Way back on September 3, 2001, National Australia Bank announced its spectacular $3 billion Homeside provision.
It was one of the greatest risk management blunders in history yet just three months later, Cathy Walter, chair of the NAB audit committee, was re-elected by shareholders with more than 99% of the votes in favour.
It’s just one of many examples in Australia of failed corporate accountability, especially in the clubby Melbourne board rooms.
Stan Wallis was chairman of AMP when it lost almost $10 billion in the UK. Rather than being drummed out of the directors’ club, he was last year re-elected to the board of AFIC, Australia’s biggest listed investment company, with 96% of the votes in favour.
Wallis, 69, also still sits on the board of AFIC’s stable mate Amcil, which opened the AGM season at Melbourne’s Hilton Hotel yesterday.
I spoke out against Wallis again yesterday and was slapped down by chairman Bruce Teele, 71, who The Age reports today was compared with Warren Buffett at yesterday’s AGM by fellow director Bob Santamaria.
As general counsel at ANZ, you would think Santamaria would be too busy dealing with Opes Prime than to praise someone who mounted this ridiculous defence of the Wallis record at last year’s AFIC AGM.
Then again, we shouldn’t expect anything less of ANZ given that it installed Jerry Ellis as chairman of its risk committee after BHP wrote off more than $5 billion during his chairmanship in the late 1990s.
Ellis, 71, was last re-elected to the ANZ board in December 2006 with more than 99% in favour.
All of these near unanimous endorsements for directors who presided over huge wealth destruction should give pause for thought when ASX shareholders gather in Sydney for tomorrow’s AGM. It will be a dramatic swansong for chairman Maurice Newman, 70, after 21 years on the board.
Powerful proxy adviser Risk Metrics has recommended a vote against incumbent ASX director Russell Aboud and John Durie today reports in The Australian that the protest vote “is tipped to fall short at around 30 per cent.”
Fall short? That would represent a huge protest vote in the context of Australia’s notorious “99% dud directors club”.
It will be interesting to see if my 30th public company board tilt delivers a result above the long-term average of 15%.
The tilt was structured as a single issue protest vote with a commitment to resign as soon as ASX forces all the Babcock & Macquarie listed funds to release their full management contracts.
Risk Metrics led the campaign for greater disclosure with this path-finding report in April, followed up by this fascinating update last week about the appalling Macquarie and Babcock governance structures which have been accommodated by ASX.
Sadly, it failed to endorse my candidacy which was designed to fix this very problem.
*Go here for the full web package explaining the issues and candidates at tomorrow’s ASX AGM.