CANBERRA, May 1 (Xinhua) -- The board of one of Australia's leading four banks has been put on notice by Treasurer Scott Morrison following a report which found it had become complacent and unaccountable.
The Commonwealth Bank's (CBA) "continued financial success dulled the senses of the institution," according to a "damning" eight-month investigation by the country's leading financial regulator, Australian Prudential Regulatory Authority (APRA).
The report, which centered on the CBA's governance, accountability and culture frameworks, identified widespread complacency and a lack of incentive to improve customer outcomes.
Morrison said APRA's report showed the bank's remuneration structure was equivalent to "money for jam," with senior executives still getting bonuses "even when things go wrong."
The Treasurer said he expected CBA board members to resign.
"A number of board members and executives have already gone," he told reporters on Tuesday. "My understanding is there will be others who will be leaving and that's what I expect to happen."
Morrison said APRA's findings on the CBA, handed down on Tuesday morning, were damning.
"It found there was a complacent culture, dismissive of regulators, an ineffective board that lacked zeal and failed to provide oversight, a lack of accountability and ownership of key risks by senior executives," he told reporters.
"A lack of accountability is a common theme. An inability to identify who is accountable when things have gone wrong and inadequate remuneration outcomes for adverse risk and compliance outcomes."
Morrison also warned the executives and board directors of all major Australian companies to "step up" and take their jobs seriously.
"It goes to the heart of what responsibilities of board directors are," Morrison said.
"This should be a wake-up call for every board member in the country, particularly those who are the custodians of the savings shareholdings of millions of Australians, they expected better those shareholders of board members and they have been let down, terribly."
The APRA's report also included recommendations such as increased accountability which had diminished due to an "overly-collegial and collaborative working environment."
Morrison said he had called CBA chairman Catherine Livingston to Canberra to discuss the bank's Austrac money laundering scandal on Aug. 8 last year, almost three weeks before the APRA initiated its inquiry into the bank's governance, culture and accountability on Aug. 28.
Chris Bowen, the Shadow Treasurer, said the CBA investigation should have been broadened to include the entire Australian banking sector.
"The APRA inquiry into the CBA was launched in August last year, that's 18 months after Labor called for a Royal Commission into our banks and financial services," Bowen told the media on Tuesday afternoon.
"We very much welcome the report of APRA into one bank, but we should have received the final report into Australia's entire financial services industry a long time ago."
