By Stephen Mayne


Further to yesterday’s item about
companies with an out of town chairman who get into trouble, another
element of this story is the cost involved. An anonymous tipster
yesterday sent through the following:

“I have just heard that
Westpac pay the lease on Leon Davis’ (chairman of the Westpac board)
apartment in the ‘Toaster’ building on Circular Quay. They are at
pains not to disclosure this, which is very odd given the lengths they
go to talk about corporate responsibility.”

We’ve put this to the Westpac spinner and are still waiting for a response but will let you know tomorrow.

Crikey has previously reported two other claims of out-of-town chairman
that cost shareholders about $300,000 a year to maintain an office,
namely Melbourne-based Qantas chairman Margaret Jackson and
Melbourne-based Onesteel chairman Peter Smedley. Both companies are
head-quartered in Sydney.

AMP even paid former Melbourne-based chairman Stan Wallis several
hundred thousand in extra allowances for all the time he had to spend
in Sydney, although the additional cost did nothing for shareholders
given the disasters that unfolded on his watch.

Coles Myer also helps out its Adelaide-based chairman Rick Allert when
he is staying in his Melbourne apartment and National Australia Bank
will presumably do the same thing for incoming Perth-based chairman
Michael Chaney.

These situations raise the issue of what should be disclosed to the ASX.
For instance, how much have News Corp shareholders spent flying various
members of the Murdoch family around the world in private jets over the
years? This does constitute a benefit to the family but is not
disclosed anywhere.

After all is said and done, having a chairman and a CEO living near the
corporate HQ is by far and away the best option in terms of keeping
costs down and maximising the operating structure of a company. It is
surprising that so many companies can’t seem to get this right.

Amcor, AMP, Babcock & Brown, Coles Myer, CBA, John Fairfax,
Foodland, James Hardie, Rinker, Lend Lease, Telstra, Multiplex, NAB,
Onesteel, Pacific Brands, Suncorp-Metway, Southcorp and Westpac are
just some of the companies that are currently or were recently
operating with a chairman and CEO in different cities.