Shayne Elliott's first steps in his master plan to fix the culture at ANZ

Shayne Elliot. Photo: ANZ Group/ YouTube.

ANZ chief executive Shayne Elliott says the bank’s board is examining new remuneration structures and pledged not to sweep misdeeds under the carpet “even if it comes at a cost of being in the newspaper or being sued by people”.

Mr Elliott said he wanted to move away from rewards centred on profit and loss and to improve culture by focusing on rewards for collaboration.

“We are having a good conversation at the board level about that for obvious reasons,” Mr Elliott said in a speech at a Women in Banking and Finance lunch in Melbourne,

“I think there is some legitimate questioning of the system today and things haven’t always worked out so well.

“We’ll go through a transition and we want to think about these things, about the role remuneration has in the company and culture. I can’t change that overnight but we are absolutely going to fix that.”

Cultural storm

ANZ has been at the centre of growing storm about cultural issues within the banks.

In January, ANZ become embroiled in legal action with two traders. One, who later dropped his claim, described a “toxic culture” at the bank. The other claimed management tolerated a culture of drugs, strippers and alcohol amongst senior trading staff.

In March, the Australian Securities and Investment Commission launched legal action against ANZ, claiming the bank had manipulated the bank bill swap rate. ANZ is defending the action.

On Monday, ASIC chairman Greg Medcraft, fired the latest shot in in the banking culture wars, hitting back at prominent directors, including ANZ chairman David Gonski, who have questioned whether the corporate watchdog should become the “culture police”.

“Time and time again, we have seen firms blaming [behaviour] on a few bad apples driving bad outcomes for consumers, rather than taking responsibility by looking more closely at their organisation and implementing the necessary changes to address the root cause of the problem,” Mr Medcraft said.

Culture causes crises

Mr Elliott said on Tuesday that many of the big financial crisis of the last 30 years could be traced back to breakdowns in culture, and particularly incentives paid to employees that encouraged risk.

“Our industry can go off the rails with the wrong kind of ingredients in the mix and that’s pretty easy to do.”

He said that in response to the revelations of bad behaviour on the dealing floor, management had made it clear that was “not going to tolerated and we are not going to sweep it under the carpet … even if it comes at a cost of being in the newspaper or being sued by people”.

Mr Elliott said it was important to be transparent about how problems were dealt with.

“That’s an important thing to also support the 99.99 per cent of people who come to the bank and to absolutely the right thing.”

He said culture was now a standing item on the monthly meetings of his executive committee.

Asia still a focus

Mr Elliott also hit back at suggestions that he was determined to shrink ANZ’s presence in Asia.

He said he was proud of the network that the bank had built in the region and wanted to focus on capturing trading capital flows across the region.

But he said the business was “built in a hurry” and “probably wasn’t perfectly built”.

“It’s now time to just tighten it up. [But] it’s not the objective to make it smaller.”

A candid Mr Elliott also revealed that he is a vegetarian and that his father did not borrow money for most of his life, having seen his own parents lose their house in the Great Depression.

“My father just grew with this absolutely morbid fear of debt,” he said. His late father eventually took out a small mortgage to buy a boat.

This story first appeared at SMH Business Day. Follow us on Facebook.

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