One CEO a-changing, two CEOs a-changing

SOMETIMES a coincidence really is just a coincidence, even when you get two or three on the same day.

The executive changes at the Commonwealth Bank, ‘coincided’ with the change of CEO at regional bank, the Bendigo & Adelaide, and the change of CEO at the country’s best-known non-bank financial institution, the AMP.

If the three actually coincided with anything, it was with the Banking Royal Commission taking a breather after Friday’s lacerating summation of its journey so far.

The clearest and cleanest move was at Bendigo, where retiring CEO Mike Hurst really is just retiring at 60 after nine interesting years and is being succeeded by the most obvious internal candidate, Marnie Baker, in exactly the same way he moved into his predecessor Rob Hunt’s office in 2009.

Bendigo said it had conducted a “comprehensive search process”, covering both external and internal candidates, but it really would have been extraordinary for it to have been anyone but Baker.

Bendigo with its strong community franchise really needs to ‘grow’ its leadership internally. It neither wants nor needs some ‘hotshot’ to fly in from Wall St or London to remake it to the latest global fad.

Bendigo has certainly ‘grown’ Baker, who has been at the bank since 1989 and in the executive team through the leaderships of both Hunt and Hurst since 2001.

On one level, what is happening at CBA happens at every big bank when the leadership changes. Most obviously and most usually, the ‘losing’ internal candidate – in this case institutional bank head Kelly Bayer Rosmarin – exits.

Apart from the two obvious drivers – the most understandable, that such a ‘loser’ is very good leadership material and usually both wants and can find such a position somewhere else; and is clearly the case with Rosmarin – this practice has become rather too conventional.

This gets absorbed into the other main driver: a new CEO wants to gather HIS (or HER) leadership team. And a board and especially the chair wants that.

This takes on a portfolio of added flavours in the specific context of the CBA in the specific context of the Royal Commission – sparked mostly, to some extent unfairly, by the CBA.

There’s no doubt that in performance and indeed structural and strategic positioning terms, Ian Narev has been an outstandingly successful CEO. The ‘downside’ of his term and the reason for his early departure has been in the ‘cultural space’.

The first part, the success, really pointed to a Bendigo-like internal successor. The second was the basis for an argument in favour of an outsider.

Chairman and board went for the internal option, retail bank head Matt Comyn. The deciding factor it would seem was the way Comyn convinced them he would be the best of both possible worlds – an internal change agent.

Even if – especially if? – much of the change required has to come in areas which were previously under his direct control.