Back in 2020, Westpac Banking Corporation (ASX: WBC) accepted an enforceable undertaking to "remediate significant risk governance shortcomings".
Today, Westpac released the 4th and 5th Independent Reviewer reports on its efforts for the December 2021 and March 2022 quarters.
The report outlined "progress of its Integrated Plan to improve risk culture, governance, and accountability," Westpac says, whilst covering a raft of other data points.
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Latest update to Westpac's remediation plan
The report covered Westpac's delivery of its three-year Customer Outcomes and Risk Excellence (CORE) program as at 31 March 2022.
According to Westpac, "the program comprises 19 workstreams, 82 deliverables with 343 activities. When an activity is complete, it is submitted to [independent reviewer] Promontory for assessment and their reports outline that progress."
Findings from the reports note Westpac has "recently consolidated and refined its approach to
measuring program outcomes across the Group," according to Promontory Australia.
The reviewer found:
The changes to these measures are designed in part to bring a greater quantitative approach to the assessment of program progress and business outcomes. Westpac is in the process of operationalising these measures throughout the Group.
In terms of progress, the report notes Westpac has embarked on a considerable effort to ensure the design of the program was suitable.
"Nonetheless," the reviewer continued, "the Bank must remain mindful that successfully achieving a significant uplift in risk governance will continue to require substantial work and a rigorous focus on execution."
"The Bank's difficulty in 'staying the course' during major projects, which has been identified as one of Westpac's cultural weaknesses in the past, will need to be overcome."
One of the challenges Westpac will need to address is dampening any disruption from its organisational restructure, Promontory Australia says.
According to its findings, it is important the bank stays focused and maintains momentum earned throughout the process.
Management commentary
Commenting on the report, Westpac CEO Peter King said that delivering on the program "remains a top priority". He added:
With strong foundations established, we are beginning to see the change reflected across the company. Our focus is on implementing and embedding sustainable change in our management of risks so we can deliver better outcomes for customers.
Westpac shares have clipped a 3% loss over the last 12 months but are trading 15% higher this year to date.
