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Awkward moment for Andrew Thorburn as National Australia Bank makes list of most ethical companies

Awkward moment for Andrew Thorburn as National Australia Bank makes list of most ethical companies
When Saint Gail Kelly of Westpac left the building, she took her halo with her.

The bank might be untainted by any wealth management scandals - for now - but it was not enough to maintain its position on this year's Most Ethical Companies list the Ethisphere Institute.

Two Australian banks who maintained their positions from last year - and remain Australia's only representatives - are Teachers Mutual, and another model of purity by the name of National Australia Bank (NAB).

Ethisphere said its list "recognises companies that truly go beyond making statements about doing business 'ethically' and translate those words into action. Honorees not only promote ethical business standards and practices internally, they exceed legal compliance minimums and shape future industry standards by introducing best practices today."

With Gail Kelly gone from Westpac its halo as fallen slightly. Photo: Nic Walker

A chuffed Teachers Mutual boss, Steve James said: "It is a significant achievement to be recognised on the international stage for our long term commitment to ethical business practices."

NAB's Andrew Thorburn was understandably a bit more guarded when he fronted a Women in Banking and Finance lunch on Monday.

"It is absolutely clear that while we've done many good things, most good things, nearly all good things, there are some that haven't been dealt with in a way that we should be proud of," said a contrite Thorburn in relation to its MLC wealth fiasco, which threatens to rival the Commonwealth Bank's woes.

"Because people are people, there will be mistakes and there will be greed and there will be deceit. Those are things that we have to say are absolutely unacceptable," he assured the crowd in a statement that is sure to win brownie points with Ethisphere when it determines next year's list.

NAB's Andrew Thorburn was somewhat guarded about the news the bank had made the Ethisphere Institute list of ethical companies. Photo: Arsineh Houspian

BHP Bill-a-tonne

As expected, the demerger of BHP and the assets it acquired from Billiton, has created the biggest pay day for the money men since - well, since these same wise heads championed the merger of BHP and Billiton all those years ago.

Imagine what BHP would be worth today if its then boss, Paul Anderson, hadn't handed the company - and the keys to the executive suite - to the ever humble Billiton boss, Brian Gilbertson.

BHP said it will cost $US738 million to go back to the future it could have had, gratis.

About $US274 million ($358 million) of this demerger bill will have already been spent by the time investors vote on the transaction in May - so  they better bloody well approve it!

And if they vote it down, the company will still incur another $US30 million in costs.

Illustration: John Shakespeare.

More than half the total estimated cost relates to stamp duty and taxes incurred as a result of the split, but never fear, the hired help does not appear to be getting short changed.

The demerger documents state that 'execution costs' will reach $US145 million, including $US30 million in financial adviser costs, and lesser amounts on legal, tax, and other adviser costs.

KPMG has done particularly well out of the encounter, trousering $US1.9 million from doing the report, and a further $US7.3 million "for other services provided relating to the transaction."

But KPMG, which doubles as BHP's auditor and most-favoured service provider, revealed it has received $US57.1 million in professional fees from BHP over the past two financial years, which certainly puts the crumbs earned by the poor investment banks in perspective.

Other beneficiaries will include new South32 chairman, David Crawford, who started earning his $550,000 pay packet last month to spruik the demerger.

South32 CEO, Graham Kerr, will trouser up to $6 million if he hits all of the executive performance targets.

This is slightly more than Kerr earned digging septic tanks while at high school in Fremantle at $30 a pop. Needless to say he is, along with Wesfarmers boss, Richard Goyder, a Freo Dockers fan.

Picking top dollar

All that coin-flipping as captain of the NSW State of Origin team obviously paid off for rugby league legend-turned businessman, Benny Elias.

Elias, the would-be developer of his former Balmain Leagues Club's home site, and head of Indonesian miner Kupang Resources, correctly guessed - sorry - forecast the end-of-year value for the Aussie dollar at last year's Bull & Bear Annual Lunch organised by Bell Potter.

Alas, Elias lost out to Steve Maltby from 3 Bridge Capital who lead all-comers in the winner-takes-all competition. Maltby also gets his name engraved on the Bull & Bear trophy.

Our top pundits gathered at the Bull & Bear again last Thursday for the latest comp, picking the hot stocks for the year head, forecasting key market prices such as the ASX200 close for 2015, as well as the naming their premiership favourites across the AFL, NRL and Super Rugby codes.

Hired help

Things must be going really well at Pinebridge Investments.

The fund manager acquired from AIG in 2010 by former Telstra buddy, Richard Li, announced that Goldman Sachs former Aussie boss, Stephen Fitzgerald, will parachute in as temporary CEO due to the abrupt departure of the current boss, David Jiang.

"My role at PineBridge is complete," said Jiang in a statement announcing his very quick departure.

It will leave a fair bit on Fitzgerald's plate.

He is currently deputy chairman at Pinebridge, a director of QBE, a Future Fund guardian, as well as  a member of the NSW Government Social Investment Expert Advisory Group.

Author: Colin Kruger
Source: Sydney Morning Herald
Last modified onWednesday, 18 March 2015 01:34

1 comment

  • Argets Tuft
    Argets Tuft Saturday, 18 April 2015 00:31 Comment Link

    Why do we need financial advice? Many people don't have any interest in, or find the need to follow, the stock markets, interest rates ( except on their home mortgage repayments ), bonds, margin lending, etc. So if we have an amount of money - e.g .$50,000 + - that we want to invest for our future security, we really don't know very much at all about the best legal tax effective options available to us to help preserve our money until such time as when we need to use it.
    We go and see a Financial Planner with our bank, rightfully anticipating that the trust we have in the financial advice our bank's financial planner gives us is completely to our long term benefit. The financial planner carries out a complete Client Profile by asking us a great variety of questions to try to reasonably assess our tolerance to investing in the likes of stock markets, etc. How can we possible have a tolerance or intolerance for that matter about something we know very little or nothing about?? One of the many ( loaded ) questions will be " what would your reaction be if 6 months after placing your investments you discover, due to mainly market conditions, your portfolio had decreased by 20 % ? Keep in mind that for someone who has the need to seek the advice of a financial planner in the first place most likely doesn't have much of a clue about vagaries of the various investment catagories available. So how can they be expected to understand and answer this question in the Client Profile " your portfolio had decreased by 20%? ". Very worried obviously. What does this mean for my investment ? Aren't you, the financial planner, the one who is supposed to be the expert from whom I'm seeking the advice, and expect that your professional guidance will ensure that my money I'm seeking to invest with you is safe?
    The question I ask : how can a normal down to earth person be expected to be so overreliant on the loaded questions and dubious methodology used to accurately determine my Client Profile used by the financial planner ? I strongly suggest to all that a " Client Profile " AND a Statement of Advice booklets be requested from the financial planner you're contemplating seeking advice from, and take your time reading all the questions very carefully at home, and prepare answers BEFORE you see the financial planner again. You won't be put on the spot by the financial planner with the many " left field " questions which cannot be accurately answered by you based on the financial planner's explainations ......because you may not have any real and factual understanding of your tolerance to any forms of investments.


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