Still, these are strange and difficult times in NABland, and no one is likely to worry too much about this temporary concentration of power given it is the universally respected Chronican straddling both roles.
Indeed, the dual jobs might actually help “Fixit Phil” cement his early message to bank staff, which was pretty simply summed up in his first note to NAB’s top leaders when he took the big job last Friday.
“The royal commission is right. There is a big gap between where we are today, and where our customers, shareholders and the community expect us to be,” he wrote.
Chronican’s determination to clean up outstanding customer remediation issues is sensible.
Without resolving these problems it will be impossible to start restoring the bank’s reputation.
It will also be very difficult for the next CEO to start laying out a strategy – even if we are at least 12 months from that strategy being known, allowing for a six-month appointment process and then an inevitable getting-the-feet-under-the-desk honeymoon period.
While the process of choosing the new chief executive remains under the control of director Ann Sherry, there’s no doubt she will lean for advice even more heavily on Chronican following his appointment as chairman.
Sherry has spent the last few weeks consulting investors about what they want to see in a new CEO; the debate about an internal candidate versus an external choice naturally was front-of-mind.
But with Chronican’s appointment she gets another frame of reference – finding a CEO with complementary skills to the chairman is much easier when you’ve locked in that role.
No doubt Chronican himself will have strong views on the type of person he will be best suited to work with to drive NAB’s cultural reset.
The CEO’s appointment will of course create a board vacancy, given that will be the signal for Ken Henry to formally step down.
This will allow board renewal to become a part of Chronican’s cultural change agenda.
In the excitement of NAB losing its CEO and chairman on the same day, it may have been forgotten that it was the wider board that failed to deal with the festering fee-for-no-service scandal over a ridiculously long period.
Reiterated its frustration
The royal commission hearings showed that less than 10 months ago – as recently as last May 31 – the NAB board received a letter from the corporate regulator suggesting the bank had failed “to engage at all with the serious concerns” of ASIC over customer remediation.
By then, this problem had been running for three years.
The board minutes noted the board “reiterated its frustration over the length of time taken to agree a methodology with respect to adviser service fees and to remediate customers” but the matter still took some months to resolve.
“Do you accept that the board should have stepped in earlier?” Rowena Orr QC asked Henry in the hearings.
“I wish we had, let me put it that way,” Henry replied.
Six of NAB’s nine current directors were on the board before 2016; Chronican joined in May 2016, and Sherry in November 2017.
Last week, acting CEO Chronican told his top 100 leaders: “We are the bank’s most senior leaders. We need to run the bank – and we need to change it. We need to own this. It starts and stops with us.”
In the coming months, chairman Chronican will need to have a similar conversation around the board table.