Nowhere to hide for NAB boss after drinking accusations

For National Australia Bank boss Andrew Irvine, there was nowhere to hide – but odds are the headline-making executive in the middle of a behavioral firestorm would have wanted to lie low.

The Australian Banking Association conference held on Wednesday had long been on the agenda, and as its chair, there was no way for Irvine to have someone else deputise.

It’s lonely at the top: NAB chief executive Andrew Irvine.Credit: Eamon Gallagher

After last week’s bombshell allegations that shareholders had raised concerns about his “drinking” and management style, banking circles have been awash with personal views and informal “wine” audits by shareholders and analysts.

Sure the media coverage hasn’t risen to the level of Astronomer chief Andy Byron’s now viral affair being caught by a Coldplay kiss-cam, but in Australia’s business goldfish bowl, Irvine is now a reluctant media magnet.

So it’s hardly surprising that the past week has been hard-going for Irvine, and he undoubtedly would rather have been anywhere else than on the public podium, swarmed by the media.

He admitted as much when he confessed to finding all this negative attention “difficult” for him and his family.

The board is clearly hoping that the storm will blow itself out as long as another shoe doesn’t drop.

That said, the tense but defiant chief executive asserted that he wanted to plough on and do his best to improve the bank.

The response from NAB’s board in the wake of last week’s revelations was to hold a hastily convened meeting to discuss next steps, including a decision to support Irvine and a move to scale up executive mentoring. Irvine said he was invited but didn’t attend the meeting, which was held in the middle of the night, his time, given he was holidaying overseas.

But there have been no denials from the board or from Irvine – indeed the directors have largely gone to ground and there’s been not a peep from chairman Phil Chronican.

The board is clearly hoping that the storm will blow itself out as long as another shoe doesn’t drop. And there have been no particulars about the aspects of his management style that raised shareholder concerns.

Meanwhile, for the banking community, it provided an opportunity to pick a side.

Unsurprisingly, those who support Irvine reckoned the media pile-on was wildly overdone.

Brian Johnson, a veteran banking analyst from MST Marquee, was the first to publicly express his view in a note to shareholders.

“Having followed Australian banks for many years, I could recall outrageous anecdotes on the management/board of every bank. By comparison NAB’s purported current management crisis is not particularly noteworthy.”

There’s been not a peep from NAB chairman Phil Chronican.Credit: Paul Jeffers

Having been in banking circles for decades, he has a historical perspective.

(That noted, it is also fair to say that behavioral standards have changed over the years, and the size of the sobriety police force has grown significantly.)

His larger observation is that shareholders should play the performance rather than the man – and Irvine hasn’t been in the job for long enough to judge his performance. Johnson believes Irvine has already identified NAB’s two major challenges: its overreliance on mortgage brokers and a lagging deposit franchise.

There are others lining up behind Johnson, but not all. Others feel that Irvine’s drinking and management style are a larger concern that the board will need to address.

Where shareholders land on this issue, and how widespread concerns about Irvine might be, will become more evident at the bank’s annual meeting in December. That’s when his salary package – currently $2.5 million plus short-term and long-term incentives, depending on performance – will be voted on.

Unfortunately for Irvine, staying below the parapet won’t be easy. The bank’s third-quarter result will be released next month.

As head of a $115 billion bank, there will always be scrutiny of Irvine and his peers. This comes with the territory.

From a shareholder perspective, what one may consider excessive, another may characterise as within the bounds of “liking a drink”.

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