The spectacular MFS Limited implosion has scored a direct hit on the corporate reputation of its independent chairman Andrew Peacock, the former Liberal Party leader and Australian ambassador to Washington, as well as its senior executives.

Step forward Taso Corolis who sat at the company’s nerve centre as its compliance and risk manager and is listed number six in the top management team.

Amid considerable fanfare he was hired from the Australian Prudential Regulation Authority (APRA) in April last year after 10 years with the financial regulator.

Corolis was known throughout the industry superannuation funds business, the no-fees funds linked to the trade unions and other professional bodies.

As senior manager in APRA’s specialised institutions division, he pursued industry funds with relentless zeal concentrating on their governance, perceived lack of transparency and conflicts of interest. In response, industry funds continued to grow and their members prospered.

At that time, APRA (though not necessarily Corolis) viewed industry funds as a virus of creeping socialism devised by Paul Keating and Bill Kelty to infiltrate and eventually seize the stock exchange, oust the bourgeoisie from its board and put union bosses in charge. This eccentric view was encouraged by Prime Minister John Howard and some of his more fanatical advisers who have now moved on to private banking careers. APRA wanted capitalist chappies running industry funds: men (very few women) from the professional classes who had the right connections, the best private schooling, belonged to the right clubs and lived in the best suburbs. Indeed, very like the wonderful folk from MFS.

Members of the Australasian Institute of Credit Union Directors recall with relish the April 2005 issue of Directors’ Brief with this editorial:

The major international momentum aimed at strengthening and enforcing corporate compliance and governance is stipulating the way boards run and control the business from the top down.

Acknowledging that reprisals after corporate failures provide little comfort or compensation for stakeholders, the regulatory and prudential focus has now shifted from ‘post mortem’ to ‘preventive action’ by insisting that institutions are properly run and controlled by the directors.

APRA will be checking to ensure boards comply, as outlined in a presentation from Taso Corolis, senior manager, specialised institutions division.

Anyway, last Friday a group of highly successful industry fund executives met after work in Canberra to toast the unfolding MFS career of Gold Coast-based Corolis. They decided the only civilised thing to do was to wish him well as he works overtime to tackle the group’s governance, risk and conflict issues.

Another round of doubles, please bartender.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey