The verdict on Greg Medcraft's time at ASIC is that he needed to be tougher with the big end of town. As Mr Medcraft prepares to step down as chairman of the corporate watchdog, the one constant of his time in the job has been banks — and more particularly, the Commonwealth Bank.
"This is the largest company in our country and frankly should be setting the standard of leadership for all companies," he lamented as the latest and biggest scandal to engulf CBA broke back in August.
The bank allegedly committed 53,000 breaches of the AUSTRAC money laundering laws, potentially helping drug dealers and terrorists.
When he took the job in 2011, Mr Medcraft was confronted with the wash up of CBA's involvement in the collapsed Storm Financial.
"It's fair to say that Mr Medcraft was unable to change the culture of Australian banking," said Labor Senator Sam Dastyari, who has been a fierce critic of ASIC over the years.
Senator Dastyari was a member of a parliamentary committee which not only recommended a Royal Commission into the banks, but also into ASIC over its perceived inability to stand up to the Commonwealth.
"The evidence is so shocking and the credibility of both ASIC and the CBA so compromised that a Royal Commission really is warranted," the committee concluded.
"It would appear the strategy adopted by the Commissioner and his team is to manage the affairs that may turn out to be scandals in the hope that the banks would come clean and perhaps admit to their good doings or bad doings and manage the whole thing," Sydney Business School Research Fellow, Michael Peters said.
"It turned out the banks were not interested in doing that — they were more interested in getting away with it," he added.
A Productivity Commission inquiry also highlighted ASIC's shortcomings, including its culture and management.
But one of the biggest problems under Mr Medcraft was that ASIC had too much on its plate, Mr Peters said.
"To expect them to do mining companies in the morning and take-away food shops in the afternoon, and by late afternoon they're doing CBA and ANZ, that's a little bit unrealistic," he said.
This goes to one of the biggest criticisms of Mr Medcraft's time at the top, which was his failure to regularly take on the big end of town with his $50 million war chest.
This can be contrasted with the aggressive pursuit of Rio Tinto by overseas regulators, culminating in a former CEO and chief financial officer being charged in the US with fraud.
"What so many people are sick and tired of is a regulation system in Australia where the regulators are geared against action, not towards action," Senator Dastyari said.
But Senator Dastyari said Mr Medcraft deserved credit for trying to lift ASIC's game.
"I think at some point half way through his term, Greg realised he wasn't going to be loved.
"And in fact, he became a lot better regulator when he started getting more aggressive."
According to Senator Dastyari, an example of that was ASIC's court action against the other three big banks over interest rate rigging.
"His lasting legacy apart from his individual reforms around the funding of ASIC is going to be where this court process with the bank bill swap rate leads us to."
ASIC, under Mr Medcraft's watch, can also take credit for making company directors more aware of their responsibilities, said Pauline Vamos, the head of corporate governance house Regnan.
"It's been very pleasing to see ASIC finally come out and say 'yes, there is a clear link between culture and conduct and management of risk and regulatory outcomes for consumers and the responsibility for monitoring that is with directors'," Ms Vamos said.
In her previous role, Ms Vamos was head of the peak superannuation body Association for Super Funds of Australia (ASFA) .
She said ASIC had won no friends in superannuation by forcing the sector to spend many millions of dollars lifting its game on disclosure, and then changing its mind after the money had been spent.
"You cannot settle on a result, particularly with something like fees and cost disclosures, where you have to issue Product Disclosure Statements and settle on that result and then issue class orders one or two months later changing that result."
Changing the culture will be the biggest challenge for ASIC's new chairman James Shipton.
"My advice for the incoming chairman is, be tough, talk tough, but act tough as well," Senator Dastyari said.
The Senator said he was prepared to place his support for a Royal Commission on hold for now, to see if ASIC under James Shipton delivered.This article was first published by http://www.abc.net.auAuthor: Andrew Robertson