One of the biggest problems with Australia’s corporate governance over the past few decades has been the way a clubby network of powerful Melbourne-based directors have worked against the basic principle of accountability for poor performance.

Don Argus and David Crawford have been at the heart of this club for the best part of 20 years, ever since they emerged as arguably the two most powerful figures in the various debt work-outs sparked by Paul Keating’s recession we had to have.

Argus was the tough CEO of National Australia Bank, the strongest local financier that suffered the least amount of damage from the estimated $30 billion in loans that were written off between 1989 and 1993. Crawford was the KPMG adviser and receiver of choice for the various banking syndicates as they worked through complicated collapses such as Adsteam, Ariadne, Qintex, Bond Corp and the various free-to-air television businesses.

Through this process, Don and Dave became great mates.

When even the big Australian, BHP, found itself in strife with write-downs approaching $10 billion in the late 1990s, Crawford was instrumental in engineering the appointment of Argus to succeed Jerry Ellis as chairman in 2000.

Despite being a BHP director since 1994, Crawford has somehow survived the folly of the various disastrous decisions made up until the appointment of Paul Anderson in 1998. He still serves on the board, refusing to acknowledge that the 2001 Billiton merger cost BHP shareholders many tens of billions of dollars.

Over the past 20 years, Crawford and Argus have been involved in a good number of controversies and disasters. Who can forget the $3 billion NAB lost on Homeside, a risky US investment that Argus championed? No wonder NAB has slipped from No.1 to No.4 over the past decade.

Argus was also chairman of Brambles when it lost 15 million pallets. He was a director of Southcorp when it paid a ridiculous $1.5 billion for Rosemount. Compounding his mate’s disastrous dalliance with wine, it was Crawford who was a director of Foster’s when it then paid a ridiculous $3.8 billion to buy Southcorp in 2005.

There aren’t too many people who sing the praises of Foster’s, yet Crawford somehow escapes criticism for his chairmanship over the past four years when $5 billion in wine losses have been recognised.

One of the best things about the $12.3 billion SAB-Miller takeover of Foster’s is that it will finally get Crawford off the payroll.

The point of all this historical truth-telling is to highlight the sheer chutzpah in Crawford and Argus today fronting the release of a report by the AICD, which attacks institutional investors for following the advice of proxy advisers and voting against some resolutions put up by boards and management at AGMs. The Australian Financial Review got the drop on the report and gave it the full treatment on the front and back page today.

If Crawford and Argus had their way, directors would continue to get re-elected with an average 96% of the vote in favour, regardless of how poorly they have performed. As Crikey has pointed out previously and explained directly to Argus at various AGMs, no Australian director has been associated with more unjustified payouts to former CEOs than the man they call Don’t Argue.

Here are his top 10 efforts in all their glory:

  • Don Argus: NAB, $9.26 million
  • John Prescott: BHP, $11.17 million
  • Tom Park: Southcorp, $10.1 million
  • John Fletcher: Brambles, $8.65 million
  • Paul Anderson: BHP, $18 million
  • Brian Gilbertson: BHP, $30 million
  • Frank Cicutto: NAB, $8 million
  • Keith Lambert: Southcorp, $6.2 million
  • Sir CK Chow: Brambles, $4.1 million
  • Andrew Michelmore: WMC, $10 million

And now he has the temerity to argue that proxy advisers have too much power when institutions follow their recommendations and vote against various remuneration reports at poorly performing companies where executive pay has got out of hand.

Finally, if David Crawford really believes in accountability, why does he continue to protect his old KPMG mate David Ryan, who is coming up for election again at the Lend Lease AGM on November 9 in Melbourne?  Ryan was chairman of ABC Learning when it collapsed in 2008, costing investors and lenders more than $3 billion in losses.

Crawford turns 68 in January next year and Argus is 73. It’s time these old dinosaurs took their chequered records and exited stage left once and for all.

Maybe the proxy advisers should recommend David Crawford be removed as Lend Lease chairman.

Peter Fray

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Peter Fray
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