Michael Pascoe writes:
AWB chief Andrew Lindberg
is having another difficult day under the Cole inquiry spotlight, but the stock
market is already passing its verdict with the shares plunging another 29 cents
to $5.73 by lunch time.
The shares had already lost 5.5 per cent of
their value over the first two days of the inquiry with some of that fall being
attributed to AWB being dumped from the Reputex ratings agency’s socially
responsible investment index and reports that all SRI funds would be at least
reviewing their AWB holdings.
Reputex associate research director Philip
Cohn said the allegations already aired by the Cole inquiry highlighted
inadequate due diligence and oversight systems.
And that’s not even the half of it. AWB’s
ethics free status is demonstrated by its own reaction to the initial Volker
report on oil-for-food corruption, let alone the protestations of innocence
when the company appears rotten over several layers.
A reasonably ethical corporation when
confronted with such damning evidence of misbehaviour might be expected to not
wait for any official outside inquiry but immediately conduct its own internal
investigation and take proper action. AWB seems to have just been concentrating
on protecting backsides instead.
This compares with DaimlerChrysler –
another high-level offender fingered by Volker.
The Benz makers have reportedly suspended between six and nine managers
so far while “still investigating the claims and passing information about certain
accounts, transactions and payments involving government entities to both the
US Securities and Exchange Commission and the Department of Justice.”
What’s the AWB done? Hired lots of lawyers.
Andrew Lindberg’s pay packet has been reduced from last year’s $1.85 million,
but that’s related to wheat prices.
Thus it’s not just the directors who were
on board during the kickback payments and general exploitation of the Iraq
situation who deserve censure. The rest
of the current board also needs to explain which parts of corporate governance
and ethical behaviour they don’t understand.
Among the dangers now facing AWB is that
the board’s lack of appropriate action will see it go the way of James Hardie –
a loss of credibility even if it tries to put its house in order. It is already
totally untenable that such a damaged organisation should retain the right to
veto wheat exports by its Australian competitors. Somebody take the dead cat
out and bury it.
We were wondering whether Lindberg would go
the incompetence or the complicity routes in his evidence. Yesterday’s effort
indicates incompetence. Fancy a CEO not knowing what was going on with such a
key contract or reading the various reports his staff prepared for him.
But when there’s so much forgetfulness