What is it about the boards of Australia’s biggest companies and their refusal to appoint Australians as CEOs? ANZ this morning announced its decision to replace Scottish CEO John McFarlane with Englishman Mike Smith, who has spent 29 years with HSBC.
Whilst Smith looks to be an excellent choice given his vast experience in Hong Kong and ANZ’s position as the most Asian of our Big Four banks, the appointment is a slap for the internal candidates and explains why Steve Targett quit last week.
This trend started way back in 1993 when Westpac appointed American Bob Joss to try and stabilise the bank after it almost went broke. The most spectacular failure came when AMP appointed American George Trumbull in 1996 and he almost sent what was once our most venerable financial institution broke.
Whilst the trend is certainly justified when Australian managers have failed, the current crop of local CEOs are performing very well. Yet boards continue to opt for the outsiders as the following chronological list covering the last three years reveals:
National Australia Bank: replaced Australian Frank Cicutto with Englishman John Stewart in early 2004.
Woodside Petroluem: replaced Australian John Stanhope with American Dan Voelte in 2004.
Telstra: replaced Australian Ziggy Switkowski with American Sol Trujillo in 2005.
Amcor: sacked Australian CEO Russell Jones and replaced him with Canadian Ken McKenzie in July 2005.
Commonwealth Bank: replaced Australian David Murray with Kiwi Ralph Norris in 2006.
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AGL: replaced Australian Greg Martin with Welshman Paul Anthony in 2006.
Rio Tinto: replaced Australian Leigh Clifford with American Tom Albanese in early 2007.
BHP-Billiton: replacing American Chip Goodyear with South African Marius Kloppers later this year.
ANZ: replacing Scot John McFarlane with Englishman Mike Smith later this year.
So who was the last Australian appointed to a big CEO job? After Mike Luscombe at Woolworths there aren’t many, partly because a lot of our incumbent local CEOs, such as QBE’s Frank O’Halloran, Macquarie’s Allan Moss and Westfield’s Frank Lowy, have been in their jobs for more than a decade.
ANZ has once again confirmed today that when the really big companies go hunting for a new CEO, Australians just don’t shape up.
Sadly, the same can’t be said for our biggest boards. It is ridiculous that ANZ chairman Charles Goode is going for another three-year term at the 2007 AGM after serving for 16 years, the last 12 as chairman. All other directors must quit after 15 years, so why shouldn’t Charlie as well?