Virtually impossible to get sacked, no real accountability, an annual pay cheque of around $500,000, not to mention those boardroom lunches — not too many better jobs these days than being a public company director. Michael West put it beautifully recently in The Age when he asked: “Is it old-fashioned to believe that directors should be accountable for their actions as they are the stewards of their shareholders’ wealth?”
West was referring to the fate of GPT chairman Peter Joseph and CEO Nic Lyons. Joseph and Lyons led GPT into an ill-fated joint venture with Babcock & Brown which, along with skyrocketing (and mysterious) corporate expenses, caused GPT to announce a shock earnings downgrade this week. However, Joseph and Lyons certainly aren’t alone. Here is Crikey’s list of the Corporate Walking Dead:
Executive Directors
Phil Green
- Company: Babcock & Brown
- The case against: While BNB is trading above its float price, Green’s credibility must be in question. BNB scrip has dropped by around 75% in the last year and, in this tough credit environment, its model is about as relevant as Beta video tapes in the DVD age.
Eddie Groves
- Company: ABC Learning
- The case against: Led ABC on debt-fuelled and ill-fated US and UK acquisitions while the profitability of its Australian businesses collapsed. Share price dropped from $8.80 to 83 cents. Margin-called out of a $300 million equity stake but received a grossly generous options package last month.
Phil Sullivan
- Company: City Pacific
- The case against: CEO and executive director of City Pacific, in the last year, CIY shares have dropped 93% as the company struggles with a high debt load and struggles to sell its new development.
Jim Babcock
- Company: Babcock & Brown
- The case against: See “Phil Green”
Non-Executive Directors
“Teflon” Rod Eddington
- Company: Allco, Rio Tinto, JP Morgan
- The case against: Signed off on the disgraceful purchase of Rubicon by Allco, which tipped millions of dollars into the pocket of executives like David Coe and Nick Bain (and has nearly destroyed the company). Teflon was also CEO of Ansett when it drastically reduced maintenance expenditure. Two years later, it went bankrupt — poorly maintained planes sited as a partial cause.
“Aussie” Bob Mansfield
- Company: Allco, Staging Connections
- The case against: Like Eddington, Mansfield signed off on the disastrous Rubicon deal. Aussie Bob is also a director of Staging Connections which is down a lazy 86% in this year.
Elizabeth “the Black Widow” Nosworthy
- Company: Commander, Babcock & Brown, GPT, Ventracor
- The case against: Everything the Widow touches seems to fall apart (see this Crikey article for more details). In the last year, companies which Nosworthy is a director of have fallen by 73% — on average. Commander takes the cake though. Under the Black Widow’s chairmanship, share price has dropped by 97% in three years.
David Ryan
- Company: ABC Learning, Transurban
- The case against: Director while ABC embarked on US binge, signed off on Eddy Groves’ ridiculous grant of 6 million options exercisable at 92 cents. Also had an ill-fated stint as CEO of Adsteam Marine.
Paul Manka
- Company: MFS/Octaviar
- The case against: Manka was a director of MFS while it blew billions of dollars of shareholder funds on a raft of shocking investments. Octaviar has been suspended for six months and won’t trade again. Most of its managed funds are suspended. Manka owes around $5 million to Citigroup due to an “out-of-the-money” margin loan.
Graham Goldie
- Company: Centro
- The case against: Long-term Centro director who signed off on the company destroying acquisition of New Plan Excel Realty last year and had absolutely no control over disgraced former CEO, Andrew Scott.
Ian Donaldson
- Company: City Pacific
- The case against: Chairman of City Pacific since its inception in 1997. In the last year, CIY shares have dropped 93% as the company struggles with a high debt load and struggles to sell its new developments.
Lyndsey Cattermole
- Company: Foster’s
- The case against: The former Kaz executive has been on the Foster’s board since 1999 — signed off on the calamitous Beringer and Southcorp deals.
Graeme McGregor
- Company: Foster’s
- The case against: Chairman of the Foster’s audit committee, also signed off on both the Beringer and Southcorp deals.
Brian Healey
- Company: Incitec Pivot
- The case against: Chairman of Incitec is damaged goods courtesy of the Centro debacle. Healey was Chairman of Centro for the best part of a decade and allowed CEO Andrew Scott to destroy billions through an over-priced US acquisition.
Have we missed anyone? Send your suggestions to boss@crikey.com.au with “Dud Directors” in the subject line.
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