Time will tell story of CBA’s choice
AT ALMOST any point in the Commonwealth Bank’s 106-year history, the elevation of 42-year-old rising star Matt Comyn to the top job would have been not simply uncontroversial but universally acclaimed.
The CBA is Australia’s biggest and most profitable bank and in recent times also easily the most successful.
A huge part of that has been the basic retail bank – the part that deals with you and me – which Comyn has run since 2012.
If anyone was the “natural successor” to dynamic CEO Ian Narev, it was Comyn.
Until August 3 last year to be exact. That was the day the news of CBA’s 53,700-odd alleged money laundering infractions exploded into the public arena.
The CBA, Narev and his predecessor, Ralph Norris, had emerged seemingly unscathed from a series of, to use a neutral term, “customer issues” – Storm Financial, CommInsure, financial planning rip-offs and so on.
But AUSTRAC’s money laundering allegations seemed to finally snap the twig – to cut through.
Suddenly, “everything” changed, in relation to the CBA, the position of its CEO and the four big banks more broadly.
On August 2, Narev was riding high and looked set in in his near $10 million job for some years yet. On August 4 he was heading for the door and recently appointed chairman Catherine Livingstone started the search for a new co-leader.
More broadly, the CBA would find itself in the unique, and humiliating, position of having an APRA initiated inquiry into its “culture” – read failed or toxic culture.
The CBA and its big bank peers were then also irresistibly headed for the first royal commission into banking in Australia in 80 years.
Thank you very much, pal, (other) bank CEOs could well have muttered.
That makes Monday’s appointment at the very least “courageous” – in the normal sense of the word and the
Yes, Prime Minister version. For Comyn is not just any old “CBA insider”, but in comparison with his peers the ultimate insider. Apart from one very brief midcareer move outside, he’s been with the CBA almost his entire working life.
If “culture” is the problem, it seems at least counterintuitive to select someone to lead the bank through the coming regulatory and potentially seminal structural turmoil – someone who is not only steeped in that culture but has self-evidently been a major, senior executive contributor to creating it.
Clearly, the chairman does not agree. She told me there were aspects of the CBA’s culture that were negative but there were aspects that were positive.
Her explanation for the Comyn selection is that he is the best person to sustain the momentum of the, to paraphrase, “good culture”.
To my mind there are two ways to look at both the appointment and the Livingstone explanation.
One is that both chairman and board just don’t get it – that you can’t disaggregate “culture”.
The other way is that the chairman and board have actually managed to potentially successfully merge the two conflicting elements of the complex challenge they were presented with – how to deal with all those “issues” without at the same time crippling the bank’s performance.
We shall see.