With the Magnificent Seven at the helm of the NAB’s Blazing Ship of
Fools, the upcoming meeting of NAB shareholders might be extraordinary
indeed with not quite the result that was scripted by the NAB’s
lawyers. Here’s another script that might play better to an angry
shareholder lynching mob.
NAB’s Blazing Ship of Fools and the Magnificent Seven
Soon to be a Major Motion Picture
Opening: Ladies, Gentlemen, Institutional Shareholders and well
regarded analysts, welcome to the National EGM. I’m your Chairman,
Hedley Lamarr. Good morning (with apologies to Mel Brooks, of
Blazing Saddles fame).
Growl from assembled shareholder mob: Up yours
(Hedley, Eddie, Dunc, Senior, Thommo, Glark, – shareholders
mentally or verbally tick one, more or all boxes)
Hedley: If you shareholders had been paying attention to the
National’s 2003 Annual Report, Growth Through Excellent Relationships,
which we wheeled up last December, just six short months ago although
it does feel longer, you would have read that over the last 18 months,
the Group has completed a substantial review of its business plans and
developed a strategy for future growth. I’m reading from page 8 of the
Report if any of you have any doubts that what I say is true.
Your company has been assisted here by recent appointees to the Board.
Let me first introduce our very good mate Dunc, appointed 2001.
Dunc has had the dual distinctions of serving on the Audit
and Risk Management Committee;
Eddie Tweddle needs no introduction. He was appointed in 1998 and has
latterly served with me on the Risk Management Committee, and a good
job he’s done too. Right on top of things.
That’s it for the RMC. We did have another RMC member, but he had
an unfortunate accident with his sword in February. I can’t even
remember his name, but your bank is better off without him, or
that’s what he said, sort of.
Kenny Moss was appointed in 2000. He has served on the Audit
Committee. Recently, we promoted him to the position of Senior
Director. He is the shareholders friend and has directly relevant
experience as Chairman of Boral. He’s like a cuddly friendly Senior.
Let’s give him a big welcome.
Hey. Hey. Stop that. Would the security people please remove those
ungrateful shareholders throwing rotten fruit. Bunch of bloody
Jack Thorn, appointed in October 2003, needs no introduction as
a former heavy at PwC, an independent accounting firm and I can
prove it. He also serves on the Audit Committee.
And that’s it for the Audit Committee.
Then of course, my Magnificent Seven, modestly including myself, is
rounded out by Brian, who we just know as Glark, who was appointed in
2001, and Thommo who was appointed in 2000. Some of you who are
National Mutual policy holders may have run across Thommo before. Poor
old Nat Mut blew itself up and ended up with the frogs and a name
change to AXA , but no-one and certainly not Thommo who’d been there
for years was to blame while the place was going up in flames. As you
know, the National looks for experience in selecting board members.
Borrowing from a quip by another famous Melbourne ex-chairman, Hugh
Morgan I think, experience is experience and it doesn’t
necessarily need to be successful. That’s really up to others to
Shareholder interjection: That’s what we’re here for Hedy. Wasn’t there some woman who chaired your audit Committee?
Hedley: Its Hedley. No, we don’t see her as a woman. She is the
odd man out. She is misconceived and the Magnificent
Seven don’t trust her. We are an equal opportunity
employer. She’s had all the opportunity she’s going to get. She wants
to get the Magnificent Seven fired. But we’re getting in first with our
meeting to fire her so your company can change the organisational
culture and behavioural standards and build shareholder wealth. That’s
what I want to do right now. Who’s in favor?
Shareholder interjection: Hang on Hedy…
Hedley: It’s Hedley. That’s right on. We’re going to hang her, now.
Don Boardwalk: Hedy, who cooked up this meeting one, two, three rubbish and all the proforma drivel that’s been sent out to shareholders?
Hedley: Its Hedley. We have a great legal department run by a
bloke who was at Telstra. David Mirenstein or something. He is very
active and a key member of the National’s senior management who keeps
us in the mire, I mean out of the mire. Great job on Homeburn, great
job, and some of the other things the National has done which had
worked out less well than we would have hoped. Cost a bit of
money, but hey, we’re a big regional company now and it’s only money,
right? That’s what I always say. What’s good enough for Telstra is even
better for us here at the National. We’ve even got a committee of
management who organized this EGM. We appointed them in fact. They are
very independent. Independence is all the go at the National. We just
leave it to the lawyers. It’s worked before. If its not broke, don’t
fix it I say.
Barry Banker: But Hedy, you’re supposed to run the company, not
the lawyers. The National has gone from one disaster to another. Its
blown four thousand million on Homeburn, about three thousand million
on a sharebuyback that’s about five hundred million odd underwater,
another thousand million or so on software that doesn’t
work and numerous other assorted image tarnishing ugly
adventures. PwC reckon that the cultural tone starts at the top. And
six of your Magnificent Seven were on watch. APRA has now put training
wheels on the National and wants us shareholders to chip in another
thousand million or two of capital. The Magnificent Seven has presided
over almost over ten thousand million of shareholder burn as far as I
can see. Just one magnificent cock-up after another. And no-one
on your ticket seems to know the first thing about banking and
risk management. The Positioning For Growth strategy cooked up by your
consultants has positioned the National alright. As a basket
case. You ought to be running a demolition derby. I reckon your ticket
ought to be punched out.
