Matt Comyn's apology over the failures that let drug syndicates and gun dealers launder millions of dollars through Commonwealth Bank ATMs helped get him the top job at Australia's biggest bank.
CBA chair Catherine Livingstone was impressed Mr Comyn "learnt the hardest possible lesson in the most public way" by taking responsibility for the bank's anti-money laundering and counter-terrorism financing (AML/CTF) failures.
But Ms Livingstone has also blamed CBA management for the money laundering problems that led to the bank paying a record $700 million civil penalty, saying they lacked the capacity to deal with the escalating issue.
The retail bank headed by Mr Comyn was responsible for a number of CBA's many scandals including the AML/CTF failures and the mis-selling of consumer credit insurance.
Ms Livingstone defended the board's decision to promote Mr Comyn to CEO, saying he stepped up after AUSTRAC launched legal action against CBA last year and took full accountability including for areas that were not part of his responsibility.
For her, the most telling thing was that Mr Comyn apologised.
"Apologised to me, apologised to the board for what had happened, and for his failings in that," she told the banking royal commission on Wednesday.
Mr Comyn applied himself with extraordinary diligence to understand what had gone wrong and what he should have done, she said.
"And I think he, and we, have learnt the hardest possible lesson in the most public way,."
Ms Livingstone said the easy answer would have been for CBA to appoint an external person to take over as CEO from Ian Narev.
"To find an external person globally at that level who has not been involved in some regulatory event is almost impossible, and I don't mean that as a joke."
Ms Livingstone and Mr Comyn each spent two days in the witness box at the royal commission.
Both took swipes at their predecessors and painted themselves as the right leaders to fundamentally change the way CBA operates after a series of scandals.
Ms Livingstone launched a staunch defence of her own actions on Wednesday, having conceded a board committee did not take seriously enough audit findings warning CBA was not complying with its AML/CTF obligations.
She argued she challenged management about the issues at a board meeting in October 2016, when she was a CBA director.
"I did not receive a satisfactory answer to my challenge, because it did not accord with my understanding of AUSTRAC," she said.
"That response served to confirm the concern that I had been developing, based on my experience as a non-executive director, that management, at that time, did not have the capacity to respond to what was clearly an escalating, significant and serious systemic control challenge.
"Management did not have the capacity, either because they couldn't or they wouldn't."
Australian Associated Press
