I've spent decades talking CEOs out of predicting the future in public, so it's a nice change to see a bank CEO do it anyway and get it right. Matt Comyn, CBA CEO, hit a home run a couple of weeks ago, in tone and in message.
On RN Breakfast on 7 October, he warned that house prices won't find a floor until "well into 2027". CBA's call is a 9 per cent fall, the biggest in forty years. This was said eight days after the RBA hiked again and in the fortnight his bank lifted fixed rates.
Ten thousand Australians googled him by lunch. That's a lot for a CEO who hasn't been fired in a scandal.
It's because he showed a bit of backbone, said something most analysts already know, but spoke to the pain borrowers are in.
My question now is: how come a CEO 8.5 years into the job can still say the scary, accurate thing, and take a risk like that, when by that stage many have lost their backbone and grown tin ears?
As an aside, if you haven't read Joe Aston’s comments on CEO tenure and their decay of self-awareness over time, get his book The Chairman's Lounge.
Tenure is the word ANZ chose
ANZ ended a 57-year, $29.6-million-a-year relationship with KPMG, six months after the whistleblower allegations. The ASX statement is one sentence: a tenure of this length "is no longer considered appropriate." No mention of the scandal, and none was needed because of the context.
Beautifully handled when Macquarie and Lendlease had already walked. So, media just wrote the "wake of" line unprompted. Had ANZ gone further they’d have looked arseholes for no gain.
The word tenure did the job though. It basically says that a firm that audits the same bank for 57 years lives in the same feedback desert as the most arrogant of CEOs in year fifteen.
Nobody gets worse at the job, but they do get worse at being told things.
David Murray ran CBA for thirteen years after nearly forty inside it, and (my view) the certainty that built there is what finished him at AMP. Alan Joyce did fifteen, and the conviction that made him right about costs in 2011 stopped him hearing that the product had broken in 2022. Comyn joined CBA in 1999 and spent six years watching Murray from below. I suspect he learned something.
So what?
Being a CEO is closer to being an elected leader than we admit, except nobody makes you stand again. You renew a mandate you never have to seek by saying true things in year nine the way you did in year one, and by knowing which weeks need a number and which need a sentence. Two banks showed both halves in one week.