Banking royal commission: NAB misjudged Kenneth Hayne

By August, an examination of NAB’s superannuation trustee NULIS kicked off speculation over whether criminal charges could ensue, as the bank became engulfed in the fees-for-no-service scandal.

Throughout the saga, worrying signs emerged that the bank was not taking the allegations as seriously as they should have, including Thorburn’s detailed discussions with The Australian Financial Review.

“Our people’s behaviour, commitment and ethics is overwhelmingly positive,” Thorburn told us in July, as he emphasised the bank’s bigger threat of disruption and a $1.5 billion restructure and job cuts.

Privately, including at a corporate sporting event with the business media in August, Thorburn and the NAB executive team were playing down the potential fallout from Hayne.

Investors speaking to the Financial Review on Tuesday pointed to NAB chairman Ken Henry’s insistence to ram through executive pay changes last year which resulted in an unprecedented 88 per cent protest vote as more evidence the board “didn’t get it” and that “half the board now needs to go”.

Henry and Thorburn’s appearance before the commission only proved to infuriate Hayne who obviously didn’t think much of their focus on developing the bank’s purpose to “back the bold” in contrast to ANZ CEO Shayne Elliott, who Hayne praised for a major project to overhaul the culture of his bank.

By September, reality had begun to set in when senior executive Andrew Hagger fell on his sword, after Michael Hodge, QC said he had displayed “disrespect for the role of the regulator and a disregard for the gravity of the events in question”.

Hagger’s departure came hot on the heels of fellow executive Anthony Cahill, leaving only former NSW premier Mike Baird as the short odds favourite to succeed Thorburn.

NAB Chairman Ken Henry is being asked to consider his position. Arsineh Houspian

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