Australian Broadcasting Corporation (ABC) AM News Radio
Ann-Maree Moodie discusses Corporate Governance on ABC's AM News Radio.
Discussion on Australian Board Members.
Friday, September 21st, 2001 8:24am
LINDA MOTTRAM: Well, as you've heard, the Chairman of the ANZ Bank, Charles Goode, has stepped down from the boards of Ansett and Air New Zealand. His opposite number, Mark Rayner has stepped down as the Chairman of the National Australia Bank, after putting his company, Pasminco, into voluntary administration. And still on the board of Ansett, although having stepped aside, is Gary Toomey, the Chief Executive of Ansett and Air New Zealand.
Why is it that the same names keep turning up at the top of corporate Australia on both sides of the ledger? That's a question Peter Martin put to Anne-Marie Moodie, the author of a study of Australian boards released this week.
ANN-MAREE MOODIE: The typical board director is aged 50 to 60, he's a white Anglo Saxon male, and he probably has a background in banking and accounting.
PETER MARTIN: Where are board members chosen from?
ANN-MAREE MOODIE: Nineteen per cent of selection is made by executive search, but that leaves an awful lot being done by the board itself. And, in many instances, a chair will talk to another chair about who might be good in a particular area. And although boards do talk about wanting to have diversity and have skills around the board table that match the strategic direction of the organisation, they're still tempted by a name if such a person becomes available. And that's often because the shareholders would like to see someone very well known on the board.
PETER MARTIN: Is the best qualification for being on an Australian board having been on an Australian board or having been a chief executive?
ANN-MAREE MOODIE: If you choose your first board very well, and perform well on that board, then the people you're working with will start talking about you, will observe you at work. And when they're talking to another chairman or another director and the conversation turns to who do you know, who's good, then your name will come up.
PETER MARTIN: So, in the case of Gary Toomey at Qantas, he was regarded as having worked in an executive capacity there very well. And was probably seen as a natural person to be on the board, a bit later, of the ANZ Bank. It was the success in his first job which was more important than what's turned out not nearly as well in his Ansett job?
ANN-MAREE MOODIE: Well, I can't speak about Mr Toomey personally. But I can certainly say that the way boards have operated in the past, and certainly now, that it wouldn't surprise me at all that his performance in a previous job was something that saw him being recommended to another board.
PETER MARTIN: Do you have any ideas about how a way can be found into the club for people who don't fit the profile of the typical director? People who are women, people who are younger, people who don't have conflicts of interest?
ANN-MAREE MOODIE: Well, my advice for women is to have that operational chief executive experience, because they are very unlikely to get on a board otherwise. One of the quotes from the book is that a director said to a female director, 'Guess what, we've just appointed a woman to the board. It's a risky thing to do. I hope it's going to be okay.'
LINDA MOTTRAM: ANN-MAREE MOODIE, the author of the '21st Century Board' released this week. Peter Martin reporting.
