Has the NAB turned over a new leaf? Can NAB’s latest expensive executive
and director hirings surmount an apparently unrepentant and virulent
culture at the ‘national champion’? Read on to find out.
NAB’s CEO John Stewart has been “on board” the wallowing ship NAB for a
year now, more than half as CEO, and has just presided over a rash of
new hiring initiatives.

Has anything really changed? Will anything really change? And more to
the point, will the market dance to this cultural two step unless they
see real evidence of fundamental change for the better? The portents
are not looking good.

The James Hardie asbestos tragedy has shown that a profit at all costs
culture can end up costing shareholders big time and for shareholders,
the means does not justify the end. Check out what leading Sydney Morning Herald journalist Alan Kohler had to say in his column on 3 August here – Mindless capitalism fails the conscience test

Notice that NAB didn’t escape a mention either. So why was NAB so
silent on its disgraceful National Irish Bank activities. Check out the
local Irish view at Western People – The shaming of an Irish bank

NIB might just as well have been on another planet and not a wholly
owned subsidiary of NAB. Despite Stewart being in charge of NAB Europe
since August last year, the NAB board periodically swanning around the
UK and senior NAB legal people from Melbourne visiting NIB, who would
have thought that NIB was in danger of being shut down by the Irish
bank regulator and NAB shareholders doing their dough in Ireland?

Not a squeak from 500 Bourke Street. Not a squeak from the NAB’s
auditors. Not a squeak from APRA. Not a squeak from the local Aussie
media. No local explanation on the NAB website. Nothing. Zilch. Talk
about hear no evil, etc etc.

And what was Chairman Kraehe and the NAB risk management committee
doing all this time? One would have thought the potential risk of a
complete loss of NIB would have shown up on the risk radar. Nope. Maybe
Graham was asleep at the console or perhaps it was just switched off
behind the whiteboard.

It’s early days yet, but Stewart’s new head of corporate sanitation, Ms
Lynne Peacock, doesn’t seem to have made much of a positive impact yet.

What of the highly trumpeted new CEO ex BCG/Citigroup and the new project management guru ex PwC/IBM Consulting?

Skilled consultants and business advisers can be very valuable
commodities in the right hands. But where are the right hands? Or are
they the old hands?

NAB has had a disastrous record with super high priced consultants.
Look no further than McKinsey’s Positioning For Growth shambles, the
zillion dollar Deloitte software fiasco and the legally-steered
Homeside drive to disaster. Target driven? Or pin the tail on the

Making the transition from consultant adviser to someone making the
pace is not a sure thing. Consultants and doer leaders are very
different people. What have these two hot shots actually done? What
have they ever project managed and built? Did it work and how well?
Were they instrumental or just part of some good looking operating
furniture in nice suits and a sharp haircut?

NAB shareholders will now have the chance to see Stewart’s high-priced
experiment put into action. Of course, Stewart won’t be riding to the
finish with them. He will be gone by then and it will be a case of
thanks for coming.

NAB has been long on rhetoric and short on detail. If the shareholders
feel a little short changed, they can always ask more questions. After
all, they are paying for it, and how.

An acid test for the new board and their ‘cultural’ makeover will be
whether they release the ‘legally privileged’ Homeside report into how
the bank came to blowup $4 billion or so. Or will the new board erase
the past and blindly endorse the previous board’s lack of judgment?
They won’t if they want the share price to go up.

The James Hardie, Homeside and National Irish Bank imbroglios show just
what can happen when lawyers, good and well meaning as of course they
all are, allow their organisations to embark on high legal risk courses
without regard to the impact on the organisation’s store of
reputational capital and the risk management consequences.

No strong board can afford to hide behind pettifogging lawyers because
in the end, it just doesn’t work. In the real world of customers and
business alliances, no amount of PR spin and advertising can compensate
for the damage done.

Sydney hotshot legal entrepreneur and late-starter as a new NAB
director, Danny Gilbert, may have been taken aboard to give the NAB’s
legal operations the once or twice over. Of possible interest are the
circumstances of NAB’s general counsel David Krasnostein getting
locked out of his office during the PwC – currency trading
investigation, to say nothing of Stewarts earlier remarks about the
currency traders which have not been substantiated by police or legal

One thing is for sure. Gilbert will be the man for the job on the NAB
Board to vet whether the legal advice the NAB’s legal department
proffers the board also makes good business sense with minimal business
and reputational risk. The old board and management failed the test in

Finally, when will director-elect cum chairman-elect Michael Chaney
actually step up to the chair? There is something bizarre about
having a new chairman of such a large organization waiting in the wings
for a mooted year and a half while his predecessor
comprehensively renovates the board and senior management.

All Chaney would say about it last week was to mumble something about
succession planning at Westfarmers taking precedence. Not good enough
St Michael. Westfarmers is in good hands and the new NAB chairman must
be seen to be taking overall responsibility for the new board and
management appointments.

All this shows there is a long, long way to go at 500 Bourke Street
before reality bites. At the moment it looks more like the proverbial
‘same ol’ sh-t, different bucket’.