Westpac names new chairman
SYDNEY: Former Barclays Plc chairman John McFarlane has come out of semi-retirement to help Australia’s oldest bank restore its battered reputation after it was accused of the nation’s biggest breach of anti-money-laundering laws.
Scottish-born McFarlane, 72, was yesterday named chairman of Westpac Banking Corp, which was plunged into crisis in November when it was sued over 23 million money laundering breaches, including failing to detect payments linked to child abuse.
“People close to me know that on my return to Australia, I hadn’t intended to take another major leadership role,” said McFarlane, who was chief executive officer of rival Australia & New Zealand Banking Group Ltd for a decade.
“However, I’m passionate about the Australian banking sector, and I’m excited by the challenge of returning Westpac to its place as a leading global bank.”
McFarlane is one of the most experienced international bankers around. He stepped down as chairman of Barclays after four years in 2019, having played a key role in the overhaul of the UK banking giant.
He fired former CEO Antony Jenkins just months into his tenure, replacing him with ex-JPMorgan Chase & Co executive Jes Staley.
McFarlane oversaw the resolution of a host of misconduct issues, including the mis-selling of payment protection insurance, the Libor-fixing scandal, foreign exchange and mortgage bonds.
He also continued to publicly back Staley, helping the CEO survive a yearlong regulatory probe into his multiple attempts to unmask a whistle-blower. Staley escaped with a fine rather than losing his job.
“This is a good appointment,” said Mark Delaney, chief investment officer of AustralianSuper, the nation’s biggest pension fund with A$180 billion (US$124 billion) of assets under management.
“John McFarlane’s significant banking experience is important, particularly in an industry going through significant change.”
The first item on McFarlane’s to-do list at Westpac will be leading the search for a permanent CEO after Brian Hartzer resigned in the wake of the scandal.
Acting CEO Peter King deferred his retirement to steady the ship, and the bank is looking at both internal and external candidates for the role.
“The appointment of a world-class CEO can take time,” McFarlane said. “In the interim, momentum is important. I will work closely with Peter and the board to continue to make any changes necessary. People should expect to see positive change during this period.”
“My focus initially will naturally be on resolving the company’s current issues but equally important, to position it as quickly as possible for long-term success,” he said in the statement. “To some extent, the internal and external challenges ahead for Westpac are not dissimilar to those in my last five financial institutions.”
During a 44-year career in financial services, McFarland also served as chairman of UK insurer Aviva Plc from 2012 to 2015, and been a director at shopping mall giant Westfield Corp and its successor Unibail-Rodamco-Westfield SE.
At Westpac, he will also need to oversee a revamp of governance arrangements after the financial crimes agency said “inadequate oversight” by the board and “indifference” by senior management led to the systemic money-laundering breaches.
The bank has repeatedly apologised, promised to raise standards and appointed an independent panel to review board risk management.
It told a recent court hearing it intends to admit to a large number of the contraventions and is working with the Australian Transaction Reports and Analysis Centre on an agreed statement of facts — the first step toward any settlement.
The penalty could top A$1 billion, according to analysts.
McFarlane will commence his role as non-executive director next month, subject to regulatory approvals, and take over as chairman April 2.
Westpac gave no details yesterday of McFarlane’s remuneration.