Bank boards under question
(15 September 2008 – Australia) The Australian Shareholders Association (ASA) has brought bank boards into scrutiny, identifying that a lack of industry experience will be a key upcoming issue.
ASA chairman, Ian Curry, said that professional people on company boards were often recycled and also lacked industry experience.
He added that experienced bankers aren't in great supply and went on to question the current system.
Curry said that you have to ask why someone who's been at general manager level or above at Westpac, for example, can't be a director of Commonwealth Bank in two years or so.
Research published by The Australian newspaper shows that only 16 of 80 bank directors, or 20 percent excluding chief executives, have direct industry experience.
Further, Curry said that the ASA will be looking at these issues as well as board accountability at upcoming annual general meetings for the big banks. He also expects institutional investors to do the same.
Constellation Capital portfolio manager Peter Vann said that the lack of industry experience on bank boards was unacceptable.
Of particular concern is the lack of knowledge of the risks associated with sub-prime write downs and related positions, he concluded.
He added that experienced bankers aren't in great supply and went on to question the current system.
Curry said that you have to ask why someone who's been at general manager level or above at Westpac, for example, can't be a director of Commonwealth Bank in two years or so.
Research published by The Australian newspaper shows that only 16 of 80 bank directors, or 20 percent excluding chief executives, have direct industry experience.
Further, Curry said that the ASA will be looking at these issues as well as board accountability at upcoming annual general meetings for the big banks. He also expects institutional investors to do the same.
Constellation Capital portfolio manager Peter Vann said that the lack of industry experience on bank boards was unacceptable.
Of particular concern is the lack of knowledge of the risks associated with sub-prime write downs and related positions, he concluded.
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