That would be a destructive outcome. If there is to be board renewal beyond that which will already occur, it should be managed in an orderly fashion after a new CEO and chairman have been appointed and given time to settle into their positions. The loss of corporate memory and experience, if there were a wholesale purging of the board, would otherwise compound the damage already done. Other boards will be looking at what has happened to Westpac and asking themselves how they might have handled it differently. They might also consider whether, in the emotional maelstrom the AUSTRAC allegations unleashed, the outcome and the position Westpac finds itself in would have been any different regardless of how the bank responded. In this environment, there is no proper process or evidence-based decision-making, only instant gratification from the prestige and size of the body count.

Loading Westpac was clearly blindsided, although not by AUSTRAC’s claim that there were 23 million breaches of anti-money laundering laws because Westpac self-reported them. It was the claim that, within those breaches, there were 12 Westpac customers who may – or may not – have been using Westpac’s platform to make payments for material that involved child sexual exploitation that shocked the bank. Westpac has said the board – and CEO Brian Hartzer – only learned of those explosive allegations on November 15, via an email from AUSTRAC. Confronted by similar circumstances what should the board and any other board in an analogous situation have done? Conventionally, the first action would be to gather the facts and glean an understanding of how the breaches could have occurred, who held the responsibilities for ensuring that they didn’t and why it apparently took a regulator’s action for knowledge of them to reach the CEO and board.

Once the questions were answered, the board could then move onto accountability, from those at the coalface of the financial crimes unit to senior management, including the CEO and the board itself. In effect, that is what Lindsay Maxsted tried to do. In the much-critiqued announcement the board made last weekend, he announced a number of immediate actions to address the deficiencies in its products and processes identified by AUSTRAC. He also announced the bank would appoint an independent expert to oversee a review of its responses and an assessment of the accountability for its failures. The findings of the review would be made public. In this environment, there is no proper process or evidence-based decision-making, only instant gratification from the prestige and size of the body count. That would appear a reasonable response: ascertain the facts before assigning accountability that could end careers, damage reputations and destabilise one of the country’s oldest, largest and most systemically important institutions.

The intensity of the emotional response to the nature of AUSTRAC’s claims and the sources – from the Prime Minister and Treasurer to regulators, shareholders and the community generally – worked, however, to make a considered plan look like a cynical attempt to buy time. It proved counter-productive, inflaming emotions rather than cooling them and the fates of Hartzer, board member Ewen Crouch and Maxsted himself were decided almost immediately. The outcome is inherently unfair: prejudging a case and ending careers before the facts have been discovered and the levels of accountability apportioned is hardly fair to the individuals concerned or, indeed, to Westpac more broadly. The major banks, for a variety of reasons, not the least of them the exposure of their failings at the royal commission, are the softest of targets. They have no friends in Canberra and few elsewhere. In an era where big business generally has few friends, however, the potential for the Westpac experience to occur elsewhere is increasing. Any large company could find itself in the same kind of harsh and destabilising spotlight.