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Westpac appoints advisory panel members

The big four bank has named two of the three members of its accountability review advisory panel, which was formed in response to the AUSTRAC AML/CTF allegations and will provide recommendations on board accountability.

In November, Australia’s anti-money laundering and terrorism financing regulator AUSTRAC revealed it was seeking civil penalty orders against Westpac over 23 million alleged breaches of anti-money laundering laws.

According to AUSTRAC, the bank failed to appropriately monitor outgoing international funds transfer instructions (IFTIs) and carry out due diligence on customers sending money to the Philippines and south-east Asia in circumstances which it alleged were “consistent with child exploitation typologies”.

The bank has already released its response plan to the allegations and said it “accepts responsibility for the issues that have occurred”, with the bank’s former CEO Brian Hartzer stepping down in early December, along with several other executive changes.

As part of the response plan, outgoing Westpac Group chairman Lindsay Maxsted announced that Promontory had been appointed to undertake an External Accountability and Financial Crime Program Review outlined in Westpac’s response plan.

In addition, Westpac announced it would also establish an accountability review advisory panel of three independent experts to consider Promontory’s report and provide recommendations on governance as well as board accountability.

Westpac has now announced two of the three independent advisory panel members who will conduct the review. The third panel member will reportedly be announced at a later date.

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Accountability review advisory panel members

Dr Ziggy Switkowski and Dr Kerry Schott will form part of the panel that will provide recommendations on board risk governance and board accountability as part of Westpac’s broader AUSTRAC response plan.

Dr Switkowski is chancellor of RMIT University, chairman of NBN Co and a director of Tabcorp Holdings.

He is also a former chairman of Suncorp group, the Australian Nuclear Science and Technology Organisation and of Opera Australia and has served as a non-executive director on the boards of Healthscope, Oil Search, Lynas and Amcor.

In 2014 he was made an Officer of the Order of Australia in recognition of service to tertiary education administration, scientific organisations and the telecommunications sector, to business and to the arts.

Dr Schott is chair of the Energy Security Board and a director of NBN. She is also a member of the advisory board for City and SouthEast Light Rail. She was the managing director and CEO of Sydney Water from 2006 to 2011.

Before that, she spent 15 years as an investment banker, including as managing director of Deutsche Bank and executive vice president of Bankers Trust Australia.

She was awarded an Order of Australia in 2015 for distinguished service to government and business.

Mr Maxsted said Westpac was pleased to appoint “such high-calibre” individuals to the panel.

“We are determined to deal with shortcomings in our financial crime processes in a comprehensive and durable manner,” he said in a statement.

“The panel will contribute to this through recommendations on the board’s risk governance processes and the board’s operation within those processes, as these relate to financial crime matter.

“We look forward to receiving the findings of both Promontory’s and the advisory panel’s reviews. They will be important inputs to our work to raise standards and fix any gaps in Westpac’s financial crime-related processes.”

Westpac has said it will make the recommendations of the panel’s review public.

While the bank’s response plan to the AUSTRAC allegations continues, it was recently announced Phi Finney McDonald had commenced a class action against Westpac on behalf of shareholders that acquired shares in the bank over the period in which AUSTRAC alleges Westpac breached AML/CTF laws.

The class action, commenced in the Federal Court of Australia against Westpac, is being brought on behalf of investors who acquired shares on the ASX and the New Zealand Stock Exchange, as well as American Depository Receipts traded on the New York Stock Exchange – between 16 December 2013 to 19 November 2019 (inclusive).

[Related: Westpac hit with class action after AUSTRAC allegations]

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