NAB CEO Andrew Thorburn is to step down from his role, effective 28 February, with the major bank’s chairman, Ken Henry, also announcing his retirement, stating that he’ll step down once his replacement has been found.
The board has asked Philip Chronican, a current NAB director with “extensive” domestic banking experience, to serve as acting CEO effective 1 March (subject to relevant regulatory approvals) until a permanent appointment is made.
NAB has said it will initiate “a global search process for the CEO role while actively considering a range of quality internal candidates”.
The board will also seek to bring on new non-executive directors this year to “increase diversity of thinking and experience for the challenges ahead, and establish a board committee for customer outcomes”.
Speaking of his departure, Mr Thorburn said: “It has been an honour to be the CEO of NAB, and to have been part of NAB since 2005.
“I have had a number of conversations with the chairman this week. I acknowledge that the bank has sustained damage as a result of its past practices and comments in the royal commission’s final report about them.
“As CEO, I understand accountability. I have always sought to act in the best interests of the bank and customers and I know that I have always acted with integrity. However, I recognise there is a desire for change. As a result, I spoke with the board and offered to step down as CEO, and they have accepted my offer.”
He continued: “I have devoted myself to serve NAB and my hope and ambition is that the bank can move forward and achieve its vision of being trusted by customers for exceptional service.
“I want to thank the two chairmen I have worked with, Michael Chaney and Ken Henry, and the professional working relationship I have had with both of them.
“Our executive team is capable and committed, and I have immense gratitude to them and the leaders and all employees of the bank. I will greatly miss daily contact with them.
“I look forward to spending time with my wife, our family and friends, and reflecting on the many things I am grateful for, before I embark on a new adventure,” Mr Thorburn said.
Dr Henry said he and the board had recognised that change was necessary. “The timing of my departure will minimise disruption for customers, employees and shareholders,” he said.
“This is naturally a difficult decision, but I believe the board should have the opportunity to appoint a new chair for the next period as NAB seeks to reset its culture and ensure all decisions are made on behalf of customers.
“I am enormously proud of what the bank has achieved and equally disappointed about what the royal commission has brought to light in areas where we have not met customer expectations. Andrew and I are deeply sorry for this.”
Mr Henry said that his “decision is not made in reaction to any specific event, but more broadly looking at the bank’s needs in coming months and years”.
The chairman continued: “It has been terrific to work so closely with someone of Andrew’s calibre. He is an executive of the highest quality and integrity, and I am deeply impressed that he has demonstrated accountability for the issues NAB faces. Andrew has always put the bank and its customers first.”
Mr Chronican said he was privileged to have been asked to step in as acting CEO while the board selected a new CEO.
“I recognise the important responsibility in stepping into this role at a difficult time for NAB,” he said.
“I am confident in our existing strategy to transform the bank to be better for customers and will work with everyone at NAB to earn the trust and respect of the community.
“Our strategy and the self-assessment we completed into our culture, governance and accountability set out clearly the steps we need to take to change and we are committed to them. We will also ensure NAB continues to play its crucial role in backing customers and business to grow, and in supporting the broader economy.”
The news followed the ASX announcement that NAB had requested a trading halt pending “leadership changes”.
Mr Thorburn and Mr Henry were singled out by Commissioner Kenneth Hayne in the final report of the banking royal commission.
“Having heard from both the CEO, [Andrew] Thorburn, and the chair, Dr [Ken] Henry, I am not as confident as I would wish to be that the lessons of the past have been learned,” he said earlier this week.
Mr Thorburn expressed his disappointment with Commissioner Hayne’s remarks.
“As the CEO, this is very hard to read and does not reflect who I am or how I am leading, nor the change that is occurring inside our bank. While we have made mistakes, I believe there is a lot of evidence that we are making sustainable and serious change to once again regain the trust of all our customers.
“I am proud to be a banker; it has always been a profession of service. I am proud to be CEO of NAB and am more determined than ever to lead NAB with even greater urgency and intensity and show through our ongoing actions that we do what we say.”
The NAB CEO also revealed that he cancelled his planned long-service leave, which he announced in December in order to “recharge and reflect”.
“I will lead this personally and visibly and alongside NAB’s 33,000 employees who share my determination to be better for customers.”
Dr Henry also noted his disappointment: “In his final report, Commissioner Hayne said I seemed unwilling to accept criticism of how the board had dealt with some of the issues raised by the commission.
“I am disappointed that the commissioner formed this view. I know that it is not so. The board and I have reflected deeply on those and other issues and, as I have said previously, we take them very seriously.”
More to come
[Related: Banks respond to RC recommendations]
Charbel Kadib is a journalist on the mortgages titles at Momentum Media.
Before joining the team in 2017, Charbel held roles with public relations agency Fifty Acres, and the Department of Communications and the Arts.
Charbel graduated from the University of Notre Dame Australia with a Bachelor of Arts (Politics & Journalism).