News and Views

  • Date:01 Oct 2007
  • Type:CompanyDirectorMagazine

Akehurst appointed to RBA board

Former Alinta chairman John Akehurst has been appointed a director of the Reserve Bank of Australia (RBA), becoming the first West Australian to sit on the nine-member board in
a decade.

Akehurst, who replaces Western Mining chief Hugh Morgan on the RBA board, has over 30 years experience in the oil and gas industry and was managing director of Woodside Petroleum from 1996 to 2003.

Other board members include RBA governor Glenn Stevens, his deputy Ric Battellino, Sydney company director Jillian Broadbent, former Woolworths chief Roger Corbett, BlueScope Steel chairman Graham Kraehe, Telstra chairman Donald McGauchie, Canberra-based economist Warwick McKibbin and Treasury secretary Ken Henry.

Akehurst is also deputy chairman of Perth-based oil and gas company Coogee Resources and a non-executive director of CSL, as well as a director of the University of Western Australia Graduate School of Management.

Labor’s stance on business regulation

As the Federal election draws nearer, both sides of politics are championing their pro-business policies and their commitments to ongoing reform to promote flexibility and foster growth.

The Boardroom Report recently posed a list of questions to the ALP’s shadow minister for corporate governance and responsibility, Senator Penny Wong, seeking more detail on the party’s election platform on issues affecting the sphere directors operate in.

Senator Wong revealed that the ALP would be targeting business regulation as a major area of reform. She added that a merger between the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulatory Authority (APRA) could be considered and noted that the party was prepared to be flexible about how companies undertake non-financial reporting on matters including corporate social responsibility (CSR).

Senator Wong also revealed that procedural issues would be addressed with an eye to giving more time for industry to lodge submissions to government. In addition, she was supportive of the ASX and ASIC continuing to jointly handle oversight of the stock market.

Wong said: “Business regulation will be a major area of reform under a Labor government as part of our productivity agenda.” Plans would include setting a national objective to harmonise key regulations imposed on businesses within five years of coming to office. As part of this, there would be a review of occupational health and safety laws, administration of payroll tax, building codes and trades, and professional body recognition.

The ALP would also implement a process to protect business from new, unnecessary regulation and assess legislation through a Regulation Impact Statement where it did have an effect.

On an ASIC/APRA merger, the stance is that: “Labor has previously indicated that it would consider” such an act. The Senator added that Australia had a co-regulatory system of corporate governance and the ASX and ASIC both had an important role in maintaining integrity of capital markets.

The important issue of how corporations report their non-financial affairs appears to remain one of flexibility and consultation, rather than taking a tick-a-box approach. “Labor’s approach will be to work with the business community to generate cultural change in the way CSR issues are dealt with by companies,” said Wong. “Cultural change will not be achieved simply by regulatory measures that stifle innovation. Businesses need to examine strategies for CSR as part of their core activities and as a way to create competitive advantage.”

The current law on disclosure was appropriate, she added.

However, Senator Wong said the ALP believed a strong economic case existed for business to engage in flexible sustainability reporting and properly managing their environmental, social and governance risks. The party would encourage businesses to improve their reporting and to make their operations more sustainable. The financial sector would be “engaged” to improve their analysis and evaluation of the social and environmental performance of corporations.

And on the question of giving more time for the framing of government submissions, Senator Wong said: “Labor will be considering a range of procedural issues if elected, including the timeframes and processes for House, Senate and joint committee inquiries.”

Bryan to head Caltex

CALTEX has appointed its longest-serving director, Elizabeth Bryan, to succeed Dick Warburton as head of its board.

Bryan, one of the most prominent corporate women in Australia, will take over the chair of the listed Australian oil refining and marketing offshoot of Chevron from 1 October.

Bryan was head of the NSW Government’s superannuation investment and management group which ultimately became Deutsche Asset Management’s headquarters for its Asian business.

Her government work included building a venture capital business for the Australian Industry Development Corporation and working as a consultant for W D Scott.

Caltex appointed her a director in 2002. She is also a director of Westpac, stockfeed manufacturer Ridley Corporation, and chair of UniSuper. For more on Bryan please
see p32.

Meanwhile, Warburton will stay on as a member of the board until Caltex’s annual general meeting, scheduled for April next year, to effect a smooth transition and to assist with finding and inducting a new director.

He is still chairman of Magellan Flagship Fund and Tandou and has been a director at Nufarm since 1993.

Prior to becoming a professional director, Warburton was the chairman and CEO of DuPont Australia and New Zealand, where he was responsible for the company’s petrochemical business operations in Australia and New Zealand.

Caltex has thanked Warburton, who had been on the Caltex board since 1999 and chairman since 2001, for his ‘valuable contribution and leadership’, in a period during which, it says, the company witnessed a substantial improvement in its performance.

