Bendigo and Adelaide Bank welcomes long-awaited industry changes to reward and remuneration
Bendigo and Adelaide Bank, Australia's most customer connected bank, welcomes the release of an independent report into the way banks remunerate employees and third parties.
Managing Director Mike Hirst said the recommendations of the Sedgwick report released today will prompt necessary broad scale change to performance management and remuneration practices across the banking industry.
"Pleasingly for our direct customers, the recommendations outlined in the Sedgwick report shows that our Bank already broadly operates in a manner that is consistent with driving the right outcomes for consumers," Mr Hirst said.
"For many years Bendigo and Adelaide Bank has had remuneration and governance practices in place that support a customer-centric culture. Our vision is to be Australia’s most customer connected bank. We are extremely proud of our deeply entrenched customer focused culture, and we are consistently recognised for having the highest customer advocacy in the industry.
"Our Net Promoter Score is highest among the listed banks. We're number one in Forrester's Australian Customer Experience Index across all industries and out of all banks' customers, our customers are most likely to recommend their Bank and are consistently most satisfied, according to Roy Morgan research."
Bendigo and Adelaide Bank leads the industry in already having employee remuneration practices consistent with the Sedgwick recommendations. For example, Bendigo and Adelaide Bank;
- Removed incentives that are directly linked to products and the achievement of sales targets in 2002. This was replaced with a discretionary bonus scheme that rewards employees based on their contribution across a range of measures.
- Operates a modest bonus scheme where payments make up a relatively small proportion of total individual employee pay. Satisfactory assessment of values based behaviour (including risk and compliance) has always been a gateway to eligibility for any bonus payments.
- Does not operate variable reward schemes that include "accelerators" i.e. significantly increased incentive payments as certain sales or other financial thresholds are achieved.
- Introduced customer advocacy targets into Executive remuneration in 2016 to further strengthen the alignment of senior leaders' actions with good customer outcomes.
- Established a whistle blower framework in 2003. This was further enhanced by appointing an independent organisation a few years later.
- Established a dedicated customer advocacy team in 1996. This function was recently enhanced with the appointment of an independent Customer Advocate to provide oversight.
- Established a customer voice function to ensure we are actively listening and responding to our customers, enabling them to influence the Bank's decision making and shape positive outcomes.
- Proactively reviews workplace culture, leadership and training frameworks to ensure they are aligned with good customer outcomes.
"As a bank, we understand that we play an important role in the community, and it's critical that the community trusts us," he said.
"Our customers can be confident that a customer-centric culture exists in every way they choose to engage with our Group, and we're pleased that the industry will now follow suit to make banking better for all Australians.
"We thank Mr Sedgwick and his team for conducting a thorough independent review. We will proceed with full implementation of all recommendations and will support swift industry action, which we expect to have a lasting and positive impact for Australians."
More information on the Sedgwick Review, and a copy of his Final Report, is available at http://retailbankingremreview.com.au/.