Ken Henry

I can almost forgive Dr Henry for his recent tantrums about the lack of progress on tax reform which he had neglected when Treasury Secretary for 10 years.

But his latest comments are absolutely outrageous. He blames investors for the poor behaviour of banks and investors also for driving up banker bonuses.

Here he is the chairman of NAB which has enjoyed far flung board/executive retreats on his $790,000 salary and responsible for the setting of executive remuneration for NAB and its culture.

Investors have no control over remuneration or culture and limited control over the Board – after all under the three strikes rule it is just about impossible for a diverse range of small holdings to sack a board.

The largest shareholder in NAB is HSBC custody nominees. That is a proxy for other investors and while listed with 23.9 per cent of the shares, HSBC does not have 23.9 per cent of the vote. But in any case, is Ken Henry complaining that banks own banks? So even if his arguement was correct, it is the banks themselves with the control.

And if the Board of NAB does not in fact control the decisions of the bank’s strategy, risk appetite, policy, governance and remuneration, why don’t they resign?

Because his argument is crap. The Board is responsible for all of that and he is the chairman. Stop blaming others Ken for your own errors.

If there is a complex remuneration policy with over 30 pages in its annual report it is because the Board agreed to it. The Corporations Act makes quite clear that the Board has responsibility for the actions of the bank. If Henry wants to abdicate that responsibility he should resign or ASIC should act against him for neglecting his directors duties.

The biggest problem in the banking sector is certainly not investors. It is the principal-agent problem where the Board and Executives are extracting rent from the owners. The terrible behaviour observed at the Royal Commission is due to poor behaviour by Boards and Executives, not investors.

Ken Henry it’s time you accepted responsibility rather than shirking it. If the remuneration practices at NAB need to change, that is something you can act upon. Otherwise step aside and let someone else take over who is willing to act.

 

 

About Lucius Quinctius Cincinnatus

I'm a retired general who occasionally gets called back to save the republic before returning to my plough.
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30 Responses to Ken Henry

  1. H B Bear

    Has Lucius log-in been hacked? I agree with this.

  2. Tim Neilson

    He blames investors for the poor behaviour of banks and investors also for driving up banker bonuses.

    Well naturally. I often turn up at AGM’s and argue strenuously for more of the company’s money to be given to the Board and senior execs so there’s less for me to receive as dividends.
    Don’t all shareholders do that?

  3. JC

    Great comment, Luc. One of the most timely and thee best seen here for a while.

    The wombat whisperer is a class A sanctimonious, fee raking douchebag who refuses to take responsibility. As if the shareholders could act. As if.

  4. Tintarella di Luna

    Is that like blaming the sky because the moon is found therein?

  5. Allen

    If the Directors and Management earn their massive incomes, they should also pay the penalty of their failures
    What about the executive that cost Woolworth investors billions of dollars in the Masters fiasco
    The NAB executive who took the NAB into the US housing market, and cost investors about four billion dollars.
    The Wesfarmers executive who so far has cost investors one and a half billion dollars in the Bunnings foray into the UK.
    The BHP executive that joined up with Billiton and cost investors billions of dollars and BHP are now back where they started.
    And they reckon they are worth 100 times the income of the trolley collector who gets fired if he loses one trolley

  6. Jonesy

    Advice to Mr Henry….get out, go early….and dont let the door hit you on the way out!

  7. MichelLasouris

    I can remember another NAB C.E.O who having granted his son with a housing loan at very advantageous terms declared that young persons who baulked at conventional interest rates on home loans should not aspire to home ownership, saying that if his son could manage his repayments there was no case for anyone to criticise the NAB. Talk about being severed from reality!

  8. JohnA

    He moved from one bureaucracy to another, and at approximately the same level.

    However, his remuneration seems to have enjoyed a “healthy” rate of increase – well in excess of mine, and in a year he would receive (rather than earn) more than what some have in their entire superannuation holdings.

    Something tells me he is not quite in touch with the realities of life impinging upon the investors.

  9. Has Lucius log-in been hacked?

    I thought the same.

  10. Tel

    Isn’t this a fundamental problem with the entire corporate governance structure? Nothing to do with banks as such.

    We have created a title of ownership that is isolated from any decision making… which is exactly the opposite to the concept of free markets property rights and personal responsibility. Ken Henry knows this perfectly well, and that’s why he can carry on like a douche while feeling completely safe. There’s a neat little club and working hard won’t get you in the door, only knowing the right people. They will happily take your money but never, never give up their authority. It’s perfect cronyism.

