for which you are apologising and continuing to apologise.”
The Victorian MP said the bank appeared to have a reactive compliance policy and that it worked with the financial regulator ASIC (Australian Securities and Investments Commission) only when it suited it.
She noted the bank bill swap rate case saga, where ASIC is alleging price fixing by some banks including the ANZ, and that some of the employees in that investigation have been reinstated.
Elliott said: “We reinstated those employees because they have done nothing wrong. If our employees have done nothing wrong they are entitled to come back to work.
“When we found wrongdoing, which was nothing to do with ASIC allegation of our market manipulations, it was code of conduct violations, we fired those people.”
Banks asked Elliott if he would would agreed that a company’s culture is key and that this is defined by the leader.
Elliott said: “Sure.”
Banks then referred to reports that two employees identified in the ASIC investigation made allegations about adult entertainment and drug taking, clear breaches of employee conduct. (The two traders who made allegations of a culture of sex, drugs and alcohol later withdrew their separate legal actions.)
“How could this happen … without you becoming aware of it?” she said.
“Is there a failing in your risk management framework such as your whistleblower framework? According to their data and their stats from their unfair dismissal claims, it was clear that there was this endemic blokey culture in the institutional banking sector that you were the leader.” (Elliott joined the ANZ as head of institutional banking in June 2009. He has been CEO of he bank sine January.)
Elliott replied: “We should remind ourselves who was making these allegations. It was in their interests … unfortunately there was a small number of people in the markets part of institutional banking who behaved appallingly. When we found out about those, we acted immediately.”
The ANZ found out about the behaviour after looking at millions of chat conversations.
Banks said: “But for that ASIC investigation you would not have identified that inappropriate conduct?”
Elliott replied: “I think that’s a fair comment for that time.”
Banks, a corporate lawyer by background, referred to her maiden speech to Parliament in which she described what she called a “smirky” bank manager when applying for a mortgage with her husband.
She was told by the bank manager that they would only take her husband’s income into account, as she was of child-bearing age.
Banks asked: “With that backdrop of a blokey culture can you say from your heart of hearts that female customers are treated as fairly as male customers?”
Elliott replied: “This idea that the entire bank has a blokey culture, frankly, I reject that. If we looked at the vast part of the bank, we’re talking about retail customers, branchland, it’s overwhelmingly run by very, very good women.”
During later questioning, Elliott said: “I am proud of the culture of our bank.”
When mistakes are made, the ANZ culture is to admit and then fix it, he said.