An apology is one thing, compensation is another. But as the Commonwealth Bank drifts toward another Senate inquiry into allegations of a cover-up in its financial advice scandal, the question is whether there has been enough change at the CBA to prevent history repeating itself.

This question sounds all the way to the top. One of the most damning pars of the Senate Economics Committee’s report into the scandal highlights the complete inattention of the CBA board to the scandal bubbling away in the Commonwealth financial planning (CFP or CFPL) division.

As the report’s chronology shows, the Australian Securities and Investment Commission started a surveillance program over CFP in February 2007 and notified the bank of its concerns a year later. In response, CFP implemented the continuous improvement compliance program (CICP) in April 2008, and rogue planner Don Nguyen was suspended in September after compliance failures were identified. Whistleblowers led by Jeff Morris contacted ASIC a month later, and after six months of inaction, in May 2009 went to journalist Darin Tyson-Chan at financial newsletter Investor Daily, where the first reports appeared, naming Nguyen.

By now you would imagine alarm bells were well and truly ringing within CBA: ASIC was involved, a planner had been suspended for known compliance failures, and it had gone public. Yet according to the minutes it was another two months before the CBA board — one of the most prestigious in the country — took any interest in what had been going on at CFP the past two years, as the Senate committee reported:

“Highlighting the apparent indifference at CFPL to the CICP, evidence received by the committee during the inquiry indicated that the CBA Board likely had minimal or no awareness of the CICP … a review of the minutes of the CBA Board and its sub-committees suggested the CICP was first mentioned to the Board on 9 July 2009 (15 months after it was implemented) as part of a broader presentation on the CBA’s financial advice business. The only other reference to the CICP in Board papers that the CBA could find was in a paper considered by the Board on 9 August 2011, which updated the Board on an internal audit report and regulator concerns regarding parts of the Colonial First State advice business. The reference to the CICP in that paper seems to have been a passing one in a paragraph outlining the history of regulatory issues at CFPL.”

Presumably the board, led by chairman David Turner, who described the advice scandal as “shocking” at last year’s annual meeting, now wishes it had paid much closer attention six years ago.

It is not that the scandal will have huge financial implications for CBA. Morgan Stanley’s banking analyst Richard Wiles yesterday retained CBA as his top pick among the big banks, notwithstanding the advice scandal. Noting the CBA’s wealth division, including CFP, generates only 9% of pre-tax operating earnings of roughly $10.7 billion in fiscal 2013, Wiles wrote there was a risk that reputational damage would lead to more modest revenue growth but even a halving of that revenue would only lower his earnings forecasts by 0.5%.

In terms of compensation, CBA has some 400,000 advice customers with $240 billion invested through CFP or its FinWis financial planning arm. So far it has paid $52 million in compensation to roughly 1100 clients, at roughly $47,000 each. Wiles models three scenarios — in which 5000, 10,000, and 50,000 customers receive the same compensation, of $236 million, $473 million and $2.4 billion respectively. Media reports suggest the first scenario is most likely, reducing the all-important tier one capital ratio of 8.95% this year by just 0.05% or 0.1% of the bank’s market capitalisation. The third, worst-case scenario reduces tier-one capital by 0.5%. Wiles assumed compensation and program costs of around $100 million a year for the next three years, reducing cash earnings per share by about 1%.

But it’s the cultural and reputational damage, still growing, that really matters for the board, as much as for the management. As Fairfax Media’s Adele Ferguson, whose fierce reporting triggered the Senate inquiry, wrote last week, the grave danger for CBA is hubris and arrogance.

The CBA told the Senate committee the wealth business had entirely new leadership. As The Australian Financial Review‘s James Eyer wrote, two of the senior executives in the wealth business at the time of the misconduct have left CBA: former Colonial First State boss Brian Bissaker (now at Virgin Money) and general manager of wealth management Tim Gunning (now at Ord Minnett). But Graeme Petersen, who ran wealth management from 2006 to 2011, is now the bank’s group executive for business and private banking.

Before the committee, CBA emphasised that cultural change had been a very big part of the change process in its financial advice business. The current executive general manager of the CBA’s wealth management division,  Marianne Perkovic, explained:

“The main driver of changing that culture was restructuring the remuneration and also the KPIs of not just the planners but all of the management within the advice business … We have moved to a more balanced scorecard approach, where the focus is absolutely on quality advice and quality advice measures for the advisers but also for people across the business—so the managers of advisers as well.”

This was “too little, too late” for whistleblower Jeff Morris, a real hero of the CFP story:

“What they have done, I think, is basically enough to address the Don Nguyen situation, but what remains is, I think, symptomatic of broader problems in the industry, in that, although they have changed their remuneration model, when you look at the detail of their submission, they do not say that the bonus scheme is now based purely on quality of advice. There is a reduced emphasis on sales volumes. I do not know exactly what that means. I have a difficulty with any professionals with a fiduciary duty where you are also making them salesmen. I think that is an impossible conflict of interest to reconcile.“

This is by no means over for CBA.