CORPORATE GOVERNANCE – AUSTRALIA

Westpac papers reveal trail of human, IT failure

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Original article by Aaron Patrick
The Australian Financial Review – Page: 1 & 4 : 28-Nov-19

Westpac’s confidential disclosures to Austrac show that it breached anti-money laundering and counter-terrorism financing laws some 29 million times. Austrac has accused the major bank of 23 million breaches, and the additional breaches cannot be prosecuted as they fall outside the statute of limitations. The documents also show that international money transfers with seven global banks had not been reported since 2011, due to problems with a computer system upgrade that began in 2010. However, Westpac did not become aware of the problem until May 2017, and it was not reported to Austrac until August 2018.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE

The Westpac money laundering scandal – Australia’s largest case of moral blindness?

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Original article by Michele Levine, CEO, Roy Morgan
Corporate Governance Update – Page: Online : 27-Nov-19

Before its money laundering scandal, Westpac was the ‘least distrusted’ of the big-four banks. That is about to change. In the immediate wake of Westpac being accused by the regulator of breaching anti-money laundering laws 23 million times, the question is, how could there be such a comprehensive failure of governance? Shareholders, employees, customers – and ultimately the courts – all want to know what went wrong. Was it intentional or did the breaches go unnoticed? Chances are we have witnessed corporate Australia’s largest case of moral blindness. On the march to prosperity following the GFC, many C-Suite executives and company directors felt liberated from the shackles of ethics, freed and legitimated by the need to rebuild shareholder value. Moral blindness, it seems, was sanctioned by this ‘prosperity imperative’. A decade later the Financial Services Royal Commission exposed moral blindness across the sector. Possibly the most spectacular revelation was the moral blindness exhibited by the then AMP Chair and CEO. Now it’s Westpac’s turn in the moral blindness spotlight. If any good is to come of the Westpac scandal it is the recognition that every corporate board needs an Ethics Committee to combat intentional wrongdoing. And moral blindness.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AMP LIMITED – ASX AMP, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

Westpac’s Austrac scandal differs from other institutions

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Original article by Robert Gottliebsen
The Australian – Page: 29 : 26-Nov-19

Westpac’s scandal is completely different to scandals that cost the jobs of top executives at the Commonwealth Bank, National Australia Bank and AMP in recent years. Westpac chairman Lindsay Maxsted says that the board had no prior warning of Austrac’s legal action or the specific nature of its allegations. However, Austrac alleges that Westpac was aware of concerns about payments linked to child exploitation as far back as 2013. The question arises as to whether CEO Brian Hartzer was aware of these concerns and withheld this from the board.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AMP LIMITED – ASX AMP

Investors demand action by Westpac

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Original article by Joyce Moullakis
The Australian – Page: 17 & 21 : 26-Nov-19

Nathan Parkin of Ethical Partners Funds Management contends that some at a high level at Westpac needs to be held accountable for the financial penalties that will arise from its massive breach of anti-money laundering laws. Meanwhile, one of Westpac’s 20 largest shareholders believes that CEO Brian Hartzer will not be to able to remain at the helm in the wake of the scandal. Westpac’s share price has fallen by 8.8 per cent since the scandal was revealed.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, ETHICAL PARTNERS FUNDS MANAGEMENT PTY LTD, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE, PLATO INVESTMENT MANAGEMENT LIMITED, OWNERSHIP MATTERS PTY LTD, AUSTRALIAN COUNCIL OF SUPERANNUATION INVESTORS INCORPORATED, INSTITUTIONAL SHAREHOLDER SERVICES INCORPORATED, NORGES BANK INVESTMENT MANAGEMENT, BLACKROCK INCORPORATED, THE VANGUARD GROUP INCORPORATED

Report finds ANZ tribal, slow and lazy

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Original article by James Frost
The Australian Financial Review – Page: 12 : 23-Aug-19

