If a non-executive director perceives his
company is on the nose, might have
committed illegal acts and could be headed for a PR disaster, is it acceptable
for him to just quietly fold his individual tent and slip away without putting
his lips near a whistle?

It’s a regular concern in theoretical
discussions about how NEDs should
behave – but it could become a very real concern for St George shareholders and
the parties charged with keeping an eye on the health of the Australian banking

John Thame is chairman of St George Bank.
From April 1999 until he resigned in March 2005, he was a director of AWB.
Through the St George media office, Crikey has tried to ask Mr Thame why he
resigned and whether it is acceptable to a NED to quietly jump ship when a
company is in trouble, but he had no comment to make. For its part, the bank
said it also could make no comment as the Cole inquiry was underway etc etc.

Which leaves another information vacuum in
which to offer opinions. John Thame in time might well say he resigned from AWB
because he had taken on the extra responsibilities of St George chairman in the
latter part of 2004, but the disaster
starting to unfold at AWB could have been on his mind as well. He doesn’t seem
to have resigned any other directorships.

In evidence already given to the Cole
inquiry, it looks like Thame was quick to grasp in December 2004 that there was
scandal in the very dodgy deal AWB did to inflate the price of wheat to recoup
an $8 million “debt” Iraq allegedly owed to the shady little Tigris outfit,
courtesy of BHP – and pick up $500,000 commission for its troubles, as well as
higher fees from wheat growers. Incredibly, the AWB board decided it was an
operational matter and left it to management to deal with.

The company secretary’s notes
record Thame as saying about Tigris over three board meetings in December 2004
and February 2005: “PR risk is high, don’t rely on legal situation”, “Smell”,
“Might hurt now. Wisdom of hindsight, wished hadn’t done that. Notified D&O

The insurance reference is in regards to
directors’ liability insurance. And then Mr Thame was quietly gone.

St George shareholders should be asking
their chairman to very fully explain why he quit AWB. They might wonder if St
George found itself in trouble, would their chairman quietly resign before that
trouble became public?

APRA and the RBA should be wondering if
someone who did nothing as a director in that AWB/Tigris situation is the sort
of person they can trust with the chairmanship of our fifth biggest bank.

And ASIC and the ASX should again try to
grapple with exactly what a NED should publicly say or do if he or she lands in
John Thame’s position on the AWB board, or Carolyn Hewson’s position on the AMP
board when it was heading for disaster.