This time last year, the Commonwealth Bank of Australia was in the doghouse, the poster child for the financial services industry’s worst behaviour, as unveiled by the banking royal commission. Yet Matt Comyn’s leadership in 2020 has gone a significant way towards helping the nation’s largest lender restore its public standing.
While Comyn is CBA’s chief executive he’s also chairman of the Australian Banking Association, and was in close contact with cabinet ministers, both as a sounding board on general economic conditions and to discuss the government’s rescue packages in response to COVID-19.
“Matt … played a key role working with APRA [the Australian Prudential Regulation Authority] and the government to ensure that impacted households and small businesses were able to access loan deferrals at the height of the crisis,” Treasurer Josh Frydenberg says.
“Through his role at CBA he has provided the government with critical real-time data to inform decision-making.”
All the big banks agreed to defer mortgage repayments for customers affected by COVID; CBA went further by agreeing to hold off foreclosing on delinquent mortgages until September next year. CBA has grown its share of the mortgage market through the pandemic, winning Millennial customers through its partnership with buy now, pay later platform Klarna.
Comyn’s highly visible role during the pandemic contrasts with the low profile he kept during his first two years in the job. “Banks really only have trouble when customers don’t have confidence in them,” says Jefferies banking analyst Brian Johnson. “He’s been very aware of that, and on the front foot in dealing with it.”
One of this year’s enduring lessons involves the leadership needed to withstand a once-in-a-century crisis, and this has been demonstrated by Woolworths chief executive Brad Banducci. For significant stretches of the pandemic, supermarkets were among the few venues people were allowed to visit. All were hit by an initial wave of panic buying, with customers lining up for essential items such as toilet paper and flour. Through all this, shelves remained stocked and extended shortages were rare, even as supply chains for goods collapsed.
Banducci has for years focused on expanding Woolies’ digital capabilities, and that paid off during this time. He moved quickly to hire thousands of extra staff and double the home-deliveries capacity to cope with heightened online demand. Encouraged by the federal government, Banducci also led Woolworths to suspend its rivalry with Coles and other chains, to agree to consistent processes on buying limits and safety standards.
It’s not just Banducci’s strong execution at the retailer that sets him apart. When harsh restrictions were imposed by the Victorian government during its mid-year COVID outbreak, including requirements that staff levels in warehouses be cut by two-thirds, Banducci pushed back, concerned it would put pressure on national supply chains and risk shortages of key goods by Christmas. The government conceded, allowing for more workers to be present in distribution centres – and the feared shortages were averted.
“He has done a really good job,” says Anton du Preez, the deputy chief investment officer of fund manager Pengana Capital. “He is definitely a few steps ahead from a strategic point of view, in the way he manages the business and the investments he has made. And he was one of the few CEOs to take on a visible leadership role during COVID, addressing all stakeholders including team members, suppliers, customers and shareholders.”
Woolworths board director Siobhan McKenna says Banducci’s focus on customer safety and the company’s 200,000 employees was notable. It included defusing disquiet among shareholders when booming sales didn’t translate into higher profits, thanks to costs incurred to ensure in-store safety. “Brad explained to shareholders that doing the right thing for Australia was the most important thing this year,” says McKenna.
Australia’s institutional investors – who collectively manage trillions of dollars – have long been criticised for their cosy relationships with corporate boards and management teams. Not in 2020, when shareholder uprisings led to overhauls in the senior ranks of two of the nation’s best-known companies. Shareholder anger forced the resignations of AMP chairman David Murray and fellow director John Fraser, a former federal Treasury secretary, over the company’s handling of a scandal involving executive Boe Pahari, who’d been promoted to the second most senior role at the company despite facing allegations of sexual harassment.
Investor fury also led to the ousting of Rio Tinto chief executive Jean-Sebastien Jacques and two subordinates after the company blasted 46,000-year-old caves of enormous archaeological and cultural significance in Western Australia’s Pilbara region, without the consent of Indigenous landowners, in order to access $135 million worth of iron ore. The change at Rio occurred even as the company was performing well, posting some of the strongest profits in its history.
The usually low-profile Allan Gray fund manager Simon Mawhinney led the investor charge against AMP, while the change at Rio Tinto was led by AustralianSuper’s Ian Silk and the federal government’s Future Fund, with Aberdeen Standard’s Camille Simeon another vocal critic. “Australian institutions are recognising that with great power comes great responsibility,” says Susheela Peres da Costa, head of advisory at governance firm Regnan. “Having worked with lots of managers over the years, I know some of the hardest-hitting critique happens hidden from public view.”
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