Ross Greenwood speaks to Former Westpac CEO David Morgan about
his time as the head of one of Australia’s major banks, and what it took
to restore the reputation of Westpac during his nine years as CEO.
Ross Greenwood: Great to have your company here on, Morning News going right around Australia. I’ve got to tell you when you sit back and reflect on your life you’d like to have what I’d call a full life. A life that might be full of well, sporting achievements, maybe some artistic achievement. You’d certainly like to have some corporate and financial achievement in your life.
To have a well-rounded life with different influences coming at you from different areas. It may be that you have some interaction with politicians or maybe with bureaucrats helping to create law in Australia. There’s not too many people who get that fully rounded life but there is one person I know who has certainly had this experience.
Indeed in Australia has really climbed the top of Australia’s corporate ladder and a very successful, right. Came out with a reputation very much intact. Who also has been at the very top of Australia’s bureaucracy, designing tax laws in the past, dealing with some of our most celebrated politicians, but then also finding a career overseas after this has all been said and done.
That particular man is David Morgan, now to try and build a bit of a story about David Morgan, you might sort of, “Where’s that name come from.” David Morgan was the chief executive of Westpac, there was a situation where before then it moved into banking. He was with Australia’s Treasury and he became Australia’s deputy secretary of the Australian Treasury. In other words, he could have well gone on and become the treasury secretary.
On top of this also think about 1972, selected for Richman in the VFL in a year when they made the grand final to go and play against Collingwood in the first round, so he had sporting achievement in his background. Or say for example, to have been chosen, to have acted alongside Olivia Newton-John in a movie.
Now it would be fair to say there’s a story behind that. Well, we’ll get to that very shortly. But to be done, this is a full life. Isn’t it? Well, I can tell you, in fact, a book is about to come out about David Morgan, it’s called, “A Wonderful Life Football Acting World Finance Government Banking.” It’s by Oliver Brown. It’s going to be out on March the 1st through Hardie Grant. But I thought it’d be good to get him on the program this evening.
David Morgan, good to have you on the program. Good to have a chat.
Interview with: David Morgan, Former CEO, Westpac
David Morgan: Ross, lovely to catch up with you again. You and I go back a long time, late 30 years.
Ross Greenwood: [laughs] We do. It goes back a long long time. It really does.
David Morgan: Thank you for that very generous introduction. Very well research as ever. Thank you for that and lovely to be with you.
Ross Greenwood: No problems at all. Okay, let’s go back and start. Just explain growing up, where did that all happen and how was it you ended up being selected for Richman in that first game.
David Morgan: I was brought up in Melbourne and as you know Australian Rules Football is a religion in Melbourne that I actually didn’t play much football as a kid. My dad went bankrupt when I was 10. No clear at all. I was actually from the ages of about 12 to 19. Every weekend I worked basically acting for most of that time and trying a hand at film directing as well.
I really played a bit of football at Melbourne High School, probably played my last game there about third day and then rejoined in Latrobe University on my 20th birthday. Played three years with Latrobe, a year with Melbourne University Black, a year with the Australian National University and then turned professional to play in East Lake up in the Canberra league and that’s a great role Australian universities, all Australian amateurs, and Richmond invited me down to the practice game.
I did rather well the last practice game, played against Port Adelaide, played like last practice game against Carlton kick Trey and got selected for the opening game of 72.
Ross Greenwood: Then what happened after that?
David Morgan: I’d already turned professional in Canberra roar with a slight Gallop just like guys all club and they wouldn’t play me to Richmond. I had my name on the back page of that paper that they wouldn’t play me, so I played the year out in Canberra and broke the goalkeeping record for the competition. Then I had a scholarship at the London School of Economics, so I had to make a choice to come back and then sure late football career would do my masters and PhD in London and I chose London.
Ross Greenwood: What an astonishing story that is. Tell me one thing, go back even further. Your father’s bankruptcy and those periods between the age of 10 through to 19 and through the time you eventually got the scholarship to the London School of Economics, do you believe it shaped your attitudes towards finance, towards money through your career?
David Morgan: There’s no doubt about that, Ross. A not particularly easy childhood absolutely drug my ambition was a massive influence. My father’s collapse of his business and marriage when I was 10 years of age and mother walked out on him and out on me which was pretty usual in 1957. I was very determined to be successful professionally.
I was also very determined to choose my life partner with a lot of care. But if you wait for a lot of years and I came home to see the bank mortgagee style on that on the family home. Ross, when I had no idea that that boom was impending. When I was in charge of monetary policy at Treasury racking up interest rates, the double-digit figures, I really did also think about what I was doing to some Australian families and similarly running Westpac. When you foreclose, I knew what heartbreak that was, and that’s when you a perfect professional and your personal obligations and your personal feelings really tear at each other.
Ross Greenwood: Take me to that because this has clearly been a feature of the recent royal commission and the submissions we’ve heard from many of the victims about banks being overly zealous in foreclosing. It is a feature of banking where a person who makes a loan can’t pay or a business that goes bad. It has got to be always part and parcel of the lending, it can’t be that the money is given out but there is no guarantee or obligation to pay it back. But how did you try and balance it up during your banking career especially at Westpac as chief executive?
