Followers of IAG’s
governance and transparency in general will be surprised by revelations
(and omissions) in the 2005 Annual Report, just posted to shareholders.
will be recalled that on 1 September 2003, James Strong’s IAG board
adopted a maximum tenure for non-executive directors and that at last
year’s AGM this was used to – at last – get rid of Anne Keating (and
Dominique Fisher, the wife of Alan Stockdale) since “another completed
term of office by both Directors would take them beyond the maximum
term…” [Notice of Meeting 2004] It will also be recalled that neither
the 2004 Annual Report nor the 2004 Notice of Meeting mentioned the
three separate and unanimous board resolutions in which Keating had
been asked to stand down previously. (See Crikey, 7 November 2004)
now the truth is out: that tenure stuff was all a ruse. Three of the
old boys – John Astbury, Geoffrey Cousins and Rowan Ross – are each
being put up for a further term which will take their total tenure
beyond the seven years formerly deemed a desirable maximum. On page
four of the 2005 Notice of Meeting, we are told that “the Board
may…invite directors otherwise due to retire under the tenure policy to
remain on the board for a further period where the Board has determined
that it is in the Company’s best interests to do so.” And that “the
Board has determined that it is in the best interests of the Company
for these three Directors to stand for re-election…” That is, it wasn’t
in the best interests of the company for Keating to stand again. Pity
they couldn’t come clean about that last year.
And IAG has yet
to disclose to its shareholders that the company paid Miss Keating’s
friend, former NRMA consultant Rob Dempsey, nearly $300,000 to settle a
court case he had brought against the company. Surely shareholders
would be interested in that?
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But there’s more. “The Board has
also decided to review the tenure policy after the AGM to determine
whether it continues to effectively reflect requirements for Director
succession and renewal…” How things can change in less than two years!
Oh, and non-executive directors’ fees are going up, to
$120,000-$150,000 a year and chairman Strong will get a healthy
$520,000 a year.
The old boys network is alive and well in
corporate Australia. Astbury recently joined the Woolworths board,
which Strong also chairs, but Cousins has not taken another prominent
corporate gig since he bolted and resigned from the hapless Globe
International board more than two years ago.