Wednesday, April 12, 2006


I haven't bothered commenting on the AWB royal commission before, mainly because it seemed too depressing. Once again, a government has done the wrong thing and brazened it out because the voters don't really care about the technicalities, and they have enough "I didn't know stuff" to hide behind.

The latest evidence from Mark Vaile and Alexander Downer, and tomorrow, John Howard makes the whole thing worse. Alexander Downer cheerfully acknowledged that he could not recall being told about the issues surrounding AWB, and that he had not been concerned. And he thinks this lets him off the hook! What annoys me most about this is that the federal government, rightly, expects more from anyone running an organisation of comparable size in this country.

When National Australia Bank was taken to the cleaners by four foreign exchange traders in the bowels of the organisation, did anyone seriously think it was a reasonable excuse for the Managing Director to say "sorry, I didn't know our controls were broken?". No, he resigned. Not content with requiring that level of responsibility from the person who is leading an organisation on a full time basis (fairly similar to a minister, I would say, in level of responsibility), they also require it from a Board, which is operating on a part-time basis in an oversight role (which would be equivalent to the full cabinet, in this context). And institutional investors also expect that level of accountability - the Board of NAB has almost completely turned over since that loss, in a fairly public and messy way.

Corporations Law does not allow directors to use ignorance as an excuse. They are responsible for asking the right questions, and creating an organisational culture that means they are likely to get the right answers, and be told spontaneously if there is something they should know. We should hold our government to no lesser a standard.


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