Hedley: Its Hedley. We’ve just hit some speed bumps,
that’s all. It’s only money, and we have our reputations in Melbourne
to think about. And experience doesn’t come cheap. Do you want monkeys
running our company, I mean your company. Let’s focus on what’s
important for the shareholders. The National needs experienced
directors with good reputations. We’ve been getting good experience and
there’s nothing wrong that a good re-plan won’t fix, once we get rid of
that Audit Committee odd man out woman and restore some good old
Melbourne cohesiveness on the Board. It’s worked before. It’ll work
Shareholder interjection: You’re in deep shit Hedy. Ten
thousand million dollars worth of deep shit. How much more cohesive can
you get than that? And what about the UK? Frank Cicutto said in 1998
that he would be putting the UK on steroids and later that Scotland had
been in recession for the last 200 odd years. By the way, what happened
to Frank and Charlie Allen?
Hedley: Its Hedley. Frank and Charlie who?
Shareholder: You know, the previous CEO you lot had just
rehired on a kakajillion dollars a year followed up with a non-compete
consultancy as icing on the cake. And what was ex-Chairman
Charlie Allen’s departure story?
Hedley: Oh them. Charlie Allen said the previous CEO was
depressed about his new house or something like that. He left for the
good of the National, which was decent of him. Very Melbourne. Charlie
just left and now you’ve got me. Maybe it was stress or style or
something. I have a different style, better suited to downsizing
troubled companies. I’m really the man for this job. Plenty of
experience, just like Barry Banker just said. That’s why I was elected
Look. Our focus is on going forward. Anyway, its plain that our UK
operations have never even sniffed a steroid. They’re seven stone
weaklings with no market muscle. We’re used to having sand kicked in
our faces over there by the Scots. Takes a bit of getting used to over
here though I must say. We’ve got a Scottish CEO you know.
Don Boardwalk: Hedy, what is your Magnificent Seven going to bring to the party?
Hedley: Its Hedley. Transparency, procedural fairness and the Melbourne Way.
Don Boardwalk: Look Hedy, your mate Dunc has two strikes against
him, he was on the Audit Committee as well as the Risk Management
Committee that you chaired. Eddie Twaddle was on the Risk Management
Committee with you, and the other member Frank has gone. Wouldn’t it
just be cheaper for shareholders all round to buy a nice block of
land for each of you in Canterbury or Toorak and enough for a nice new
house each and you ride off into the sunset? In fact, why not make a
total package of it and include Glark and Thommo in the deal? Maybe
even just one big house to maintain cohesiveness. Think about it?
You could get Frank in as a consultant to ensure it all went without a
hitch and was very tasteful and sell the whole lot to Kerry Packer for
an unreality show. Think of the ratings. No-one would believe it.
Hedley: Its Hedley. That’s not on the agenda today. We’re in
banking, not entertainment. We’re here to hang that woman who’s been
causing all this trouble.
Barry Banker: Doesn’t seem like there’s much in it for us shareholders.
Hedley: Well off course there is. Heads we win, tails we win.
It’s a win-win situation. And you’ll end up as shareholders in a
nice regional bank that’s very cohesively run, going forward. Why don’t
you all just quit the whining and let us get on with the business today
of hanging that trouble making woman so we can sail into clear water.
Elderly Female Shareholder: I’ve got one hundred shares Mr
Lamarr. Talking about water, I’d like to drown you. They were worth
three thousand dollars five years ago. They’re worth less today. I
would have liked a nice dividend instead of the share buyback and the
money lost on Homeburn and all those other nasty things that I have
read about. Anyway, I like that nice Mrs Walter. Seems like she’s the
one that let the cat out of the bag. I think she should stay to keep
the place honest. After all, isn’t banking all about trust and honesty
and banking experience without all these lawyers getting involved in
Hedley: Yes dear, thanks for coming. And thanks for your
respectful use of my name. No-one else gets it right. Tea and biscuits
will be served right after the hanging. The local institutional
shareholders want me and my Magnificent Seven Ticket. I’ve been around
to talk to them. They’ll vote the right way if they know what’s good
for them. Otherwise they’ll get it. (Gang of Seven pull out resignation
notices and hold them up. Shareholder mob mutters and steps back
from the gallows.)
Elderly Female Shareholder: Mr Lamarr, I know they can be very
stupid boys and girls from time to time, but I don’t think they are
that stupid. Your record of destroying shareholder value has been
stellar. It’s all in the stars. And after all, it’s not really their
money. They have given you all a lot of rope over the last few years
and you have hung us all out to dry. We want a company we can be proud
of. I think you are making us all a laughing stock. And we don’t want
some big bad foreign company to come in a clean us out for ashes or
peanuts while the place burns. After all, your lot set it on
fire. Do you have any a fireman qualifications as well?
