An independent review of CBA's remediation action plan says the bank has satisfactorily hit just one of its 153 milestones as at August end, but is showing evidence of commitment.
CBA was required to put together a remediation action plan after APRA led a prudential inquiry into the bank's governance, culture and accountability in August 2017.
The APRA inquiry's final report made 35 recommendations and triggered an enforceable undertaking, that forced CBA to put in place the remediation action plan.
CBA broke down APRA's 35 recommendations into 45 recommendations, generating 153 milestones or actions of change it needed to make across its business. The 153 milestones are divided into three stages: design, implement and embed.
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Cyclical Outlook: Growing, But Slowing
The review conducted by Promontory Australasia shows CBA's remediation plan is moving sluggishly - only one milestone is complete and effective, most have only hit the design milestone (39 of 54 completed).
Some implementation action points have been achieved (11 of 53), but none have been achieved in the embedded stage as yet (0 of 46).
CBA says it has completed work on eight other milestones. However, the reviewer hasn't assessed them yet as CBA delivered them to the reviewer at the end of the set August 2017 reporting period.
The green tick
Independent reviewer Promontory Australasia found only one change was effective and complete - the chief risk officer (CRO) assessment.
CBA's CRO was required to assess the performance of the chief executive and the group executives with respect to risk.
The bank is now making formal assessments to assist the Board Remuneration Committee make appropriate risk adjustments, the review found.
Promontory said while the milestone has been achieved, CBA could make "ongoing refinements" in the information that the CRO provides in future assessments.
CBA's action plan has another milestone for its CRO - to establish the role's independence. This hasn't been met yet.
CBA has also said that for FY19, general managers and above, and all senior leaders will have 20-30% of their performance metrics tied to the remediation plan's successful delivery of its 153 milestones.
Why so slow?
Promontory said given the size of the organisation and the breadth of its activities, the implementation will be a "long and complex process."
"Promontory observes that to date, CBA's design and management of the program evidences a commitment to meeting the challenges described in the Inquiry Report in a timely and comprehensive way," the report said.
It said the board and executive leadership were both active participants in developing and monitoring the action plan, and the bank seems to be responding to the delivery risks in a timely way.
"While initial resourcing plans an a program budget for the current financial year have been established, we would expect to see evidence of more comprehensive recourse planning and committed multi-year budgets going forward," the report said.
This is Promontory's third quarterly report; the next one is due in December.