In her column (19/3), Michelle Grattan quotes Helen Ridout as stating, “Australian companies and the regulatory framework they operate under are not responsible for the current crisis.”
Quite an extraordinary self-serving statement indeed by Ridout. Even though Australian management certainly can’t be ‘blamed’ for the global crises, it can certainly take the blame for the blatant mismanagement of Australian shareholder funds. In that sense, they are absolutely to blame.
Having consulted to literally hundreds of corporations over nearly 30 years I can state categorically that:
1. Australian management standards are uniformly poor and naive;
2. CEOs (with the knowledge and acquiescence of their Boards) hijack the corporations they lead inevitably and entirely at shareholder cost and risk;
3. NO listed corporation asks all its shareholders what outcomes they desire; instead substituting management’s own subjective (and incorrect) assessment and taking the corporation on high risk strategies and directions;
4. Corporations and executive management teams are assessed by measures they themselves define.
....and the regulatory regime allows this to happen and to continue to place shareholder assets at risk.