ANZ chairman David Gonski has commented on a governance, culture and accountability self-assessment that the bank prepared for the Australian Prudential Regulation Authority. Shortcomings revealed in the document, which Gonski notes was prepared on a confidential basis, prompted APRA to impose a $500 million capital charge on the bank. Gonski says some of these shortcomings include a penchant for seeking short-term fixes and a lack of accountability.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Culture to cost big three banks $500m

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Original article by James Fernyhough, James Thomson
The Australian Financial Review – Page: 1 & 21 : 12-Jul-19

The Australian Prudential Regulation Authority has imposed additional capital requirements on Westpac, the ANZ Bank and National Australia Bank following its review of their culture, governance and accountability self-assessments. They will have to set aside an extra $500m of capital until their customer remediation programs are completed and they have addressed all of the issues that emerged in their self-assessments. The increased capital requirements will have a slight impact on the three banks’ common equity tier 1 capital ratios.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

Westpac admits to being less mature on non-financial risks

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Original article by Richard Gluyas
The Australian – Page: 21 : 25-Jun-19

Westpac has begun to implement the recommendations arising from a self-assessment of its culture and governance, while it will also take on board any feedback from the Australian Prudential Regulation Authority. APRA requested the major banks to undertake a self-assessment in the wake of governance scandals at the Commonwealth Bank. Westpac has not released the full report of its self-assessment, but shareholders have been told that the review showed that its management of non-financial risks can be improved.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Move to block raids on worker funds

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Original article by Brad Norington
The Australian – Page: 16 : 3-Apr-19

The federal government is hoping to persuade the Senate to pass legislation to prevent unions from taking profits from workers’ entitlement funds before parliament rises for the election. One such fund called Protect is currently at the centre of an industrial dispute between the Maritime Union of Australia and stevedoring firm DP World; the latter wants to end its participation in the fund as part of a new enterprise bargaining agreement. With Labor unlikely to support the legislation, Industrial Relations Minister Kelly O’Dwyer will try to lobby crossbenchers for their backing.

CORPORATES
PROTECT, MARITIME UNION OF AUSTRALIA, DP WORLD, AUSTRALIA. DEPT OF JOBS AND SMALL BUSINESS, AUSTRALIAN LABOR PARTY, ELECTRICAL TRADES UNION, UNITED FIREFIGHTERS’ UNION OF AUSTRALIA, THE NATIONAL ELECTRICAL CONTRACTORS’ ASSOCIATION

NAB singled out for most Hayne pain

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Original article by James Thomson
The Australian Financial Review – Page: W1 & W4 : 5-Feb-19

Key executives of National Australia Bank have been criticised in the financial services royal commission’s final report, including CEO Andrew Thorburn and chairman Ken Hendry. Commissioner Kenneth Hayne says the appearances of Thorburn and Henry before the inquiry raised questions as whether NAB had learnt from its past mistakes with regard to the fee-for-no-service scandal. However, Hayne noted that the evidence of Commonwealth Bank CEO Matt Comyn and ANZ counterpart Shayne Elliott showed that they understand the challenges that their banks face.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, AMP LIMITED – ASX AMP, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, FEDERAL COURT OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY

Little time for strategy on busy boards: Mullen

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Original article by Damon Kitney
The Australian – Page: 13 & 14 : 7-Jan-19

Telstra chairman John Mullen says there is a greater degree of resentment towards those who make it to the top of the business world when compared to those in fields such as sport and entertainment. Mullen, who is also the chairman of Toll Holdings, is also concerned that company boards do not have enough time to deal with strategy, due to having to spend too much time on corporate governance issues. He is worried that it will be harder to attract quality people to become company directors in the future.

CORPORATES
TELSTRA CORPORATION LIMITED – ASX TLS, TOLL HOLDINGS LIMITED, OWNERSHIP MATTERS PTY LTD, INSTITUTIONAL SHAREHOLDER SERVICES INCORPORATED, AUSTRALIANSUPER PTY LTD, CGI GLASS LEWIS PTY LTD, AUSTRALIAN INSTITUTE OF COMPANY DIRECTORS, ASCIANO LIMITED