Last month, Caltex posted an after-tax profit of $255 million on a replacement cost-of-sales operating profit basis, up 46 per cent from the $175 million for the previous corresponding period.

On a historical basis, net profit, including inventory gains, was $368 million in the first half compared with $277 million in the previous corresponding half.

The refiner says it will spend about $1 billion over the next three years to boost growth opportunities, mainly focusing on the diesel market.

Directors balance stakeholder interest

A new study has found that Australian directors prioritise shareholders only slightly above employees, distinguishing them from their US counterparts.

The study was conducted by University of Melbourne corporate and employment law experts and analyses the way that directors balance the competing and sometimes conflicting interests of stakeholder groups, such as employees, creditors and shareholders.

It reveals that a majority of directors (55 per cent) believe that acting in the best interests of the company means they are required to balance the interests of all stakeholders. Very few directors equate the best interests of the company with the short-term interests of shareholders (0.3 per cent).

Meredith Jones, the primary researcher on the survey, says the study provides new evidence that Australian directors have different priorities to those of their US counterparts.

“US studies, for example, show that around eight out of 10 directors rank shareholders ahead of all other stakeholders, including employees. The Melbourne University study shows that only four out of 10 Australian directors rank shareholders first. In contrast, in Japan studies have shown employees to be ranked highly over other stakeholder groups,” she says.

The study was led by Professor Ian Ramsay, from the Centre for Corporate Law and Securities Regulation, and Professor Richard Mitchell, from the Centre for Employment and Labour Relations Law.

Professor Ramsay notes: “The survey reveals that there may be less need to change the law of directors’ duties to require directors to take into account the interests of defined groups of stakeholders other than shareholders in light of evidence that most directors are already balancing the interests of a range of stakeholders. The survey shows that an overwhelming majority of directors (94.5 per cent) believe that the law concerning directors’ duties is broad enough to allow them to consider the interests of stakeholders other than shareholders.”

The survey also shows that ensuring customers are satisfied, growing the business and seeing that employees are fairly treated are the matters rated as important by the largest proportion of directors. Overall, less than half (45 per cent) of the directors surveyed believe that increasing the share price is important to them, although the proportion of directors of listed companies holding this view is considerably higher (60.4 per cent).

New AICD WA state manager

Suzanne Ardagh has joined AICD as the state manager for Western Australia.

Based in Perth, Ardagh succeeds Anthony Smith and is responsible for AICD’s Western Australian program of director events and development courses. She will also be involved in enhancing member services for the unique requirements of directors in the state.

Ardagh has 20 years of broad experience gained in the fields of diplomacy, corporate affairs, education, marketing and communications.

She was previously marketing and communications director for RMIT International University in Vietnam where she achieved significant growth in student recruitment and brand development. Prior to this, she was responsible for managing the office of the former Wesfarmers CEO, Michael Chaney, a role which included involvement in key stakeholder communications and investor relations.

Earlier in her career, Ardagh held foreign embassy postings in Vienna and Mexico City, where she was a liaison officer for the Foreign Minister, Prime Minister and visiting Australian delegations.

“AICD’s member numbers in Western Australia have grown by almost 10 per cent per year for five years and Ardagh has the perfect mix of experience to take the organisation to the next level,” notes the president of AICD’s Western Australia State Council, Fiona Harris.

The toll sounds for Horsburgh

Ray Horsburgh, the former managing director and CEO of the Smorgon Steel Group, has been appointed chairman of Toll Holdings.

He replaces John Moule who resigned because he and his family declined to sell their investments in Asciano Group in order to comply with an Australian Competition and Consumer Commission undertaking imposed on Toll Directors.

Horsburgh, who has been a Toll director since August 2004, is also chairman of the Essendon Football Club, a member of the Business Council of Australia and a director of listed companies Traffic Technologies, National Can Industries and CSR.

He previously held senior positions with the ACI group, including that of CEO of ACI Glass Packaging. In the past, he has held directorships with Nylex Malaysia, ACI Shanghai Glass and Guangdong Glass in China and PT Kangar, Indonesia.

John Anderson joins Eastern Star Gas

Former deputy Prime Minister John Anderson, will take up the non-executive chairman’s role at junior gas explorer, Eastern Star Gas (ESG), when he quits Federal politics after the upcoming election.

According to an ESG release, Anderson was attracted to the role because of his strong interest in regional development. In addition, ESG’s main assets are in the electorate that Anderson has represented for nearly 19 years.

He assumes his new role just as ESG transforms from a natural gas explorer to a major gas developer with independent certification of natural gas reserves likely to be achieved by the time of publication.

Anderson has served as deputy prime minister for six years and a senior cabinet minister for nine and a half years.