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Posted: 2024-08-13 19:33:06

In short:

Warren Day's title was changed to ASIC CEO in June last year without a position description being created for the role.

An ASIC spokesperson said making Mr Day CEO was simply a title change to better reflect the work he was doing.

What's next?

Mr Day has told ASIC he will not return to the organisation after his current secondment to the Commonwealth Director of Public Prosecutions ends.

Australian Securities and Investments Commission (ASIC) chair Joe Longo appointed a chief executive to the corporate regulator without advertising the role, considering other candidates or consulting with other commissioners, documents obtained by the ABC show.

The documents, obtained under Freedom of Information laws, show Mr Longo promoted ASIC's chief operating officer (COO), Warren Day, to CEO on June 29 last year by sending a note to staff changing Mr Day's title.

In the email, Mr Longo said the new title "better reflects Warren's current responsibilities as leader of ASIC's executive team".

However, no position description was created for the job, which was not advertised internally or externally.

There is no suggestion Mr Day, who is currently on secondment to the Commonwealth Director of Public Prosecutions (CDPP), has done anything wrong.

His appointment as CEO contrasts with the process by which he was made COO, which kicked off in September 2020 and involved creating a detailed position description, advertising the job internally and externally, two rounds of interviews — including with ASIC commissioners — and psychometric testing.

Four candidates — two internal and two external — made it through to the final round, with Mr Day appointed to the position in March 2021.

Financial services regulation expert Andy Schmulow, an associate professor at the University of Wollongong and an outspoken ASIC critic, questioned the process.

A man in a suit, tie and glasses looks serious.

Governance expert Andy Schmulow contrasted the process for Mr Day's appointment as CEO with the process by which he was made chief operating officer.(ABC News: John Gunn, file photo)

"From what I can see, they went to all sorts of lengths for the COO position, including psychometric tests, but then just made it a shoo-in for the CEO," he told the ABC.

"How is that probity in appointments?"

An ASIC spokesperson said dubbing Mr Day CEO "was simply a title change following ASIC's organisational redesign that better reflected the work Mr Day was undertaking".

"It also aligned with a recent title change at another peer agency.

"Under the relevant legislation, ASIC's chair is empowered to make employment decisions. 

"The appointment of Mr Day at every stage has followed clear processes and appropriate governance, including external reviews and internal consultation before the chair as ASIC's accountable authority has made a decision."

'Culture is the worst it has ever been'

Mr Day's elevation to COO and then CEO came amid turmoil at the corporate regulator, including plummeting morale and an expenses scandal that led to former deputy chair Dan Crennan SC resigning in 2020 and former chair James Shipton stepping down in 2021.

Both men were cleared of any wrongdoing but questions raised about expenses paid to them put the focus squarely on ASIC's culture.

ASIC has refused to release the full results of a staff survey conducted last year, which runs to 231 pages. However, earlier this year it handed a short summary to a Senate inquiry run by Liberal senator Andrew Bragg which revealed low levels of motivation, satisfaction and intention to stay at the regulator.

In its final report, released in July, the Senate inquiry slammed ASIC's culture and said the organisation lacked accountability.

"Culture is the worst it has ever been, as evidenced by the survey," a veteran ASIC officer told the ABC.

"This is primarily due to senior executive leaders creating a culture of fear where people are too scared to provide feedback as we are called 'negative' and 'annoying'."

The officer said staff were taking more sick leave and "crying at our desks".

"We have all quietly quit. The only solution is to get rid of the current leaders. The place is like a cult!"

ASIC's spokesperson said Mr Longo "acknowledged there are areas ASIC can and will improve".

A man in suit and tie sits in an office, looking serious.

Joe Longo has been ASIC chair since June 2021.(ABC News, file photo)

"Work is underway at ASIC to continue building our culture including through workshops with teams at all levels, professional development and training," the spokesperson said.

Mr Day's elevation to CEO came more than two years after he was given extra responsibilities as acting "head of office" for ASIC — a position that was only initially slated to last for 12 months.

The "head of office" role was recommended by a review of ASIC's capabilities conducted in 2015 by Karen Chester, who went on to be a commissioner at the regulator.

But in March 2021, when Mr Day was given the role, ASIC was in turmoil, with Mr Shipton on the way out after announcing he would resign after the auditor-general raised concerns about almost $120,000 the regulator paid big four accounting firm KPMG to do his tax returns.

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