In the weekend AFR, James Thomson wrote about Commonwealth Bank board woes a ‘turning point’ for all directors.
In this article, Thomson wrote:
Investors told of meeting directors who had struggled to explain how their company actually made money, or what issues it was facing. They described how the appointment of former politicians to a board had become an early warning sign of trouble. Some even explained how they mapped the concentric circles that linked poor directors of one board to others.
Once upon a time, in a galaxy far far away, when Spartacus was younger and with much less grey hair and studying for his economics degree, the language of business was military and the go to book was Sun Tzu’s The Art of War. Nowadays however, the language of business is political and the go to book is Niccolò Machiavelli’s The Prince.
The strategy of business has “evolved” from defeating the enemy (competition) to capturing government to protect you from the enemy and the threat of potential enemies. My how times have changed.
Expressions, within large and serious businesses, along the lines of shaping the environment abound as a polite way of saying we in da lobbying and government/regulator capture industry. And the migration of members of the political and bureaucratic class has only gone one way – out of government and into business to further perpetuate this evolution.
Yes. This can only end well.
Much has been written about the lack of financial services experience on the board of AMP. Citizens and shareholders should rest comfortably in the knowledge that the Chairman of one of Australia’s largest banks is a former career public servant. But at least he has changed the the rules for the board:
A practical example on the NAB board is its “two plus five” rule, where reports presented to the board can be no longer than two pages, plus five pages of attachments.
It’s the big things that count.
Oh yes. This can only end well.
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