COSBOA today called on all banks, but particularly the biggest banks, to show they have understood the need to communicate better with the marketplace by creating new directors’ positions dedicated to small business.
Peter Strong, CEO of COSBOA, stated today “we understand the situation that the banks currently face. Indeed, we know that our banks are some of the best in the world but have failed to build on their undoubted capacity to communicate effectively. They of course have failed a disappointing number of small business people. The problems that our banking sector faces are in many ways its own fault due to that failure to communicate with customers in an effective manner. There are some examples of failure however that beggar belief.”
Mr Strong added “we welcome the recent announcement by NAB to cut their small business contracts in half and change the language to highlight loans as a partnership rather than a monarch/serf relationship. Well done and let’s see more from all the banks.”
Currently, COSBOA does not support a royal commission into Australian banks but with more and more bad stories emerging, our board is reconsidering that position.
With that in mind we are asking banks to show proof of change for the small business sector. This proof would be built on improved communications including more representative Directors on boards. The NAB has provided an excellent example of change. In our case that means designated representatives from the small business sector be appointed to bank boards. In our research, it seems there is only one director on the boards surveyed that has the words ‘small business’ in their bio. The other directors are of course exceptionally qualified and of the highest reputation but customer representatives should also be included at the board level. Communicating with the individuals in the various small business sectors is not a simple task and an experienced and expert person on a board will help achieve that and send the right message to the market place. Understanding finance is one thing but that must be matched by understanding communications and human behaviour.
We will provide some names, in confidence, to the banks. The people we recommend are all exceptionally professional with the highest integrity and they know small business and their behaviours as well as their communications and financial needs.
Mr Strong also added “there are other institutions that need to better reflect the diversity of the marketplace and their supply chain. This includes superannuation funds, particularly the industry funds that continue to treat small business people with scant respect. Communications and process is 80% of small business needs, get that right and the sector will be more efficient and effective. Then maybe we will all appreciate and love our banks again?”