  11. MichelLasouris

    And what’s wrong with “bigly”? It is merely a step up from “smally’ and a small step down from “hugely” Get over it….no more relevant than the whore Stormy.

  12. RobK

    I cant fault your logic Lucy.

  13. Squirrel

    It seemed inevitable that this defence, or something like it, would eventually be put forward when the revelations of less than admirable behaviour emerged from the Royal Commission – in a sense, it’s the latter day corporate equivalent (without the histronics) of “you can’t handle the truth” in ‘A Few Good Men’.

  14. manalive

    I’m a shareholder and term depositor in a bank not NAB, the remuneration of senior executives and board is the least of my concerns.

  15. Where’s the Sinc? Wasn’t he raging against this Royal Commission, saying that it was nothing but a witch hunt? Businesses should be left to their own devices and the public would sort them out. I think he said much the same about Facebook as well.

    Aren’t these commissions and Senate investigations revealing some ‘interesting’ facts?

  16. Dr Fred Lenin

    There has never been a man born who deserves wages of $760k per annum , he is after all just a worker, he can be sacked just like the tea lady can. Let’s get some perspective in life .employing this muppet was a mistake , after he helped rudd swan giliard to bankrupt the country you give the clown a job like that? says a lot about the elites dont it

  17. Perth Trader

    Ken Henry and the Aust Cricket Board are classic examples of why its a bad idea to send convicts to colonize a country or colony. 230 years after settlement the convict DNA for stealing from dead banking clients or cheating in sport is still strong. None of this would have happened if the Dutch, French or Portuguese had decided to settle here.

  18. miltonf

    So glad I dumped my NAB share in late 2015

  19. Perth Trader

    I’m buying shares in West Pac, if they can make money off dead people I’m in.

  20. 2dogs

    after all under the three strikes rule it is just about impossible for a diverse range of small holdings to sack a board.

    That is the real problem, made worse by our superannuation laws. Many of the beneficial shareholders can’t even vote their shares in the first place. So who gets to vote for them? Institutional trustees like NAB! It’s a vicious cycle of no accountability.

  21. min

    I reckon all these corrupt dealings have only happened since banks gave up the old model and everyone was given incentives. This has caused poor behaviour from the most junior to most senior employee. When this originally happened I had procession of bank employees from mamagers down for counselling , anxiety attacks, depression and bullying from seniors who were pressuring them so they could get their bonuses.

  22. Craig

    Ken Henry…..it’s all about him.

  23. yarpos

    Soooooo, are you saying that you’re not a Ken fan then?

  24. Tezza

    Not ken’s finest contribution, I agree. But not his worst, either. That dishonour would belong to his musing about corporate social responsibility – the NAB counterpart to the unlamented Treasury well-being framework.

  25. Anonandon

    I don’t like Ken Henry.

  26. Davo

    They can all say what they like and will, but they remain untouched and whatever happens, never has any impact on the top people…unless of course some start getting sent to jail; then things may change.

    If you are a high flier you get away with it all (‘i don’t recall’ is usually the favourite answer, which pleasing i have not heard yet), but if some homeless kid pinches a loaf of bread they will feel the consequences

  27. AlanR

    O. M. G. A post on this site that I completely agree with. And even bemused is correct. I need something stronger than my chai latte this morning.

  28. Paul Farmer

    Perth Trader………….cant let that one go untouched. Yer with english convict history we might not be perfect but I would rather our british heritage every day over the 3 countries you mention.

    If France was so good how come we ( the Brits and Americans) needed to twice dig them out of the crap in the 20th century ? In fact if you read any detailed history of WW2 , the French effort all round was pretty crap. Hitler destroyed France in about 6 weeks.

    Portugal colonized Brazil and Angola………..while we are not perfect as a nation I am yet to see a Favela style slum in Australia . As for Angola …..DYOR.

    As for the Dutch………….missing in action in WW2 and were basically NAZI sympathisers for most of their occupation. As for colonies , we have South Africa………..well that turned out well all round for both colonizers and the colonized and Indonesia, a country that after Dutch rule was thrown off they descended into decades of military dictatorship and nowadays have Islamic fundamentalists only one step away from running the place.

    I will happily stick with my british convict history thanks………

  29. Mique

    In other aspects of his life, Henry behaves like deep green. Provided Canberra people could catch sufficient of their abundant surplus kangaroos (presumably by putting salt on their tales, as you do), Henry undertook to relocate them to his hobby farm, as all good green public servants ought to have. The numerous downsides of such a ridiculous proposal obviously never occurred to him. I’ve had nothing but contempt for his powers of reasoning and perception ever since.

  30. W Hogg

    I can almost forgive Dr Henry

    I can’t.

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