Will chairman David Gonski’s personal stamp on ANZ endure with board changes looming?

After six years as ANZ chairman, David Gonski has activated a succession plan that will install fellow Singapore Inc alumni Paul O’Sullivan, 59, as heir apparent. Picture: Hollie Adams/The Australian

ANZ’s leadership has been a rare oasis of stability through the nightmare of the Hayne royal commission and Austrac’s no-nonsense take-down of the Westpac and Commonwealth Bank boards.

But that’s all about to change, more through length of tenure than anything else. After six years as ANZ chairman, David Gonski has activated a succession plan that will install fellow Singapore Inc alumni Paul O’Sullivan, 59, as heir apparent.

As convention has it, O’Sullivan would then be in a position to choose a successor to chief executive Shayne Elliott, who will have clocked up five years in the job by the end of this year.

The handover of the chairman’s baton — likely to take place after the annual meeting on December 16 — is not etched in stone.

There has also been a measure of support for Paula Dwyer, chairwoman of the ANZ audit committee, although she is rubbing up against the bank’s board renewal policy. The policy, which is an Australian Prudential Regulation Authority requirement, specifies a nine-year limit on board tenure, or three terms of three years.

Dwyer, 59, became an ANZ director in 2012 and is due to retire next year. Clearly, she would not be a long-term choice. As chairwoman of Tabcorp since 2011, she also has been targeted by a group of institutional shareholders in a long campaign over the gambling giant’s lacklustre performance.

In a surprise announcement last Thursday, Tabcorp said chief executive David Attenborough would leave in the first half of next year, with Dwyer to retire before the end this year.

While Dwyer’s exit had been flagged, the departure of the duo followed a letter in the preceding weeks from influential shareholders including Perpetual, Investors Mutual and Pendal Group.

The funds excoriated Tabcorp over its performance, with Anton Tagliaferro from Investors Mutual subsequently confirming his view that the company had “underperformed quite significantly”.

The troubled integration with Tatts, especially the merger of the TAB and UBET wagering divisions, became a flashpoint for Tabcorp investors, who lodged a 34.6 per cent protest vote against Dwyer’s election at last October’s annual meeting.

Even if you ignore the board renewal policy, recent events haven’t provided the best platform to launch a run for the ANZ chairman’s position.

As for other candidates, Ilana Atlas, a director since September 2014, also gets mentioned in dispatches. It’s no surprise because Atlas, 66, is part of Gonski’s extensive board network in Sydney, succeeding him as chairman of Coca-Cola Amatil in 2017.

While qualified for the job, Atlas soon would run up against the same tenure limit as Dwyer, and there are unconfirmed reports that she also will step down from the ANZ board in the not-too-distant future.

O’Sullivan now has the rails run in the internal race to succeed Gonski, despite a lack of banking experience and becoming a director only last November.

Previously the chief executive of Optus, he has been chairman of Singtel Optus from 2014 and a director of Coca-Cola Amatil since 2017 — the same year Atlas succeeded Gonski as chairman.

Gonski’s personal stamp

It looks as if Gonski’s personal stamp on ANZ will endure beyond his retirement, which also marks his effective withdrawal from public company life.

Any objective assessment of his time as the bank’s chairman would be mixed — an achievement in itself given the turmoil the industry has faced in the second half of his tenure.

To its credit, ANZ so far has escaped the anti-money laundering tentacles of Austrac. For that reason alone, Westpac and Commonwealth Bank can look at their smaller Melbourne rival only with deepening shades of envy, although there is no such thing as a permanent leave pass from the financial intelligence agency.

Gonski also managed to avoid royal commissioner Ken Hayne’s blowtorch, in a tribute to his public humility and the perception of Elliott as acquiescent and regretful in his testimony.

Hayne detected different forces at play when Ken Henry and Andrew Thorburn from National Australia Bank fatefully entered the witness box.

Within a week of Hayne’s final report, in which the commissioner said he wasn’t confident that NAB had learned the “lessons of the past”, they were both gone.

Later in March last year when the dust began to settle, Gonski told an Australian Institute of Company Directors conference that “anyone who sits on a board and is arrogant or aloof is a fool”. The same applied, he said, to those who “disrespect” the regulator.

Unfortunately for shareholders, ANZ hasn’t exactly shot the lights out in its business performance. The bank remains significantly underweight in retail banking, and while Mark Whelan has engineered a turnaround in the institutional division, crushingly low global interest rates have compounded the difficulty in extracting a reasonable return.

Elliott, as a former ANZ chief financial officer, has a strong handle on costs; more specifically, cost reduction. After driving the cost base down to $8.6bn, the lowest level since 2013, his next objective is $8bn by 2022.

It’s an aggressive target, made possible only by an overarching simplification process.

By then, however, Gonski will be long gone, and his timing is likely to have been favourable.

Next March, the banks will confront fiscal and loan deferral cliffs that are likely to result in a spike in bad debts.

Welcome to the new cycle in banking, Mr O’Sullivan.

[e-mail] Twitter: @Gluyasr