Commonwealth Bank of Australia (CBA) today confirmed it will implement all the recommendations contained in the Report of the Prudential Inquiry released this morning by the Australian Prudential Regulation Authority (APRA).
— CBA Newsroom (@CBAnewsroom) May 1, 2018
CBA Chairman Catherine Livingstone said: “Addressing the findings of the Report is a key focus for the Board and management to ensure that our governance, culture and accountability frameworks and practices are significantly improved and meet the high standards expected of us.
“Changes have been underway throughout 2017 at Board and operational levels, and have continued this year, helping to rebuild customer and community trust. This includes the process of Board renewal. Together they represent a significant change program and the APRA Report provides us with a clear roadmap for the hard work still ahead of us.
“The Board will now oversee a comprehensive response to APRA, using the Report to assess the adequacy of steps already underway, and to address the additional improvements needed to implement all its recommendations. We will also appoint an agreed, independent reviewer to report to APRA on our progress.
— Sky News Australia (@SkyNewsAust) May 1, 2018
“We understand the scale of change which is necessary and its seriousness in order for us to become a better, stronger bank for our customers, staff, regulators and shareholders.”
CBA Chief Executive Officer Matt Comyn said: “We have embraced the Report as a critical but fair assessment of the issues facing us and we will act on its recommendations, and the requirements of the Enforceable Undertaking, in an open, transparent and timely way.
— CBA Newsroom (@CBAnewsroom) April 30, 2018
“Our current change priorities are consistent with the Report’s recommendations. We now have a detailed roadmap for ongoing change and we will work with APRA to ensure we implement all of the Report’s 35 recommendations.”
APRA Prudential Inquiry into CBA: Overview of Recommendations and CBA Change Priorities
APRA Levers of Change*
CBA Change Priorities
· More rigorous Board, Executive Committee level governance of non-financial risks.
· Development of exacting accountability standards reinforced by remuneration practices.
· Undertaking a substantial upgrading of authority and capability of the operational risk management and compliance functions.
· Injection into CBA’s DNA of the “should we” question in relation to all dealings with and decisions on customers.
· Cultural change that moves the dial from reactive and complacent to empowered, challenging, striving for best practice in risk identification and remediation.
· Strengthening the governance and management of non-financial risks at the Board and executive level.
· Changes to remuneration policies and practices to ensure greater accountability for risk, compliance and customer outcomes.
· Strengthening capability in operational risk and compliance throughout the Group supported by positive, transparent regulatory relationships.
· Renewed focus on listening to customers and improved systems and procedures for reporting and resolving customer complaints.
· Empowering staff with the tools and processes they need to manage risk better including embedding three lines of accountability as a consistent operating model.