It was always a slightly strange appointment to make career corporate lawyer, Tony D’Aloisio, the chief executive of ASX Ltd 20 months ago. The bloke had no experience running a company, let alone a lucrative monopoly with a quasi-regulatory role.
The single most important role for any ASX CEO is to keep out of sight of the regulators, who might one day blow the whistle on the fact it has massively abused its monopoly position to deliver a 200-fold return for the lucky 606 stockbrokers who owned the operation before it was demutualised and privatised in 1998.
Chairman Maurice Newman AO, an old mate of the PM, has served that role quite well and former CEO Dick Humphry was also tight with the Liberal Party. To cover its Labor bases, the ASX board brought in Kim Beazley’s former chief of staff, Michael Costello, to be deputy chief executive and, surprise surprise, there were no complaints from the ALP when this not-for-profit regulator suddenly became a massively conflicted gouging listed monopoly.
The problem with D’Aloisio is that he came along with a ridiculously brutal agenda, to cut costs and jack up fees, which was starting to frighten the horses. Internal memos started flying around the internet from disaffected staff who were shoved out the door – an issue that was even raised by Alan Kohler during this interview on Inside Business last year.
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D’Aloisio also appeared soft on regulation and market integrity when he embraced new trading rules that allowed brokers to trade without disclosing their identity and also inexplicably allowed an obviously conflicted Westfield to vote its shares in the GPT internalisation proposal last year.
D’Aloisio was also keen on reducing customer service. The ASX home base in Melbourne at 530 Collins St, complete with the popular public viewing area for trading and lectures, was last week dumped for a much cheaper and smaller leasing deal across the road at the Rialto. Weekly free lectures have also been dumped for much more expensive monthly offerings.
In other words, D’Aloisio was making too much noise and trying to push his monopoly too far – a bit like all those fee increases by Sydney Airport, although it was protected by having the PM’s old departmental boss, Max Moore-Wilton, in charge.
SFE Corp CEO Robert Elstone has done a great job for the past five years and doesn’t appear to have upset anyone. Given that Peter Costello appointed him to the Future Fund board, he also has that all important good relationship with the most important regulator.
It’s a sad reflection on corporate concentration in Australia, but the combined ASX-SFE must do all it can to stay sweet with politicians and regulators. The trick is to be subtle and not to get too greedy, and D’Aloisio was not performing well on either score.