Will the BEAR miss the real planning culprits?

The executives most responsible for the financial planning scandals which have impacted the banks would not necessarily be captured by the Bank Executive Accountability Regime (BEAR), according to the Finance Sector Union (FSU).

Giving evidence before the Senate Economics Legislation Committee, FSU national industrial officer, Alicia Clancy said the BEAR appeared to mostly capture the most senior executives within the various banking regime when the real managerial culprits existed further down the line.

“… the best way to describe it is that BEAR would only capture, as well as the non-executive directors, the CEO, CFO, CRO and CIO, as the four accountable people. There would be maps that effectively track back to these people, but you really have those four roles,” she said.

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“This would lead to a scenario where the group executive of National Australia Bank wealth was not necessarily responsible or had any accountability lines for financial planning scandals,” Clancy said. “The process of cultural and systemic problems that can be capped at a certain point, particularly at that group executive level, could lead to a scenario where those group executives can have a 'We don't know' attitude towards what happened below them, providing plausible deniability up the chain and capping it.”

She said that such people had “no capture in the BEAR” adding, “they can provide plausible deniability further up the chain, and the cultural change we're looking for is not going to happen.”

The FSU representatives told the committee that in the case of the Commonwealth Bank it was ridiculous to conclude that the activities of 50,000 employees could come down to four accountable people.

FSU national assistant secretary, Nathan Rees also pointed to the level of turnover in senior banking executive roles and claimed this also posed hurdles.

“If you are conducting a retrospective analysis of a breach that occurred a couple of years ago – say, over a 12-month period – there may have been two or three people through particular roles critical to the breach,” he said. “How you then apportion the accountability is a difficult question. It is something that compliance regimes wrestle with all the time. But in this sector I think it is particularly acute.”

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