Features Australia

Business/Robbery etc

27 January 2018

9:00 AM

27 January 2018

9:00 AM

Now that Sam Dastyari is at last about to give up his $200,000 a year Senate salary for Kristina Keneally’s benefit and with no chance of any federal or NSW jobs for the boys from his Coalition opponents, what niche in the corporate world will fit dim-sim Sam? Apart from a union movement sinecure as a trustee of an industry superannuation fund, there is always the benevolent Mr Huang, with his multi-million dollar political donations, whose Wuhu CEO (Dastyari’s fellow former ALP general secretary and former NSW minister Eric Roosendaal) has just conveniently resigned, leaving an alluring vacancy. It’s not likely Sam would be left to Huang out to dry after all the good work he has done ensuring that China’s propaganda is promoted throughout the land. But don’t expect Sam to be welcome in corporate boardrooms; the days of former senior MPs picking up well-remunerated directorships on listed companies seem to be over – with exceptions like Whitehaven Coal’s very successful chairman and former Nationals Deputy PM Mark Vaile.

And just as well, according to the doyen of finance commentators, Trevor Sykes, through his Pierpont nom-de-plume. Asserting that the record of former senior Liberal politicians as company directors has been appalling, he laments that ‘when they go onto boards their brain cells seem to turn to porridge, making them incapable of recognising impending disaster. Let’s call it the Oatmeal Curse’. He cited four cases in the past decade when senior Liberals have been associated with corporate scandal or collapse: John Hewson’s Elderslie Finance which collapsed spectacularly owing $400 million, Andrew Peacock’s MFS which went broke owing $2.5 billion, Arthur Sinodinos’ Australian Water Holdings with its link (unknown to Arthur) with white-collar criminal Eddie Obeid and Dr Michael Wooldridge’s Australian Property Custodian Holdings which lost $550 million on aged health care. ‘As two (or maybe three) of these Liberals were possible prime ministerial material’, according to Pierpont, ‘this proves that it must be easier to run Australia than a public company – so chairmen should be paid more than the PM’. But Pierpont’s oatmeal curse has also hit Labor. Last week’s gaoling for fraud of the former CEO of the failed Australian Bight Abalone venture that took $44 million from investors is the latest warning to former MPs that the glister of a board seat is not necessarily gold; former Labor minister Nick Bolkus was an ABA director. And a couple of years ago former Treasurer John Dawkins got bumped off the board of Sovereign Gold in what were deemed ‘unacceptable circumstances’.

The reason there are so few former politicians on boards of ASX listed companies (but many on statutory, NGO, advisory, charitable, arts, lobbying, superannuation and sporting boards) is that they are frankly not welcome. A UNSW academic study a couple of years ago in the Australian Journal of Management found no evidence that political connections are valuable in Australia, unlike in the US. ‘Shareholders react negatively to the appointment of former politicians, especially if their parties are not in power. So there are very few former politicians in commercial directorships relative to the number leaving office’. According to a leading head-hunter, ‘It’s hard to find many successful politicians who have become outstanding company directors. I’ve seen a steady stream of politicians over the past 15 years enquire about board roles, but I am yet to see a board specify that it is looking for an ex-politician for a directorship’. Another said some very talented former politicians were naturals for the boards of leading Australian companies, ‘but they can’t stop being combative so the “big end of town” won’t touch them as directors’.  As Company Director magazine editorialised, ‘More politicians on boards… might also help rebuild the relationship between business and federal politics in Australia and limit the trend to career politicians’. Instead, politicians, most of whom leave politics (voluntarily or otherwise) long before retirement age, congregate in consulting, advising and lobbying – and, particularly from the left, in academe. Like accountants and lawyers in the old business truism: former pollies should always be on tap but never on top.

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