NAB chief executive Andrew Thorburn today faced intense questioning in a parliamentary committee over the lack of accountability, and consequences, for senior executives when bank customers are “ripped off”.
Thorburn was today the first of the big bank CEOs to appear for a second round of questioning before the House of Representatives Standing Committee on Economics.
Earlier in the day, Thorburn told the committee 1138 employees had in the 2016 financial year been found to be in breach of the company’s code of conduct.
Two senior managers were among 200, from a total of 35,000 staff, who were dismissed. Other consequences ranged from formal warnings to cuts, or non-payment, in bonuses.
All the banks have faced constant questioning from the committee over the question of accountability of senior executives, none of whom has lost their job over a series of scandals in banking.
Today, Liberal MP David Coleman, the committee chairman, opened questioning by asking whether any senior executive lost their job as a result of issues, including poor financial planning advice to customers, at the bank.
“The buck needs to stop with senior executives,” Coleman said.
Later Liberal MP Julia Banks asked Thorburn: “First I’d like to go to the recently reported case where the NAB was forced to pay $36.5 million in compensation after you ripped off hundreds of thousands of superannuation customers and knocked back insurance claims from seriously ill people.”
She reminded Thorburn of his previous comments that his opinion was that these matters didn’t constitute misconduct, but were rather a matter of poor execution.
“And that is indeed why no-one in that department suffered the consequences of termination of employment, is that correct?” she said.
Thorburn: “That’s correct.”
Julia Banks then asked whether anyone had been held accountable if no-one had lost their jobs.
Thorburn: “People will have been held accountable for the performance non-delivery.”
Julia Banks: “What does that accountability look like? What was it, a slap on the wrist? A warning letter?”
Thorburn: “We found (the cases) and proactively reported to ASIC (Australian Securities and Investments Commission).”
Julia Banks: “But what did you do to the senior executive in charge of that matter? Did you just say: Bad execution? Did that senior executive get his bonus for the year? Did he have to write out 50 or so warning letters to managers who had given the wrong financial advice? Was he promoted? What happened to him? … What happened to those people who caused undue anxiety, ripped off Australian customers $36.5 million?”
Thorburn: “We have done reviews on both those cases. Whist they were well intended, they were poorly executed. The people who were primarily involved with handling that execution are no longer with the company.”
Julia Banks: “They have left the company at your request or at their desire?
Thorburn: “I don’t know the specifics.”
Julia Banks: “Did they leave the company given the consequence of this matter or did they leave because they wanted to leave for a better job somewhere else?”
Thorburn: “We do go through a thorough process here and we do need to be fair to the individual … “
Julia Banks: “I understand that. I am here for the bank’s customer … and I want to know whether those people — who you took through the fair process, your employees — what was to consequences to them?”
Thorburn: “I will have to take the specific question on notice … did they resign or were they dismissed.”
He then pointed out at that the average compensation paid was $150 per person across the 220,000 people impacted.
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