In a letter to shareholders, Mr Chronican sought to address the turmoil surrounding NAB’s customer service and compliance failings, which were brought to light during the banking royal commission.
NAB was singled out by commissioner Kenneth Hayne in the final report of the banking royal commission, with the commissioner stating that he was “not confident” that the bank’s leadership had learned from “lessons of the past”.
However, Mr Chronican assured shareholders that the bank has accepted responsibility for its shortcomings and said that he would work to rebuild community trust.
“I will be focused on earning trust for our bank during my time holding these privileged positions. The enormity of this task is not lost on me, because the royal commission is right,” he said.
“There is a big gap between where we are today and where we need to be. We have let down our customers. We have let down you, our owners. And we have let down the community. We have also let down our people on the front line who do a great job, day in, day out, serving customers.”
The interim CEO also expressed confidence in the bank’s strategic direction, adding that he expects that the bank’s leadership team would implement the strategy with “greater accountability and focus”.
“That begins with making sure we fix the issues that caused our failures and we pay back customers who are owed compensation as soon as possible,” Mr Chronican continued.
“Since June last year, we have returned more than $110 million to more than 310,000 customers – and we are stepping up the pace.”
Mr Chronican also claimed that NAB would be at the forefront of the financial services industry’s reform agenda.
“We are confident that the recommendations made by the [royal] commission will lead to a better financial services industry.
“I expect that at NAB we will lead the change the community wants to see.”
According to the chairman-elect, a focus on customers “will not be enough” to execute NAB’s reform strategy, stating that the bank would need to “obsess” about getting it right for customers “every single time”.
Moreover, following the rejection of NAB’s executive remuneration report at the bank’s annual general meeting, Mr Chronican committed to amending the framework to satisfy shareholder expectations.
“We are changing our framework to ensure it provides the right balance of financial metrics, customer outcomes and the management of non-financial risks over the long and short term,” he said.
“[We] will make sure compensation appropriately reflects the individual and collective performance of the executive team.”
With Mr Thorburn’s permanent replacement yet to be announced, Mr Chronican concluded his letter by noting that a working committee of the board would be responsible for making recommendations to the board for the selection of a new CEO.
The interim CEO added that board “renewal” would be the bank’s priority for 2019.
NAB executive resigns
The major bank has also announced the resignation of its chief people officer, Lorraine Murphy.
Subject to regulatory approval, Julie Rynski, currently customer executive of regional and agribusiness, will assume the role while a global search is undertaken for a permanent replacement.
Reflecting on Ms Murphy’s departure, Mr Chroncian said: “Lorraine has brought a significant and diverse history to NAB, and we are grateful for her time here. Building a truly customer-centric culture is more important than ever, and Lorraine and her team have laid the foundations for us.
“She has rebuilt the function from the ground up with structure, policies and process to best support the organisation.”
Ms Murphy commented: “I have thoroughly enjoyed my time at NAB and have reached a useful point of reflection to consider other roles. It is important for the incoming CEO to have members of their leadership team who are utterly committed to the coming years.”
[Related: New NAB chairman named]