Hedley: Thank you Madam. You are on the wrong tram. This is not productive. We must move forward and put all this behind us.
Elderly Female Shareholder: You are trying to hold us to
ransom. If I was a bit younger I’d put you across my knee and give you
a good spanking. I think you are like a corporate terrorist. I’m going
to talk to that nice Mr Laker at APRA. In fact. I saw him here a minute
Hedley: [Censored translation] I strongly disagree. You don’t understand.
Large institutional local shareholder: Well I think that the lady
is on the right tram and I’m here to tell you and your mates where to
get off. We big shareholders put a lot of trust in the
boards of the companies we invest in and like to let them get on with
it. And she’s right. It isn’t our money. And we would be stupid
if we didn’t jump at the opportunity that Mrs Walter has given us today
to shorten you all up. I reckon that your ultimatum of a mass
resignation is the best deal going here today and we ought to take it
before you blow the whole place up. And when we’ve booted you and your
mates, we’ll run the ruler over your legal department and their
advisers who decided to play us for mugs. I expect they’ll come up
pretty short as well. Might as well make a clean sweep of it instead of
prolonging the agony. Has anyone here got any ideas how to proceed?
Don Boardwalk: I think the shareholders might be onto something
here. Maybe we should call Hedy’s bluff let them go. They’ve done us no
favours so far. Just a string of disasters and a rat cunning meeting
standoff hatched by their smart lawyers. We’ll show ‘em how to play an
ultimatum over the boundary fence.
Let’s see now. We’d have Mrs Walter left, that canny Scot Stewart and
maybe we could persuade the new bloke Thorn to stay. If not, too bad
for him. Maybe promote a couple of the blokes on the EGM
committee. We got Kerry McDonald, John Moule and Sir David Fell to
choose from. The Magnificent Seven seem to have full confidence
in them and none of them have said they couldn’t work with Mrs
Walter. We’ll just appoint them up to the December EGM and
see how they go. Some new directors with banking experience will come
aboard pretty smartly I’m sure. And just to make sure everything is
sweet, APRA might like to nominate its own candidate to keep an eye on
things up to the next AGM.
Hedley: I think that would be commercial suicide. We need to preserve the corporate memory.
Large institutional local shareholder: Hedy, I like that last
suggestion of Don Boardwalk’s. I don’t think there will be too much
loss of corporate memory. And we just want to forget you lot. Running a
bank isn’t rocket science. It’s mostly a procedural operation so far as
I can see. There will certainly be no loss strategically. The place has
been a strategic desert for years. A nice clean break may be just the
ticket. Out with the old, in with the new. A clean slate. Otherwise
this stench will continue and worse, will cost us all money. Death of a
thousand cuts. And it’s not as if we can just dump the stock. It’s a
major part of the index. Better I say to take any short term lumps now.
Who knows, the share price might go up. Surely it can’t do much worse
than over the last five years. It was thirty dollars when Don Argus
bailed out in April 99 and Frank came in. It’s still thirty dollars.
I’m sure us chaps can come up with some suggestions for new blood on
the board over the next few months. We get on well with this Scottish
bloke. He’s on the same page as us.
Barry Banker: Well running a bank certainly isn’t rocket
science, which is lucky for us given the past performance of
Hedy’s Magnificent Seven. And the new Board that’s been proposed should
maintain continuity and purge the bank’s arteries. Give some of the
youngsters in the bank a chance to show their mettle. No old
positions to protect. We might even find out more about Homeburn.
And APRA can probably retire the training wheels sooner. How do we
proceed from here?
Don Boardwalk: Looks pretty straightforward to me. We just vote
against firing Mrs Walter right now, accept the resignation offers of
Hedy’s gang of seven which will then be automatic, and ask APRA
to appoint one or more temporary candidates of its choosing to the
Board if they wish. The Board can appoint the new directors after
the meeting and they can stand for election by the shareholders at the
AGM. Mrs Walter I’m sure will resign at the AGM and may or may not
offer herself for re-election. That should keep things ticking over
nicely until a couple of new directors and a permanent Chairman can be
appointed to the Board over the next few months. Who knows, the new
directors might do quite well. And no-one needs to worry about any more
ultimatums from Hedy and Co. In the meantime, Johnny Stewart can
get the management back to work and concentrate on making the
shareholders some money and getting the share price
Hedley: Wait a minute, I’m running this show, not you lot. You can’t do this.
Elderly Female Shareholder: Actually we can Mr Lamarr, and
you know why? Because we own the company and we decide who the
directors are, not you. After the first vote on Mrs Walter, if
you lose, we’ll gratefully accept your resignations.
Hedley: But I’ve already resigned from some of my other boards, like News.
Large institutional local shareholder: Resignation experience is very
handy in these trying times Hedy. Go talk to Rupert and see if he’ll
have you back.
Hedley: Its Hedley…..