The Westpac Banking Corp (ASX: WBC) share price will be on watch on Tuesday after announcing the exit of its under fire chief executive officer Brian Hartzer.
What did Westpac announce?
This morning Westpac chairman Lindsay Maxsted revealed a number of executive and board changes in response to the AUSTRAC scandal.
The release explains that current chief executive officer, Brian Hartzer, will be stepping down from the role. He will be replaced on a temporary basis by the bank’s current chief financial officer, Peter King.
Mr King will take on the role on December 2, with current chief operating officer, Gary Thursby, stepping into his former role.
Director stepping down.
In addition to the executive changes, Westpac’s chairman revealed that its long-standing director, Ewen Crouch, will not be seeking re-election at the upcoming Westpac annual general meeting. Though, it is worth noting that shareholders were being encouraged to vote against Mr Crouch’s re-election by proxy advisors. So his re-election was far from guaranteed.
Also stepping down will be the chairman himself. Mr Maxsted advised that he intends to bring forward his retirement to the first half of 2020. He is doing this to allow an incoming chairman and the board to oversee the appointment of a permanent chief executive.
The bank’s best interest.
Chairman Lindsay Maxsted explained that these changes were in the best interest of the bank.
He said: “The Board accepts the gravity of the issues raised by AUSTRAC. As was appropriate, we sought feedback from all our stakeholders including shareholders and having done so it became clear that Board and management changes were in the best interest of the Bank.”
The chairman spoke positively about the acting chief executive, Peter King.
Maxsted said: “Peter has had a long and distinguished career at Westpac and has been the CFO since 2014. He is the right choice to provide stability and direction to the Bank and its people. He is an executive of exceptional integrity who is deeply respected by the market and the entire Westpac team.”
“The Board has asked Peter to focus on two immediate priorities: to implement the Westpac Response Plan and to continue to execute the Group’s broader strategy. We are determined to urgently fix these issues and lift our standards to ensure our anti-money laundering and other financial crime prevention processes are industry leading,” he added.
Outgoing CEO, Brian Hartzer, accepted responsibility for the scandal.
He said: “As CEO I accept that I am ultimately accountable for everything that happens at the Bank. And it is clear that we have fallen well short of what the community expects of us, and we expect of ourselves.”
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Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.