Occupy Wall Street banged on about it. Karl Marx theorised about it. At the University of Wollongong there’s even a research centre for it. If we adopt the premise that capital is power, then there shouldn’t be any hesitation in anointing Lindsay Maxsted Australia’s standard bearer of boardroom influence.
The former corporate work-out specialist came in at No. 1 on the Optimice Market Capitalisation Influence Index with over $200 billion (about 16% of the total ASX) sitting under his wing thanks to directorships of two of Australia’s five biggest companies — BHP Billiton and Westpac, the latter of which he chairs.
Crucially, he’s also the 15th most connected director on the MCII with $8.7 trillion flowing from his first degree contacts across those two and his second ASX chair at toll road goliath Transurban. In fact, in some ways the 58-year-old Maxsted is capital, overseeing it with a fine tooth comb as a KPMG cadet and then pumping the stuff into flailing firms as the same company’s CEO 30 years later.
“He’s just fastidious … the reason he’s valued is he pores over numbers until he can engineer required outcome,” one leading proxy adviser told The Power Index.
Just like his executive glory days, the Collins Street office of his boutique private advisory firm Align Capital continues to hum with the mantra that all can be solved if debt and equity is shunted in the right direction. The Australian Shareholders’ Association agrees Maxsted is “highly influential” and say it’s his oversight of three major economic pillars of banking, mining and infrastructure that mark him out.
But his chairmanship of the country’s second-biggest bank with a hulking market cap of $79 billion is crucial. Compiling this list The Power Index has been careful to emphasise the role of the Big Four, with a combined value now exceeding eurozone counterparts. New research released this week shows 53% of each bank is owned by the same small number of institutional investors.
Westpac’s profit was $6 billion last financial year out of a total Big Four take of $22.8 billion — CEO Gail Kelly took a pay cut but still walked away with $9.3 million. The coalface decisions may rest with Kelly but it’s Maxsted that looks at the bigger picture, deciding where capital flows and ultimately if Australian businesses and consumers sink or swim.
Maxsted, a keen punter, is from the old school, an era when employees would give their loyalty and a large chunk of their lives to a big firm, content it would be able to provide for them. Starting as a pimply KPMG cadet and finishing as a stubbly CEO sounds these days like a warped fairytale.
He gleaned some important friends along the way, especially from chums David Ryan and David Crawford. “David [Crawford] was the doyen of insolvency at the time and I hung onto his coat-tails,” he once confided to industry peak body the Chartered Accountants.
As these merry-go-rounds tend to spin, Maxsted followed Crawford onto the BHP board and replaced Ryan at Transurban. Both Crawford and Ryan serve on Lend Lease (Crawford as chair) which is in turn audited by their old firm KPMG. KPMG audits BHP. And Align Capital once advised Lazard, which advised Transurban. At the $6 billion Sydney Barangaroo development, Westpac and KPMG recently signed an agreement to lease 70% of two of Lend Lease’s three commercial towers.
It’s that notorious Melbourne clubbiness that maddens critics — three stars who made their mark dealing with distressed firms during the early ’90s “recession we had to have” remain at the upper echelons of business 23 years later. At least for now.
“I look at that cabal and it’s all very Melbourne and cosy … but I think it’s starting to break down,” a close observer of the clique told The Power Index, noting receding hairlines and recent debates about smashing the so-called “directors’ club” through quotas.
But while the magic KPMG/Allens Arthur Robinson circle (Crawford is an Allens director) could be coming to an end, the comparatively youthful Maxsted is likely to press on regardless. And there’s evidence he might be starting to break out of traditional bean-counter conservatism and embrace public debate — a further fillip to his power profile, especially if the business press can coax him to make more public interventions, like his recent Gina Rinehart-style allegation that the Gillard government didn’t understand business (rather than government) drives economic growth.
The Power Index approached Maxsted through all his official intermediaries but didn’t hear back (“Lindsay has declined the request,” said Transurban, finally, last Thursday), suggesting he’s probably sick of the media’s infatuation with what he regards as bread-and-butter directors’ duties.
Still, with at least 15 years still remaining on his career clock, he won’t be able to escape scrutiny for much longer. Maxsted came under immense pressure last month when Transurban-operated CityLink tunnels ground to a halt after an IT glitch, causing traffic chaos for hours and prompting outraged op-eds from radio jocks and Melbourne luminaries like Eddie McGuire. The next day, at the Transurban AGM, he apologised for the fracas but then, in the next breath, talked about the need to increase peak-hour tolls.
It’s the sort of PR stuff-up that could tarnish a glittering run. And as Maxsted surely knows by now, away from the minutiae of the balance sheet, public power begets public responsibility.
Lindsay Maxsted’s directorships:
- Corporate: Westpac Banking Corporation (chair), Transurban (chair), BHP Billiton (independent NED), Align Capital (managing director)
- Not-for-profit/government: Baker IDI Heart, Diabetes Institute
Lindsay Maxsted’s ASX connections — click to enlarge