Retaining the lessons of the Royal Commission

It is now more than half a decade since the banking industry was confronted with the hard truths of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry’s final report.

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Commissioner Kenneth Hayne handed his report to the Federal Government on February 4, 2019.

"What we learned leading up to and during the Royal Commission is that in fact, the two most important skills are empathy and emotional intelligence.” – Ben Steinberg

As difficult as it was, the Royal Commission and its findings continue to shape how we do things at ANZ. Importantly it also created a muscle memory we should not allow to fade.

For those of us involved in the bank’s response, we must retain those lessons and avoid repeating the mistakes of the past.

At a recent internal ANZ leadership conference, I spoke to three people at the centre of the bank’s Royal Commission response - our former General Counsel, Bob Santamaria, Regional Executive for the Pacific, Sarah Stubbings, and Head of Lending Services, Corporate & Commercial, Ben Steinberg.

We discussed our experience, what we learned and, importantly, how the bank changed as a result.

How did we get here?

The Royal Commission featured case studies involving bad experiences some Australians had with their banks. But why did these problems occur and how can we ensure they don’t recur?

Santamaria said ANZ’s response was driven by Chief Executive Officer Shayne Elliott’s move to establish a clear principled approach.

“Early on, Shayne sent an email to all ANZ (employees) saying we will never seek to defend the indefensible. That was a moment of outstanding leadership.”

The email also made a huge impression upon Sarah Stubbings. At the time she was Portfolio Lead, Responsible Banking where she oversaw large-scale customer remediation programs.

Stubbings, who took the stand to discuss an ANZ home loan product, said once Elliott sent the email she felt supported knowing she would not have to “defend the indefensible”.

“The support Bob and the legal team put around us was second to none. We had amazing legal support and the calmness they created… when we were anxious, they were always calm,” Stubbings said.

Facing the commission

Often individual bankers in the witness box were not involved in the historic issues being examined. In many cases it took a toll on them as individuals.

Ben Steinberg was asked to discuss the bank’s treatment of some agricultural customers and was in the witness box for close to 10 hours across three days - the most time of any witness at the hearings.

“If you stacked my five affidavits on top of each other, they would have been taller than I stand. So that was pretty intimidating,” he said.

“You come out of the witness box on the first night and Commissioner Hayne directs you to not talk to anybody about your witness statement. My hearings were in Brisbane, so you go back to your hotel room and you're feeling pretty ordinary.”

Bob Santamaria said banks were struggling to retain the necessary human attributes as they became increasingly large and complex organisations.

“One of the things to come out of the Royal Commission, was a lot of the problems that arose for banks and their customers came out of the complexity in banks – and the complexity in their products,” he said.

Be humble

An important element of Santamaria’s leadership was how blunt he was about the banking industry’s need to be humble in the face of possible wrongdoing.

“We had all this negative press, but the banks didn’t seem to get it,” Santamaria said.

Steinberg added: “At the end of the day people were angry. They were anti-bank because of the decisions we made in the 1980s, the 1990s and the early 2000s. I had some sympathy for them and the position they found themselves in. I think it's important for us as a bank to keep remembering that – we should never forget.”

“We used to think that the most important thing in banking was having technical skills,” Ben Steinberg said. “And what we learned leading up to and during the Royal Commission is that in fact, the two most important skills are empathy and emotional intelligence.”

Santamaria summed it up when he said the ability to stop a repeat of the Royal Commission lies with all of us.

“The most important message to take out of this is, do not - when something happens in the future - contribute to something which might lead to Royal Commission number two.”

“You might see something that is bad for one of our customers … whatever you do, go and talk to one of your colleagues. Talk it through with them,” Santamaria said. “If you can see there's something bad for our clients there, do not walk by.”

Stubbings said the commission led to broad cultural change within the industry – but also at a more personal level. The lessons of the commission now form part of her every day decision making and how she communicates.

“I make decisions knowing that someone could look at this in 10 years’ time. I think about that a lot and it reinforces the importance of purpose - living, breathing our purpose.”

Stephen Ries is General Manager ESG and Stakeholder Engagement within Communications and Public Affairs at ANZ

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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