Loading Replay Replay video Play video Play video Maybe he thinks they are a bunch of suckers. The current chairman, Catherine Livingstone, who had come up with the idea of retrospectively docking Turner’s pay found out (second-hand) that Turner said he didn’t recognise the board regulator, the Australian Prudential Regulation Authority, had so heavily criticised in its report. Turner (let’s call him Robinson Crusoe) clearly viewed the organisation through a different lens. We have heard plenty of evidence from the top and throughout the ranks of CBA that APRA had nailed the problems inside the bank. You can call it denial, but for Turner it saved him $350,000 – nothing to be sneezed at.

Loading Of course, shareholders were not made aware of CBA’s give-back request, because there was no reference to it in the annual report. Indeed one of the most interesting parts of the royal commission hearings is the taste it has given the public (particularly the media) of the entrails of how decisions get made inside the upper echelons of board and management. An Aladdin’s Cave of embarrassing detail. Wednesday’s grilling of Catherine Livingstone didn’t disappoint. We discovered that in 2016, despite numerous fires blazing in various parts of the business including the CommInsure disgrace, the charging of fees for no service, money laundering, and the credit card insurance debacle (all of which involved increased risk to the bank and its reputation) the CBA was taking the ostrich approach to remuneration and disclosure.

It was at this time that the then-head of risk, David Cohen, recommended in a note to the board that "I do not not believe there to be any risk issues or risk behaviours that would suggest STI (short term incentive) awards should be modified" from the recommended bonus amount. While he also suggested CommInsure might need some separate consideration, the note is still staggering. Catherine Livingstone. You try to find any banker around the world without regulatory skeletons. But here’s the thing: at that point in time it was only the CommInsure issue that was in the public arena and only because it had been exposed by the media. Livingstone admits this could create the impression that only public snafus had consequences for the executives that were in the frame.

Cohen went on to recommended the executives got 100 per cent of their short-term bonuses in 2016. Armed with that valuable hindsight, Livingstone now says a 100 per cent reduction in bonuses would have been appropriate. At the time the then-chief executive, Ian Narev, was clearly in lockstep with Cohen recommending his direct report executives get 100 per cent of their target bonus – other than wealth management boss Annabel Spring (responsible for CommInsure) who had her bonus cut by 5 per cent. (She must have been cursing Fairfax Media’s Adele Ferguson for exposing CommInsure). Presumably if that hadn’t been made public, the board would have taken the same approach as it did to the other misconduct – if it’s hidden from the public it didn’t really happen. Turner was totally on board. He recommended Narev get 108 per cent of his short-term bonus. But later, as fresh revelations about the bank's problems mounted, there was no escaping at least some degree of executive responsibility was needed.

Loading Livingstone was definitely squirming in the box when counsel assisting, Rowena Orr, read a 2017 laundry list of minor bonus cuts imposed on executives. There was to be an overall 10 per cent reduction in short-term bonuses for all group executives. The then-head of the retail bank and now chief executive Matt Comyn was to have his bonus reduced by a further 10 per cent for Austrac anti-money laundering. The Austrac action cost the bank $700 million. Spring had her bonus reduced by a further 20 per cent for the fees for no service issue. Livingstone said some executives should have had their bonuses reduced to zero but she was clearly reluctant to name names.

Awkward pause, awkward moment for the Livingstone who became chairman in January 2017 and ultimately appointed Comyn as Narev’s successor. Indeed Orr, with arched eyebrow, sounded deeply sceptical of Livingstone’s decision to promote Comyn, the executive whose division was in the frame for Austrac and miselling consumer credit insurance. Orr wasn’t inquiring about why he was hired but rather what sort of message that sent to other bank staff and the broader community. Livingstone seemed a bit tone deaf to this line of inquiry, preferring to rattle off a list of Comyn’s attributes, one of which was his willingness to accept responsibility and apologise. Another reason explained Livingstone was "to find an external person globally at that level who has not been involved in some regulatory event is almost impossible".