- Commonwealth chair Catherine Livingstone and Rowena Orr, senior counsel assignation the financial services royal commission, had a tense exchange at the start of proceedings today.
- Orr suggested that the board had failed to keep accurate minutes of its meeting, which would be an offence under the Corporations Act.
- Livingstone came under intense questioning over the degree to which she had taken bank management to task over the handling of breaches of anti-money laundering regulations.
- The minutes of the board meeting didn’t mention such questions of management but Livingstone says such records are not meant to record every single interaction.
Commonwealth Bank chair Catherine Livingstone faced intensive questioning in the financial services royal commission today over her claims she took management to task over breaches of anti-money laundering regulations.
Rowena Orr, senior counsel assisting the commission, pointed out the October 2016 board minutes did not record Livingstone’s claim.
Earlier in the hearing, Livingstone gave evidence about her increasing concerns, before she became chair, on the ability of management to deal with escalating problems including notices from AUSTRAC, the Australian Government’s financial intelligence agency, about massive money laundering regulation breaches.
Livingstone says it was at the October 2016 board meeting, when she was a director, that she challenged management in relation to the reports of breaches of anti-money laundering rules.
“I did not receive satisfactory answer to my challenge, because it did not accord with my understanding of AUSTRAC,” she told the hearing.
“That response served to confirm the concern that I had been developing, based on my experience as a non-executive director, that management, at that time, did not have the capacity to respond to what was, clearly, an escalating, significant and serious systemic control challenge.
Later in the hearing, the minutes of that board meeting were shown to Livingstone.
Orr: “You see there is no reference to any director challenging management about the content of that report?”
Livingstone: “I note that there isn’t but that does not mean that I didn’t.”
“Orr: “There’s no reference to management providing any assurances to you about the reasons why CBA was receiving these statutory notices from AUSTRAC?”
Livingstone: “It is not, necessarily, the case that the minutes record every single conversation that occurs … but I can assure you, Ms Orr, I asked the question and I received the response.”
Orr said there minutes were the official record of of the board of CBA at which very significant matters were discussed.
“CBA has a statutory obligation under the Corporations Act to keep minute books,” Orr said.
Livingstone said she was aware of that and that the minutes did record proceedings and resolutions but not every single question a director asked.
Orr: “Well, do you accept that they don’t record a very significant exchange that you say occurred at this meeting but which we have no record of?”
Livingstone: “I do accept that, but I am also aware that I am giving evidence under oath.”
Since she had become chair, the minutes of meetings have expanded and now run to about 30 pages.
Orr: “And do you understand that a failure to comply with the requirements in relation to the keeping of minutes under section 251A of the Corporations Act is an offence?”
“I am. But these are the minutes of the meeting and I assert again that I asked the question and received the response.”
Orr: “And you can offer no explanation for why that is not reported in these minutes?”
Livingstone: “The explanation is the minutes don’t usually record verbatim what is discussed at the board meeting.”