Maybe NAB board should be sacked instead of Henry and Thorburn

The National Australia Bank should keep its chairman Ken Henry and CEO Andrew Thorburn and instead immediately sack all the other directors except for one, writes Terry McCrann.

Outgoing NAB chairman Ken Henry. Picture: Britta Campion

OK. It’s looking increasingly like we all got it exactly the wrong way round. The National Australia Bank should keep its chairman Ken Henry and CEO Andrew Thorburn and instead immediately sack all the other directors except for one.

I am only half joking. Henry and Thorburn still have to both go; the die is too far cast on both of them. If go, not exactly for the reasons proffered.

KEN HAD TO GO AND PHIL HAD TO STEP UP

MORE TERRY McCRANN

Henry has to go — had to go, some months ago — because he got an 88 per cent shareholder vote of no confidence in his chairmanship at the AGM.

Not for committing the abominable offence of lese majeste of a royal commissioner and his two baying bloodhound pups.

Indeed, the more I think about it, the more I’m convinced that Henry got not just a bad but a completely misinformed and malformed rap for his appearance before the RC.

He actually tried to engage with both the RC process and its underlying ethic both honestly — too honestly, it is clear — and even more critically, on its own, rather nauseatingly touchy-feely, ‘culture’ terms.

If there was one person of all the witnesses who was actually sympatico with the idea that banks had broader and more fundamental obligations to its customers and to the community than merely making profits for shareholders it was exactly Henry.

To repeat: while Henry might have come out dismissive, he was actually being discursive, trying to come to terms with the very heart of the issues the RC was posing.

Most everyone else of note just played their ‘show-trial role’: turn up, confess their sins, and promise to embrace the required ‘New Culture’, with a capital K.

Instead of a taxi for NAB chairman Ken Henry, maybe the rest of the directors should be axed. Picture: Britta Campion

As for Thorburn, it remains unclear just exactly what his crime or crimes has/have been, apart from some appalling misjudgment — in particular, his holiday and that most unfortunate and very ill-considered joint statement with Henry the day after the report surfaced.

He has got no credit — and that word is used advisedly — for falling on his sword, genuinely in the best interests as he saw it of the bank and its customers, to both of which he has a clear and serious emotional commitment to.

To walk away with just $1 million seems to me to that he has been very badly done by.

Let’s not forget it was the board that signed off on that joint statement, with not one publicly dissenting voice.

It was the board that agreed to Henry staying and, initially, to lead the selection of a new CEO.

And now it is the board that has come up with the completely cack-handed approach of having one group of directors select a new chairman and another one the new CEO — demonstrating in the process an utter inability to understand the reality and the dynamics of board leadership.

It is instructive that it took a non-business leader in the person of former treasurer Peter Costello to inform the NAB board of what was required: that Henry could not oversee the selection of the next CEO.

It is more broadly instructive — and depressing — that no other prominent actual supposed business leader went publicly on the record with the same advice.

Inoming NAB acting chief executive Phil Chronican.

Yesterday’s statement from the NAB board now makes it blindingly clear this board cannot be trusted to select the next chairman.

It can’t be trusted to select either the next chairman or the next CEO. But the chairman comes first; has to come first.

Now I suspect that Costello’s instruction was driven by a certain animus towards his former treasury secretary. But he was right nevertheless.

The next chairman has to select the next CEO — for the most basic of reasons: the next CEO has to know under who’s leadership he will be working.

At the moment all any candidate knows is that they will be working with an incoherent rabble.

There is only one course: the highly respected and calming former ANZ and Westpac banker (and current non-executive director) Phil Chronican should agree to stay as acting CEO for at least 12 months.

He’s the one exception, from my opening paragraph, of current directors to stay. All the other must go and go quickly, if staggered.

If there are any still lingering by the AGM at the end of the year, shareholders should — must — sack them. Chronican should then lead the — a-changing — board to find a new chairman and do so in a considered, not rushed, way; maybe even himself.

But, whatever, the new chairman and new board should take their time to find the right CEO.

GOOD NEWS ON WAGES, NOW FOR JOBS

THE wages data from the ABS yesterday was one key component of ‘the answer’; the jobs numbers today will be the other.

The ‘answer’ to what? To the broad overall state of the economy; to where it looks like heading; and thus whether the RBA is ‘right’ about its neutral interest rate stance. As long as we get some growth in wages and even more that we get solid jobs growth, the economy is not heading over a cliff, even with the fall in the property market.

Slowly growing wages, more and more people in jobs — and the big fall in home loan repayments from the big fall in interest rates since 2010 — will keep borrowers servicing their loans and maintaining spending.

I would go further: beyond the plus for the economy a 2 per cent wages/ 2 per cent jobs growth mix is a lot better and fairer than a 3 per cent wages/1 per cent jobs growth mix.

Originally published as Maybe NAB board should be sacked instead of Henry and Thorburn