Corporate Australia appears to be suffering from a terrible dose of amnesia. Or perhaps boardroom figures have simply given up being responsible stewards of shareholder monies and instead, simply look after their own.

Less than two years ago, Rio Tinto, the great Anglo-Australian mining house, was on its knees. This was almost entirely due to complete incompetence of its executives. Rio Tinto paid $US38 billion to acquire aluminum producer Alcan, at precisely the wrong time. Even worse, Rio used a large amount of debt to fund the purchase. Months later the global financial crisis crippled commodity prices and Rio’s share price had fallen from $157 to only $29 and many speculated that the company may not survive.

Its predicament forced Rio to accept a “low-ball” offer from China’s Chinalco, which only didn’t proceed after shrewd political manoeuvring from rival BHP and a shareholder revolt spurred by an improving share price. Both of these disastrous decisions were led by current Rio boss Tom Albanese. Remarkably, despite destroying literally tens of billions of dollars of shareholder wealth (Rio’s share price sits at about $79), the Rio board has not only allowed Albanese to remain in charge of the miner, but gave him a 31% pay rise. Albanese was paid almost $9 million last year.

Rio directors no doubt would point to Rio’s increased profits, which swelled from $US4.87 billion to $US14.3 billion as rationale for the largesse. Of course, that rise had virtually nothing to do with Albanese, or any of Rio’s other highly paid executives. Rather, it was courtesy of a rapidly increasing iron ore price (Rio is the world’s second largest producer of iron ore) and higher production. This is due to China’s credit-fuelled spending binge, and most certainly not the result of any managerial expertise exhibited by Albanese and Co.

But when it comes to corporate amnesia, it’s difficult to go past the recent speculation that former investment banker Trevor Rowe might replace the respected David Murray as head of Australia’s $71 billion Future Fund. Murray, the former CEO of Commonwealth Bank (and who presided over its meteoric growth), has been outspoken on matters of government policy such as the mining and carbon taxes.

This appears to be more important than Murray’s exceptional performance managing the fund through the GFC. Despite being handicapped by a massive stake in the poorly performed Telstra, the Future Fund has easily outperformed the ASX, and also, pretty much every highly paid fund manager in the country. (Murray was even blamed for not selling the fund’s stake in Telstra quickly enough, when such sales would have drawn even more strident criticism).

Even more remarkable is the suggestion that Murray would be replaced by Rowe. Rowe didn’t seek another term on the board of the Queensland Investment Commission in 2009 after being associated with several scandals. In 2009, a company founded (and chaired) by Rowe called Enhance Management was forced to terminate an employee who received a secret $1 million success fee for switching fund managers.

About the same time, Thiess Pty Ltd, John Holland Pty Ltd and Macquarie Group — the project sponsors for BrisConnections (the disastrous toll-road company that had been chaired by Rowe) paid a $500,000 success fee to former Queensland Treasurer Terry Mackenroth. Mackenroth had been referred to the Queensland Crime and Misconduct Commission in relation to allegations arising from his lobbying activities (in relation to a different project).

But that wasn’t even the worst of it. It was the BrisConnections-Nick Bolton calamity that truly destroyed Rowe’s reputation. For while Rowe cannot be personally blamed for the financial collapse of the toll road (he was merely the hairman), he was rightfully pilloried for his roll in the Bolton fiasco.

For those who may have forgotten, Nick Bolton was a 27-year-old internet tycoon, who bought a large stake in BrisConnections in an attempt to force a corporate re-organisation. Rowe, as chairman of BrisConections was charged with handling the mess. It was a role that Rowe undertook exceedingly poorly. Not only did Rowe appear to mislead investors in comment made at the company’s extraordinary general meeting, but BrisbConnections also appeared to utterly fail in meeting its continuous disclosure obligations to the ASX — of which Rowe was actually a director.

It is truly staggering that someone of Rowe’s business history even remains on the Future Fund board, let alone is being considered as a replacement for David Murray.

The business world appears to have a very short memory indeed.

UPDATE Thurs 24 March:

Correction: In the story “How the corporate world looks after its own”  it was suggested that former investment banker Trevor Rowe was forced to resign from the board of the Queensland Investment Commission in 2009. Crikey has no evidence to support that assertion and Rowe maintains that he made the decision not to seek another term. The story also asserted that toll-road company BrisConnections paid a $500,000 success fee to former Queensland Treasurer Terry Mackenroth. Terry Mackenroth was not directly employed by BrisConnections –the project sponsors (Thiess Pty Ltd, John Holland Pty Ltd and Macquarie Group) engaged him.  The company Enhance Management was also incorrectly referred to as Enhance Communications. The story has been amended.

Trevor Rowe writes: Re: “How the corporate world looks after its own” Mr. Bolton as a then greater than 5% Unitholder requisitioned an extraordinary general meeting of BrisConnections seeking to pass a number of resolutions which would give effect to “winding up” of the BrisConnections Group, NOT as you state in your article “ …..in an attempt to force a corporate reorganization”. As required a meeting was so convened and as you should also be aware, prior to that meeting, Mr. Bolton sold his votes to Leighton Holdings and did not attend the meeting.  As you should also be aware, until the time of the meeting, the determination of votes is not final or certain and accordingly no disclosure can be made.  There was no failure of the continuous disclosure obligations by BrisConnections nor any misleading of investors.  In fact, as soon as we became aware of information, it was provided to the meeting and the market.  In addition, no charges or prosecution has ever been undertaken by the regulators in relation to our continuous disclosure obligations, nor do I expect any to be commenced.

There has been NO financial collapse of BrisConnections.  Rather, we remain fully paid and over 70% of the BrisConnections and Airport Link project of $4.8bn of construction is complete in readiness for commencement of operations in mid 2012 of this transformational infrastructure project.  In addition, funding for the entire construction program is in place, interest rates are fully hedged for the construction period and there are no refinancing obligations until mid-2018 (six years after opening).  We continue to be traded on the ASX.