New National Australia Bank chief executive Andrew Thorburn heralded his rein by anointing a new court of senior management.
Much has been said about his choices and those who will leave the bank but one particularly interesting aspect is the deeper entrenchment of New Zealand banking in Australia.
Thorburn is Australian but his stint before this was as head of NAB’s New Zealand bank, BNZ. One of those elevated, Renee Roberts, was his chief risk officer.
Thorburn’s predecessor, Cameron Clyne, also came to the role from running the New Zealand bank.
The “Kiwi Invasion” was a phenomenon first noted under Ralph Norris’s reign at Commonwealth Bank. Among a swathe of New Zealanders were chief financial officer David Craig, then head of marketing Barbara Chapman (who is now back in New Zealand running CBA’s ASB subsidiary) and of course Norris himself.
Today current CEO Ian Narev is from New Zealand, head of international Simon Blair spent time running the bank’s New Zealand insurance arm and there’re still a lot of All Black supporters in senior ranks.
Here at ANZ, the New Zealanders include the head of the Australian bank Phil Chronican, chief financial officer Shayne Elliott and head of risk Nigel Williams. Deputy chief executive Graham Hodges spent time running the bank’s New Zealand business.
Westpac Banking Corp is the only one of the big four Kiwi-lite.
Maybe this is a statistical anomaly reflecting nothing more than business mix and historic migration (which is now reversing with a net return of emigrants to New Zealand).
But speaking with head hunters, senior bankers and investors, both recently and when the All Black Bank era took off at CBA, there’s a feeling there is more to the theme.
Most significantly, and this applies to both New Zealanders and Australians who have run New Zealand businesses, New Zealand is an ideal size to be a stepping stone to senior management at a major Australian or international organisation.
Leaders there must become well rounded bankers, across all aspects of the business and comfortable with all stakeholders, whether they be customers, staff, regulators, politicians or community figures.
This point was made explicitly when both Clyne and Thorburn took their roles at NAB but the more general point is one Mike Smith here at ANZ emphasised almost from the day he arrived: what ANZ – and Australian banking in general – was short of, according to Smith, was “generalist bankers”. Smaller markets like New Zealand create an opportunity for developing many more bankers with generalist rather than specialist skills.
Indeed, particularly now with its super regional strategy and operations in 33 countries, ANZ has an even greater need of these generalist bankers. For that reason, the bank has a formal program to train up such people, giving them a wide exposure over different regions and businesses in a long term program.
As one senior New Zealand business figure put it, New Zealand makes executives more “match ready”. For example, at ANZ (which of course is the Australia and New Zealand Banking Group) there is institutional banking, retail, business, commercial, agri, wealth and a private bank, not to mention a full technology shop. Bankers in New Zealand need to be able to talk with Mrs Jones who pops into the Naenae branch, exporters looking to exploit to China, Federated Farmers and the Prime Minister.
There’s also the argument New Zealand is over-banked and therefore more competitive.
This over-representation of senior bankers in Australia with that “generalist” background, courtesy of time in New Zealand, demonstrates the essential truth of this proposition.
Another perspective to this story, and this applies to the Kiwi bankers who have emigrated, is a less tangible but no less important consideration. New Zealanders travel, have resilience and are adaptable – all key elements for global bankers and leaders.
The travelling element of this is evident in tourism and immigration data, New Zealanders are world leaders – even if most just skip across the ditch.
But speaking to recruitment firms who now, and particularly for senior management, spend considerable effort trying to measure qualities like resilience and adaptability, they make the point New Zealand candidates score very well.
In part that is reflected in their propensity to travel. Other factors are more speculative. Some trace the resilience back generations to early European settlement. For others though it is more recent history: New Zealand has come through a couple of decades of boom-bust cycles, drastic financial deregulation, industrial upheaval and forced economic restructuring.
Adversity breeds strength, in that view. New Zealand too has been a world leader in electing and appointing women to positions of power, including a period when the prime minister, governor general and chief justice were all women.
Such role models encourage more female participation at senior levels, again enriching the corporate leadership pools.
While New Zealanders no doubt disagree, the over-representation of their kind in senior banking ranks probably reflects nurture, not nature. Or indeed lack of nurture, given those periods of adversity.
The country is the ideal size to develop leaders and recent cycles have provided the ideal environment to prove them.
A quick scan of the talent provides examples of those who were prepared to travel far and wide for their career – Narev, Elliot, Chronican, Craig – and those for whom New Zealand has proved a testing ground – Thorburn, Hodges, Clyne.
The deeper lesson is top banking talent – indeed top leadership – need to be tested in development, both in training and experience. Training, of the sort the generalist banking program here provides, is a necessary but maybe not a sufficient condition.
Adverse conditions will certainly test the mettle. But the opportunity and challenge of being the figurehead of an organisation, expected to do far more than just run the operations, is the best lesson from the New Zealand story.
The bosses of the big Australian banks are very public figures. Their companies represent around a third of ASX capitalisation and more than that in most private share portfolios, they are public figures and the banks are emblems, for better or worse, of corporate Australia.
The heads of banks in New Zealand face the same challenge. Thorburn, for example, was outspoken on economic policy and the housing market and a champion of issues like financial literacy. The field may be bigger in Australia but for those tested in New Zealand, history shows it to be an excellent training ground.
Although that is one idea to steer clear of – history also shows staff engagement in New Zealand falters if the chief executive is seen as a foreigner being groomed to leave again. One of the crucial challenges for the New Zealand market is to be a champion of New Zealand – something David Hisco of ANZ is careful to do (and he’s also taken citizenship) and something Thorburn was also noted for in his time.