Sir John Key should sharpen up fast and start presiding over New Zealand's biggest bank with the humility, precision and gravitas the job demands.
As chairman of ANZ, Key could have been expected to ensure the bank squarely faced up to the Financial Markets Authority's determination that the bank's sale of a house to Deborah Walsh, the wife of former CEO David Hisco, should have been disclosed to shareholders in the company's 2017 financial statements.
The fact that he didn't means it is now time for the Reserve Bank to mount a full inquiry into ANZ's governance and culture instead of probing around the edges with limited inquiries.
There are big questions over ANZ's persistent failure to properly calculate how much capital it is required to keep on hand to mitigate against risk taken in its operations and an inquiry is under way on that.
Key has admitted the directors (including himself) failed in their obligations to the Reserve Bank over the use of an inappropriate risk capital model. Then there are the questions over Hisco's departure, where the bank has exhibited a remarkable lack of precision in its comments.
The Walsh deal always fell squarely within the ambit of a related party transaction — between the bank and the "connected party" of a director — under the Companies Act. It should not have required the charade of having an FMA inquiry to confirm the obvious.
The only question is why it took the market watchdog so long to reach its conclusion.
There is media controversy on the question of whether Walsh scored a sweetheart deal on the house, by buying it at less than capital valuation off the back of rather tame independent market valuations. This is because she bought the house for $3.5m less than its 2017 rateable value of $10.75m. The ANZ disputes this conjecture, noting that the rateable value — or CV — did not come out until November 2017 when the house sale was settled in March 2017.
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Put that to one side. What is not debatable is the fact that ANZ also sold the house at 269 St Heliers Bay Rd for much less than it paid for it.
Key and the ANZ board's high-profile directors could have "sucked it up" rather than directing the bank to argue "black is white" when it came to the clear failure to disclose the housing deal in the 2017 financial statements.
The luxury St Heliers home was an ANZ asset, after all. And banks usually don't like to chalk up losses on asset sales.
The directors' names are absent from the media statement the bank's PR machine spat out on Thursday. But for the record they are: ANZ Group CEO Shayne Elliott; ANZ Group CFO Michelle Jablko; NZ independent directors Tony Carter (who is the outgoing chair of Air New Zealand), The Warehouse chair Joan Withers and Freightways chair Mark Verbiest.
While former ANZ chairman John Judge and Hisco signed off the 2017 financial statements — and questions should also be asked of Judge — it is today's directors who are responsible for the bank's response.
The bank's statement said, "No specific related party disclosure was made in ANZ NZ's audited 2017 financial statements, as the sale of the property was not considered by ANZ New Zealand and its external auditor (KPMG) to be material to an understanding of ANZ New Zealand's financial performance and financial position".
Or as the bank emailed me earlier, "the reason the sale wasn't listed in the accounts was because on advice from KPMG it wasn't considered material ($6.9m out of $150b in assets)".
This really isn't the point, as KPMG will quickly find out when it has to answer questions the FMA has asked the audit regulator to consider on disclosure.
Key would be well aware from his prime ministerial days (where registers of interests are also required of Cabinet ministers to ensure there is no sniff of self-dealing in respect of the ministries they oversee) that transparency goes much further than the way the auditor has construed it.
The ANZ went on to say that disclosure of the sale could not have influenced the economic decisions of the users of financial statements.
But the disclosure would surely have prompted journalists and analysts to ask some very pertinent questions of the bank and its managing director over why ANZ had booked a loss on the deal.
Such a question just may have turned internal focus earlier in the direction of the conduct and culture issues that ultimately brought Hisco down — mischaracterising personal expenses as business costs.
This should not be the end of the matter either.
The FMA has required ANZ to issue a corrective statement relating to the 2017 financial statements. It also expects ANZ to review its internal financial reporting, raising the question of whether the house sale deal even got to board level.
The FMA has kicked the issue back to the Reserve Bank as part of their joint focus on conduct and culture. The Australian Securities and Investments Commission, as the primary regulator of ANZ's parent company, has also been informed.
This week ANZ Group chairman David Gonski listed in respect of a "self-assessment of the bank" that complacency, a lack of accountability and short-term fixes have all been issues with ANZ's culture.
He's not half wrong.
If there is any one move that should persuade Reserve Bank governor Adrian Orr that it's time to get some true focus on ANZ's governance it is the response from the bank to the FMA this week.