“We’ve become tougher with assessments of values, loans and serviceability than we were prepared to be at the time,” he says. “We’ve tightened up and required more visibility about processes. My role as chairman is to make it clear and simple, but not pretend that it’s easy.”

Bendigo has a heritage that stretches back 160 years to when communities pooled funds to buy land and build homes on the goldfields during the Victorian gold rush. Bendigo Building Society listed on the sharemarket in 1993, changed its name to Bendigo Bank in 1995 and merged with Adelaide Bank in November 2007.

It was a founding member of the Shared Value project, a management strategy co-devised by Harvard Business School economist Michael Porter, in which companies find business opportunities in addressing social problems.

In 1998, under the leadership of CEO Robert Hunt AM FAICD, it started its first Community Bank in the regional Victorian towns of Rupanyup and Minyip, responding to the trend by major banks to reduce their local branch presence. It joint ventures with communities to provide banking services, job opportunities, local investment. The community banks are governed by almost 1900 volunteer directors. In 2017 they employed more than 1500 people, with $100m in wages and services spent locally and returned more than $5.5m in shareholder dividends.

“While it’s a quarter of our business, it’s an everyday reminder of the fundamental idea that we’re there and people choose to do business with us as a way of enhancing their own prosperity,” says Johanson. “The purpose of economic enterprise ought to be the prosperity of the community. We say, if we can help our communities prosper, we will prosper too.” Reflecting on the arc of economic history over the past 20 years, Johanson says wealth creation has provided great advantages, but “corporations have ended up managing for one set of stakeholders, the shareholders and managers, and we’ve forgotten the customers, employees and the community in which we operate. People have forgotten these things are two-way, you have obligations to the communities who give you these licences.”

A director of the bank for 29 years, Johanson was appointed chairman in 2006. (At the 2016 AGM, he said he would retire from the board after his term ends in 2019.) He rates longevity and a familiarity with economic cycles, as important.

So how can a board really trust what’s going on in management? “You never really know,” Johanson says, but he encourages candour and debate — and for directors to visit branches and have contact throughout the organisation.”

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