In praise of unsmiling Hayne

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'What we've got here is failure to communicate.' — Cool Hand Luke, 1967

I spent Tuesday evening in my local pub with a retired professor of social work, and coming a miserable second in a disputable round of trivia, won by a table of barristers, or more probably baristas.

A general view of an ANZ bank branch (Robert Cianflone/Getty Images)It was a wretched end to a lively conversation between myself and the said retired professor who had asked for my opinion and then explained to me it was incorrect; that my optimism and delight in Hayne's refusal to smile, shake hands, pass over his printed volumes of his final report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry to, or even look at Deputy PM Josh Frydenberg during their exquisitely awkward and politely disdainful 'press event', aired on the news 1 February, was, in other words, mistooken.

My friendly academic, in whom I am generally very well-pleased, explained to me and to his neighbour, the sympathetic professional artist who painted my portrait (on commission) for the Archibald in 1997 when my opinions were sometimes respected, made a diligent and well-argued case that Hayne had failed in his task which, the retired professor thought, was to 'tackle bank structure'.

With the greatest of respect, notwithstanding the surge in the stock exchange that followed the report's publication, and despite the criticisms from even those such as John Warhurst and so many others on Twitter and other social media, this was not the job his former honour had to do. To imagine otherwise is to misunderstand both the law, and what it is 'meant' to do in the hands of those who are judicially trained.

The Hon. Kenneth Hayne AC was appointed to the Victorian Supreme Court in 1992, then to the High Court in 2007 (by John Howard), stepping into Sir Daryl Dawson's patrician shoes and setting an admirable record of decision-making, before retiring in 2015. The Hon. Kenneth (if I may so familiarly call him) came from a classic Melbourne background (though mistakenly born in Gympie, Queensland): Scotch College, Melbourne University, Exeter College, Oxford-educated and a former Rhodes Scholar (smarter and harder-working than the Hon. Tony Abbott, former PM).

What are 'mistooken' are the expectations of a royal commission, which change nothing because they are not meant to do so: think the royal commission into Aboriginal deaths in custody, now more than 31 years ago, and its 'influence' on the massive improvement in the rate of imprisonment and premature deaths of Indigenous children, women and men throughout this proud nation; and the long-lasting effects of the Fitzgerald Inquiry in Queensland. And think again, and remember the spit-hooded boy who graduated from Donvale in the NT, still containing a 100 per cent population of Indigenous boys.

A 'royal commission' is just an investigation which makes recommendations that can't be acted on unless either its creator, the government of the day, the parliament of the day, or a judge in a court, after established constitutional practices and conventions (though these have been mangled of late), so decide.

 

"This obvious approach may be, perhaps, the only way to ensure there is no reasonable likelihood of co-opting that office holder, and that there is, as there must be, an external monitoring role."

 

A royal commission is described in a 1902 act as having 'powers', but these are only to cause summons to be issued to make people appear and give evidence or product documents; swear oaths, and go to jail if they refuse either. But they only conduct executive inquiries into and seek to establish facts because governments cannot or will not do so in the ordinary course of business. And they can ignore them.

This particular royal commission was, we now know, provoked by a Four Corners expose of a sales culture in the Commonwealth Bank and its failure to protect the interests of its customers, its ethics, governance rules and even the law. Its terms of reference, once the banks themselves wrote them, were designed to be limited and the commissioner had only a year to do what could be done with them and his little band of barristers.

And they did it brilliantly, in my humble opinion — because the honorable commissioner was a judge in the best tradition of independence of the courts and the judiciary, and an understanding of the law's purpose — to create order out of the morass of human greed, selfishness, risk-taking and influence-peddling that comes with mixing with the moneyed and those who worship it.

The rule of law is about imposing order and the public trust that institutions consist of human beings who care about other human beings and the common good. What a challenge, given the dirt and the sense of entitlement even the banks could not resist exposing during the hearings process.

*****

My closest legal colleague of these days of my twilit legal career and I had a chat as I was writing this piece. She proposed the following fix for the whole system. I offer it for the public to demand, in the lead-up to the nastiest election I have apprehended for some years.

My very senior and downright conservative employment lawyer friend says that every bank (and similar) should be obliged to fund an 'ethics and compliance' position, which is also an internal whistleblower position, reporting to ASIC and APRA and to the ATO, with a dotted line report to its board (as an ex officio member), who must present a report every quarter, and who is entitled to conduct adequately funded and resourced investigations under the aegis of the relevant authority, if and when something concerning arises, and the hosting body fails or refuses to act appropriately.

Effectively the conscience of the community, nay the 'soul' of this 'legal person' with its tellingly-named 'human resources' approach to its staff, and its profit-oriented KPIs, this modestly remunerated officer would sit within her or his bank for a fixed term, terminable only by an address of both houses of Parliament — rather as a judge can be only removed for an inconvenient decision or alleged misconduct.

This obvious and, we joyously agreed, simple approach may be, perhaps, the only way to ensure there is no reasonable likelihood of co-opting that office holder, and that there is, as there must be, an external monitoring role. As they may sit in on the board, ex officio, they could make recommendations based on the conduct of executives, for example, on whether or not bonuses should be awarded having regard to their upholding standards of ethical behaviour and not with regard to upholding the value of shareholders.