David Morgan: That’s a great question and there’s no easy answer to that, Ross. What I tried to do, we tried after we got the message well and truly in 2001 where banks were as hated then as they are today that we had to do a much better job particularly about looking after our more vulnerable customers that would have some very adverse consequences and trying to make sure they didn’t get into that situation in the first place, but then trying to exercise maximum forbearance.
Even though that might cost you a bit on the bottom line in the short run. Ross, in terms of corporate reputation it really paid for itself. Now I’m not saying we’re perfect in that regard that we got the message that corporate reputation really matters and that we are embedded into our political and socio-economic system and their health is vital to our sustainability. We were battered after we saw the light as no one bank in the world for sustainability for five years from 2002 to 2007.
Ross Greenwood: Because in that period when you came in into Westpac following Bob Joss, of course, Bob Joss had come into a bank that really had very much nearly fallen over during the last recession that Australia had gone. There was a rights issue that went belly up. It could have really pushed the bank over, by the time you got there was a lot of mending that had been done but you had to then restore the reputation of the bank and in the corporate world in Australia but also in the personal world.
That was done if I can observe this by a very long period of consistency which was nine years of US chief executive but almost a consistent view of the world by Westpac at that time.
David Morgan: I think that’s very fair. Again, Ross, you’ve done your homework. You’ve lived that history with it. I was actually I think, Ross, a pretty important part of the mending process as well. I came into the bank in 1990 and you’re right, we nearly hit the wall in ’92. Bob Joss was appointed early in ’93 and he put me in charge of two-thirds of the bank then.
Bob and I who actually remained really close friends to this day by the way. When I began the redwood forest together that there was the big repair job done between that ’93 to ’99. But then we got to the end of that and I became CEO in ’99. While we financially recovered, Ross, we still had to regain the trust of our customers or the community.
Having got some financial stability and got our shareholders back onside, it was time to get our staff and our customers and the community back onside and that’s what we worked at hard and consistently over that nine years that I was CEO that you rightly pointed out.
Ross Greenwood: Right. Before we go forward from there, I’m going to take you back again. Tell me about Olivia Newton John’s story. How was it that you ended up with Olivia Newton-John?
David Morgan: [laughs] Well, my mother felt very guilty about clearing out on us, Ross. She was running a manager a studio, and some kids didn’t turn up for a photographic commercial in the Australian Women’s Weekly. My mother, even though she wasn’t living with us, dragged me into this. I did a series of obvious basic commercials, TV commercials, et cetera, TV series. I ended up starring in my own TV series called The Magic Boomerang. We did 39 half hour episodes. I left school to act in that.
We did a feature film with Olivia Newton-John. How I did that, I actually had to beer buddy. While I was 15 and 16 and 17, I actually looked the kid, much younger and could do my scrolling by correspondent. Anyone to feature the film, I was supposed to cast star with Olivia, but she was a star and I was a fourth right actor, and didn’t the songs that we sing together, I end up coming in the background.
She she went on to bigger and better things that may have had the right access. I didn’t even drive film directing which I was portrayed at. I learned a lesson of life Ross, which is, it’s wrong to advise young people to do what they love, you should advise them do what they like, and they good at. I love acting and I love film directing, and then take, I love professional football, but I wasn’t good enough at any of them.
Ross Greenwood: I’ll tell that is a wonderful story. Tell me, finally, also, I noticed that this week 30 board in the Financial Review, was talking about one story and that was, in the book there is a revelation that Westpac and the Commonwealth Bank came very close to a merger in 1998. You would have been instrumental in those conversations. How close was it?
David Morgan: It got very close indeed Ross. Whether would have been finally approved by the government. The competition authorities, was another question, but I think it was the last big chance for a big board merger and it came right down to the wire. At the end, there was a pretty stupid thing that it fell apart on. I was on the board of Westpac, and Commonwealth Bank said if we take over, me and the other guy don’t serve on the board.
I actually didn’t care about that, but often Ross, the social issues as you call them, the people issues get in the way of deals that otherwise should have happened, but this was a long way down the track night. This was positions have been decided, legal documents drawing up, boards and executive teams, quite a lot of meetings, came very close and it’s been a very closely held secret for 20 years.
Ross Greenwood: Well, I got to tell you, I will be part of an incredible book that’s coming out, and I’m not going to– There’s a few other stories, there is CIA stories in there, there’s all sorts of things. I wait till now, I’ll let people go and find the book and sell them for themselves. Since 2009, when David Morgan lift Westpac as chief executive, he became chairman for JC flowers in Europe and also the Asia Pacific.
He reminds me to this day, based in London. Back in Australia now, it’s great to catch up with him because we had plenty of interactions over a very long, long period of time and as a very keen Richman supporter, I was so pleased to see that story about the Tigers as well. David Morgan, I really appreciate your time on the program today.
David Morgan: Great to catch up with you again, Ross. I hope we can do it again. All the best to you.
Image source: 2GB