Dig Howitt beats a hasty retreat from National Foundation for Australia-China Relations

Cochlear CEO Dig Howitt. Picture: James Croucher

Cochlear CEO Dig Howitt couldn’t get off Australia’s new China foundation fast enough.

Foreign Minister Marise Payne confirmed on Monday that Howitt was the latest Australian corporate to call time on the fledgling National Foundation for Australia-China Relations Advisory Board.

“I thank outgoing board member Dig Howitt for his valuable contribution to the establishment of the Foundation,” Payne says in a statement.

It was a diplomatic form of words.

Payne had only appointed the hearing-device CEO in late February, less than two months before the Foreign Minister called for a global inquiry into COVID-19 on the ABC’s Insiders program, enraging Beijing.

That was after, Warwick Smith, the foundation’s inaugural chairman and a trusted adviser to Seven billionaire Kerry Stokes, told Payne the $44m fledgling institution was “tortured and unspectacular” in a letter explaining his resignation.

Soon after, the ABC in August reported on the political views of some of the foundation’s advisory board, including Maree Ma, who runs the Chinese-language newspaper Vision China Times which ABC alleged was associated with Falun Gong.

Illustration: Rod Clement

China is one of the fastest-growing markets for the $13bn maker of hearing aids.

And unlike most ASX-listed companies, Cochlear is investing in China-based supply chains. A $90m manufacturing facility in China’s panda capital Chengdu is nearing completion.

Margin Call had heard the Cochlear boss had become concerned about whether his association with the government-funded foundation — which is overseen by Payne’s Department of Foreign Affairs and Trade — might complicate his day job.

But a Cochlear spokesman told us late on Monday it was all about the coronavirus.

“He chose to step down, as since COVID-19, he does not have the time to commit to the foundation,” the spokesman said.

Smith has since been replaced as chairman by former BlackRock executive Pru Bennett.

Meanwhile, the spot left by Howitt has been filled by NAB chair Phil Chronican.

NAB has a presence on the Chinese mainland, although the bank’s Beijing and Shanghai offices are minor outposts compared to Cochlear’s operations.

And word has it that the NAB chair’s son is a budding sinologist.

No wonder there’s some optimism Chronican could make it through his full two-year term. On current form, even getting through the first year would be an achievement.

Going green

Climate change is set to be a sore spot for major bank bosses Shayne Elliott and Ross McEwan in the upcoming AGM season, with lobbying from green groups already prompting the inclusion of new resolutions at both banks.

Financing for the oil and gas industries has been a major point of contention, as highlighted by lobby group Market Forces, but shareholder votes to date have failed to get any green reporting standards across the line.

That will again be tested at ANZ’s annual general meeting on December 16, and NAB’s meeting, which follows just two days later.

ANZ CEO Shayne Elliott (right) and chair David Gonski in 2019.

Resolutions put forward by the green group ask shareholders to vote on amendments to the constitution to allow for “advisory resolutions”, as well as a request for disclosure of reporting, strategies and targets to reduce fossil fuel exposure in line with the Paris targets.

Each are the same as were put to investors at last year’s meetings, the failure of which was conveniently highlighted by ANZ in its filing on Monday: “The resolutions … are in the same form as the resolutions proposed by shareholders represented by Market Forces at ANZ’s 2019 annual general meeting, which were not approved by shareholders.”

Recall that last year chairman David Gonski touched on the topic with trepidation, saying ANZ “from time to time may take positions on certain matters not supported by the relevant industry association”.

It seems ANZ would rather set out its climate change plan in its own terms, pointing to a “suite of forthcoming policy changes” scheduled to accompany the group’s full-year results announcement later this month.

Meanwhile, comments from McEwan at a trans-Tasman business function on Friday give some insight into the board’s thinking on climate change … it is all a matter of time.

“We need the plans to actually go there and the time frames that we live with and that’s what we’ve done as an organisation. But it is transition, you can’t just stop one thing and move onto another,” McEwan said.

“We are the largest providers of finance into renewables in the Australian marketplace, we are I think the 12th-largest bank in the world on renewables … but I get criticised for having $700m of thermal coal that we are quietly extracting ourselves
out of.”

The December meeting will mark McEwan’s first anniversary at the bank after the exit of former chief Andrew Thorburn and chairman Ken Henry in the wake of heavy criticism at the banking royal commission.

No doubt he’ll be hoping not to mark the occasion with a first strike, but can we suggest a copy of Sir David Attenborough’s latest doco might just do the trick.

Vinva feels the pinch

Quant-driven fund Vinva Investment Management has been one of the quiet success stories of the funds management sector in the last few years.

Vinva keeps a low profile but has been managing tens of billions of dollars for some of Australia’s biggest superannuation and investment funds, pursuing a combination of active long-only and long-short strategies.

It had paid its staff, led by managing director Morry Waked,huge dividends in the process, racking up large profits year after year.

But COVID-19 has at least slowed the profit growth and paydays.

Vinva was sailing along in good shape until March, according to the boutique firm’s annual financial report just lodged with the corporate regulator, when the world as we know it started falling apart and markets plunged.

Vinva Investment Management’s Morry Waked

Vinva suffered accordingly, seeing its funds under management which had been growing spectacularly for a few years, drop about $4bn to $24.9bn by June 30.

“The coronavirus outbreak that developed and spread across a significant number of countries resulted in a disruption to economic activity and global markets,” the Vinva report for the 2020 financial year says.

“Revenue generated by the company is based on assets under management which are affected by market performance.”

This has put a bit of a dampener on the 10-year anniversary of Waked leaving BlackRock in 2010, assembling a team of other ex-Barclays Global Investors employees such as Nick Burt, Robert Cochrane and Andrew Jackson, to name just a few.

But it is hard to feel too sorry for the Sydney-based group, which still managed to record a $21m net profit for the year from $52m revenue — though both figures were down on the $27m profit and almost $63m income result for 2019.

They also paid themselves a handy $26.9m dividend for the 2019 financial year back in December, in more innocent times. But even that was less than the $31m dividend paid a year earlier and the $49m received in late 2017.