adviser Proxy Australia got a huge run in this morning’s papers with
its path-finding research into how Australia’s directors’ club works.
Even The Australian’s Robert Gottliebsen weighed in with this comment piece.

figures confirm what we’ve known anecdotally for a long time – that the
directors’ club has a shallow gene pool and too few directors are
taking on too many gigs. Proxy Australia breaks the club into two pools
– the first is the 825 directors of ASX200 companies and the second is
the 5,000 other directors of smaller listed companies.

It seems
that once you have made it on to your first ASX200 board, your
prospects of being offered more spots dramatically improve. The
concentration of power is best demonstrated by the fact that corporate
Australia has ignored the ASX Corporate Governance guidelines which
recommended no-one should chair more than one top 100 companies. Two
years later and there are still eight double dippers.

Reserve Bank is clearly not too worried about a wages break-out,
although we’ve got one on our hands in the boardrooms as average pay
soared 22% to $104,000 last year. CEO pay appears to also be rising at
a similar rate, especially when you include profits on equity schemes.

Retired CEOs still dominate the upper echelons of the directors club
with the likes of BHP-Billiton chairman Don Argus and Woolworths
chairman James Strong. Accountants are also quite prominent with good
examples being Qantas chair Margaret Jackson and Coles Myer chair Rick
Allert. Then, of course, you have all the lawyers such as Tabcorp
chairman Michael Robinson.

In terms of professions there are lots of engineers (Ken Moss and John
Schubert) but two industries which are surprisingly poorly represented
are IT and advertising.

The strange thing about director elections is that the biographies
often don’t detail the precise skill they bring to the board. A typical
annual report simply cites their age and the other board seats they sit
on, as if that is some sort of qualification.

Then you have the strange phenomenon of unexplained resignations – such
as when Michael Robinson quit Seven shortly after Kerry Stokes took
control and when Carolyn Hewson quit the AMP board shortly before the
whole thing went pear-shaped.

Until we get a culture of “walk and talk” with director resignations,
the inside drum on what is really going on inside boardrooms will
remain sadly elusive. And the Cathy Walter experience with NAB last
year will, if anything, make other directors even more reluctant to
speak out.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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