As I look back on the week of turmoil that has engulfed Westpac, my overwhelming feeling is one of sadness.

I am sad for the children whose lives may have been savaged by sexual predators using the bank’s faulty systems. I am sad for the tens of thousands of Westpac employees who may feel tainted by association with the bank’s failings. I am sad for individuals, like Brian Hartzer and Lindsay Maxsted, whom I believe will be remembered more for the manner of their parting from the bank than for all the good that they did along the way. All of them deserve better.

None of this lessens my judgement about the seriousness of the faults identified by Austrac. Nor is sadness a reason for limiting the adverse consequences borne by individuals and the company.

Rather, in the pell-mell of the moment – super-charged by media and politicians enjoying a ‘gotcha’ moment – it is easy to forget the human dimension of what has occurred – whether it be the impact on the victims of sexual exploitation or the person whose pride in their employer has been dented.

Behind the headlines, beyond the outrage, there are people whose lives are in turmoil. Some are very powerful. Some are amongst the most vulnerable in the world. They are united by the fact that they are all hurt by failures of this magnitude.

For Westpac’s part, the company has not sought to downplay the seriousness of what has occurred. There has not been any deflection of blame. There has been no attempt to bury the truth. If anything, the bank’s commitment to a thorough investigation of underlying causes has worked to its disadvantage – especially in a world that demands that the acceptance of responsibility be immediate and consequential.

The issue of responsibility has two dimensions in this particular case: one particular to Westpac and the other more general. First, there are some people who are revelling in Westpac’s fall from grace. Many in this group oppose Westpac’s consistently progressive position on issues like sustainability, Indigenous affairs, etc. Some take particular delight in seeing the virtuous stumble. However, this relatively small group is dwarfed by the vast number of people who engage with the second dimension – the sense that we have passed beyond the days of responsible leadership of any kind.

I suspect that Westpac and its leadership are part of the ‘collateral damage’ caused by the destruction of public trust in institutions and leadership more generally.

When was the last time a government minister, of any party in any Australian government, resigned because of a failure in their department? Why are business leaders responsible for everything good done by a company – but never any of its failures?

Some people think that the general public doesn’t notice this … or that they do not care. They’re wrong on both counts. I suspect that the general public has had a gut-full of the hypocrisy. They want to know why the powerless constantly being held to account while the powerful escape all sanction?

I think that this is the fuel that fed the searing heat applied to Westpac and its leadership earlier this week. The issues in Westpac were always going to invite criticism but this was amplified by a certain schadenfreude amongst Westpac’s critics and the general public’s anger at leaders who refuse to accept responsibility.

So, what are we to make of this?

One of the lessons that people should keep in mind when they volunteer for a leadership role is that strategic leaders are always responsible; even when they are not personally culpable for what goes wrong on their watch. This is not fair. It’s not fair that a government minister be presumed to know of everything that is going on in their department. It’s not fair to expect company directors or executives to know all that is done in their name. It is not fair.

However, it is necessary that this completely unrealistic expectation, this ‘fiction’, be maintained and that leaders act as if it were true. Otherwise, the governance of complex organisations and institutions will collapse. Then things that are far worse than our necessary fictions will emerge to fill the void; the grim alternatives of anarchy or autocracy.

It’s sad that we have come to a point where this even needs to be said.

Join the conversation

Scapegoating or solutions?