It doesn’t get much worse for a bank to be told that it has a “total disregard” for the law and regulators. Nor does it get more serious than a senior executive, Andrew Hagger, being called out for behaviour that shows “disrespect” for the regulator.
Nor does it get much worse for a regulator to be told it lacks authority and panders to the big end of town.
But so it was for National Australia Bank and the Australian Securities and Investments Commission in the closing submission from counsel assisting the Hayne royal commission into the fifth round of its inquiry which focussed on superannuation.
The disgust was palpable.
“It is open to the commissioner to find that the misconduct in respect of plan service fees, adviser service fees and grandfathered commissions may be attributable, at least in part, to the culture and governance practices within the NAB group,” the findings say.
Misconduct, breaches, trustee conflicts and falling below community standards were just a few of the words used to describe NAB and its behaviour over the fees for no service scandal.
These are words the board - particularly chairman Ken Henry - needs to consider carefully.
National Australia Bank senior executive Andrew Hagger criticised.
Photo: Louise Kennerley
But if you were looking for a reason why NAB behaves this way, the royal commission’s closing submission into this sorry tale suggests we should look no further than the corporate regulator.
Toothless, lacking in authority, relying far too much on enforceable undertakings, which are akin to slapping a big institution with a wet lettuce leaf, instead of issuing legal action and too easily persuaded by the big end of town about covers it off.
“The entity giving an enforceable undertaking is not required to disgorge the profits of its conduct, may not even be required to remediate customers for loss they have suffered as a consequence of the contravening conduct, does not incur a pecuniary penalty that would be calculated to deter any future contraventions and does not attract the condemnation of the court and the attendant negative publicity," the submission says.
What came out in the latest round of the royal commission should cause a lot of soul searching for banks, trustees, the regulator and the newly-minted Morrison government.This article was first published by https://www.smh.com.au/
Author: Adele Ferguson