Reserve Bank of New Zealand (RBNZ) deputy governor Geoff Bascand said Westpac’s board in New Zealand needs significant improvement around risk governance processes after an independent report found “material shortcomings.” An RBNZ commissioned report also points to a variety of additional problems, including poor communication, excessive formality at board meetings, overstretched resources, and a reactive approach to risk management.
Mr. Bascand said, “material risks to effective risk governance” were identified, and the board had fallen short of expectations. “In some cases, issues that had been acknowledged by the board for several years had not received due attention or effective remediation,” he added. The report also identified a “complex dynamic” between Westpac’s executives, the New Zealand board, and the Australian parent, which “hindered effective information flows, including on risk matters.”
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