Shareholder pressure forced the resignations of NAB Bosses

Ross Greenwood speaks to Institutional Shareholder Service Head of Research Vas Kolesnikoff who says shareholder pressure would have played a strong part in the resignation of NAB CEO Andrew Thorburn and its chairman Ken Henry

Ross Greenwood: I want to go to another person who we spoke to earlier this week in regards to this. As I always told you, the pressure from the shareholders would mount on the National Australia Bank after those criticisms. Vas Kolesnikoff is with the Institutional Shareholder Services business that gives advice to major shareholders about how they should vote, and that’s where the pressure comes from. Vas, many thanks for your time again. That’s where the pressure was coming. It was political on one side, Bill Shorten, and also Scott Morrison putting pressure on the board to consider their positions, and clearly shareholders saying, “This is not necessarily the company that we want to be a part of.”

Interview with: Vas Kolesnikoff, Head of Research,
Institutional Shareholder Service

Vas Kolesnikoff: Hi, Russell. No doubt. The facts suggest that things haven’t been perfect at NAB. I think the commissioner was quite scathing in his comments, so the pressure was definitely on the board. Let’s face it, the rest of the directors have to look at themselves, and their remaining executive team to look at themselves as well because the facts are out there.

Ross Greenwood: The facts are out there now. Just in regards to- it was 88% of shareholders at the last annual meeting who voted against the remuneration report. They got even close to a similar type of a vote this year, there would then be a motion to spill the entire board. This is certainly not the stability that the shareholders would be seeking, and that’s hence the reason why the chair and the chief executive at least have got to go to try and create a new stable platform for this bank.

Vas Kolesnikoff: I think that’s right. You will have seen that in Commonwealth Bank. Commonwealth Bank got quite a large shareholder rejection in 2016. Subsequently, the former CEO, Ian Narev, departed half the board, if not most of the board departed there with a new chairman, Catherine Livingstone. I think that’s the fact of life. I think the boards need to look at themselves. I think if this happens again, it’ll be certainly putting a lot of pressure on the remaining directors. I think this is potentially a move to stave off that top of shareholder revolt.

Ross Greenwood: I’d say what’s interesting, a shareholder revolt, Vas Kolesnikoff, is with the institutional shareholding services, we spoke to him early this week. Vas, I appreciate your time here on the program this evening.

Vas Kolesnikoff: Thank you, Ross.

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