A year on from Hayne it's far from over

Much has been written over the past week about the Hayne royal commission and its implications a year on from the handing over of the final three volumes that consolidated a year's work to Treasurer Josh Frydenberg by Kenneth Hayne QC, the experienced and dry-witted judicial heavyweight chosen by the federal government in December 2017 to lead the look at misconduct.

The year-long wander through the emotional and financial debris left behind when individual advisers and major corporations went rogue produced 76 recommendations that the government has tried to persuade a sceptical electorate that it would take seriously.

A steady stream of media releases as well as a government road map for issues to be implemented were attempts by the government to deflect the barbs from critics about its historical reluctance to call a royal commission until the banks begged the government to set something up before Parliament set a parliamentary commission in motion.

The government chose January 31 (Friday) to release a draft of legislation that seeks to implement 22 of 76 recommendations contained in the final report presumably as a way of indicating it takes its job of implementing the recommendations seriously.

All of this might be fine but community scepticism and distrust of the political class that was deserved then continues to be justified now because the theatrical experience people know as the Hayne royal commission was ultimately only run because of political considerations.

Consider the fact that one inquiry after another on which taxpayers' money had also been spent had made recommendations for there to be a royal commission to deal properly with the issues raised in parliamentary inquiries and also repeatedly raised in the media.

The man who brought the coalition into power in 2013, Tony Abbott, did not call a royal commission despite a demand for one reaching a crescendo around the time Adele Ferguson and the Four Corners team released "Banking Bad", the documentary that focused intently and intensely on misconduct within the Commonwealth Bank's financial planning arm.

Whistleblower Jeff Morris - a hero in this particular drama - was a key component in that episode of Four Corners as well as being a face for the campaign against bank misconduct. Ferguson leveraged Morris' expertise, experience and tenacity in a way that saw the cause get greater prominence but no royal commission.

Abbott was unmoved.

Former merchant banker Malcolm Turnbull was more concerned about a trajectory of news polls that were pointed in a southerly direction that were ultimately his excuse to become Prime Minister in September 2015.

Turnbull declined to move on a royal commission and instead preferred a regular parliamentary committee hearing where bank bosses could get quizzed by politicians about their practices.

The committee hearings make for good copy, occasional confrontations between politicians and banks and, of course, some catharsis for those victims that might see a bank CEO get a little beaten up.

Turnbull decided that a royal commission into youth detention following a Four Corners report into Don Dale detention centre in the Northern Territory was necessary at one stage. He announced it the next morning after the special aired. No such speed for a banking royal commission

Turnbull and Morrison wound up calling for the royal commission only because the mental arithmetic told them they were in trouble if they failed to do so.

Many things in politics are dependent on numbers. Certain decisions in politics, for example, do not depend on morals, ethics or a wish to improve the wellbeing of customers of financial institutions that were ripped off.

Self-interest, the need for self-preservation and an attempt to save face drove the holding of the Hayne inquisition.

There are also beacons of light in the midst of the political automatons that will only take steps if they find out by counting the fingers on their hands that the tide has turned.

People like John Williams, the former Senator, who doggedly pursued the banks for the best part of a decade and Senators from the Greens who pushed for various inquiries over time. The Australian Labor Party came a little late to the party. Each of these groups and individuals was instrumental in applying political pressure to a government that clearly hates to be forced into doing things that are not its idea in the first place.

The findings of this royal commission begrudgingly called by Turnbull and Morrison, are there for all to see and there is little point trawling over and relitigating every instance of misconduct that banks and other institutions admitted during the process here. One look through the submissions, witness statements, exhibits and transcripts will tell you that Hayne and his cohort of lawyers elevated self-incrimination to an art form.

Where to from here?

Much of what people are pointing to as being lessons from the royal commission is simply banks confronting the reality they employed people in certain instances that were in the business of stealing from the client and their employer at the same time.

They hired people that would check their moral compass in at the front desk because they were in the business of getting themselves a decent wad of cash so they could spend a holiday in Hawaii rather than Horsham.

Bankers and their industry body are highlighting things that have changed, which is fair enough, but there is an issue that must also be addressed in commentary at this stage.

There is an entire class of bankers that have borne witness to the royal commission and to actions of unethical individuals that brought the reputation of a business into disrepute.

Analysts of the sector must carefully consider what banks and similar institutions are doing to ensure that corporate knowledge about these times does not leave through the front door when those bankers in the building today retire or choose another line of work.

It is not over when a government has implemented some or all of the recommendations from the report of a royal commission because the politicians do not run the businesses.

Bankers and other professionals working within the financial services sector need to ensure that they create a cultural and disciplinary environment where there is zero tolerance for rip off merchants seeking to legitimise unfair play by hiding behind incentive-based remuneration schemes.

You cannot put the head of a 50-year old senior manager on a 24 year old junior staffers shoulders, but you can at least tighten procedures and processes to encourage ethical conduct while seeking to generate a return for shareholders.