She says, am I a genius? and I say, the Honourable Haynes would never suggest any such simple, smart, cost-effective remedy, but might watch, and wait, for the response to such a proposal. When we embraced 'corporations law', we abandoned not only humanity, but also the idea of the true value of the human person, as employee or client or investor or insured. It is one way to reinvest authority not in a 'legal person' with no soul, no concept of values other than shareholder entitlements, and no bottom to kick if 'the culture' it creates goes rotten.

Banks would die in a ditch to stop this. And neither party will support it. But one of them should. What we have here, is a failure to communicate a universal truth.

 

 

Moira RaynerMoira Rayner is a barrister and writer. She is not a member of any political party. She is a barrister and solicitor of 47 years standing who was once accused — and acquitted — of attempting to pervert the course of justice. She believes only way to prevent vast, interlinked power relationships from being misused is to make their exercise transparent, publicly accountable, supported by legislation. 

Main image: Robert Cianflone/Getty Images

Topic tags: Moira Rayner, banking royal commission

 

 

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Existing comments

If Ken Henry believes in purgatory and redemption, or even the Buddhist idea of the successful man of the world who retires to or takes a sabbatical in a monastery to learn to be wise, perhaps he could be the inaugural modestly-rewarded ethics and compliance officer for the National Bank. Surely someone who served his country by writing a landmark quasi-royal commission report on the national tax system should be offered a second chance.
roy chen yee | 08 February 2019


I am dismayed at the banking share prices riding high as though there is no remorse but only gratification
Noel Jeffs | 08 February 2019


When reading this article I was reminded of the role of Visitor in nineteenth century institutions such as asylums, churches, universities. Moira seems to be proposing something similar for our banking system with the purpose of maintaining oversight that ensures fair practice and adherence to the norms of good behaviour.
Paddy Byers | 08 February 2019


I watched a rather chastened Ken Henry on ABC's 7.30 Report last night. Both CEO and Chairman of NAB have resigned after particular criticism in the Royal Commission report. I was struck, at the time of the Royal Commission hearings, at Henry's lack of respect towards counsel's questioning. I'm not even sure it's a love of money which drives those in senior positions in the banking sector. Perhaps it's fitting in to a very strong ethic of power. Humility doesn't sit very well in that environment. And, of course, those very rare people who can display humility in such a place exert enormous influence.
Pam | 08 February 2019


"When we embraced 'corporations law', we abandoned not only humanity, but also the idea of the true value of the human person, as employee or client or investor or insured." This Moira, is the best description of our health service I have read in a long time - for 'corporations law' read "Medicare". Thank goodness we are saved by the good lawyers and good doctors who have not been sullied by the pervading grubbiness of some in the systems instituted to serve the people rather than self interests.
john frawley | 08 February 2019


Thank you Moira for your contribution. I concur. From what I have seen via TV news reports, like any other ordinary Australian, I have admired the thorough work of the Honourable Haynes and his Royal Commission team, and sincerely hope and pray that we see justice for everyday mums and dads, not more profits for the fat cats and shareholders. Commitment to change the system and Action to bring offenders to justice is what we need.
Christine Choo | 08 February 2019


The description of a Royal Commission being like a trip to the toilet is as accurate as ever. First there is a resounding report;and then the whole matter is dropped. So the RC did its job according to definition. And now it is up to all with vested interests to competitively carve up the road kill. To call it a communication problem is misleading. Sure, the mendacious PR and spin industry will act like the oldest profession,doing anything for a bob. You pay them and do what they tell you. Henry enacted this on the ABC referring to the lapse in 'meeting customer standards'. So if your customers or shareholders want you to act unethically you are justified. Pull the other one. Henry showed no connection with morality nor ethics. There was nothing about truth, justice, stealing or lying in his whole presentation. As for suggesting he was meritorious in helping the bank fix itself by his assisting with the search for a new CEO. He should have scratched himself. Who sets the character criteria? Has Ken demonstrated he has the skill set for the job? Or is he hanging around because he can't he simply keep his hands off it?
Michael D. Breen | 08 February 2019


I agree the banks needed a big shake up, however, I feel the honest, hard working independent Mortgage Brokers like my husband are thrown in the same basket with the banks. Independent Mortgage Brokers wear all the costs, receive no pay for many invested hours and at times may have to repay their Commission if the client has re financed within 18 months. The banks never lose! Who defends these Mortgage Brokers who actually work for the client NOT the bank. Are we going to create further unemployment with these blanket decisions.
Greta Caneva | 09 February 2019


Yet another wonderfully rich contribution from Moira. It gladdens my heart to read your contributions. And yes His Honour Hayne and his team do great justice and a great service for our nation and to the task despite a less than half hearted support from Government and even less interest, other than belated electoral damage control. The institutional response is lip service by the use of soft and generic terms such as ‘customer service’ pledges, whereas much more is needed to right the wrongs and call perpetrators to legal account and provide compensation. Let us remember it was just a few very brave people who stood their ground, as was case with the RC into Institutional Sexual abuse. In both cases we owe it to these people and the victims to not be hoodwinked into accepting the perpetrators and the Institutions in both enquires are now redeemed after tossing a few people overboard as token sacrifices and saying sorry.
David | 09 February 2019


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