Australia banking: Premier to customer officer? Baird’s NAB move explained
Going from premier of New South Wales to an uninspiring-sounding title at National Australia Bank looks an odd move at first glance – but there’s more to it than meets the eye.
|Mike Baird is to become NAB's chief customer officer, corporate and
At a press conference in Melbourne on Tuesday, National Australia Bank (NAB) announced three new appointments.
Two were of passing interest: Sharon Cook, managing partner at King & Wood Mallesons, as chief legal and commercial counsel, and Patrick Wright, the chief technology and operations officer of Barclaycard, as chief technology and operations officer. The third? That raised some eyebrows.
Mike Baird, who stepped down as premier of the state of New South Wales in January, is to become chief customer officer, corporate and institutional banking.
A state premier is a powerful job in Australia: the states, of which New South Wales is the biggest by population and economy, have considerable autonomy and he probably had a bigger day-to-day impact on the lives of Sydneysiders than the prime minister. He is said to have had his pick of offers when he retired from public life.
So, chief customer officer? It sounds like a mighty step down, particularly since NAB’s corporate and institutional bank – the bit for which he will have a mandate – is arguably the weakest of the big four Australian banks.
Though it holds its own in investment banking, chiefly DCM, it lags ANZ and Westpac in markets more broadly, and Commonwealth Bank of Australia and Westpac on the transactional side of the business, but there’s more to it than that.
[Baird] has to use every one of his diverse array of skills to turn around what is clearly the country’s worst-performing corporate and institutional banking business - Tony Boyd, Chanticleer
Firstly, despite the abject title, Baird’s role puts him straight on to the 10-strong NAB Group executive leadership team reporting to CEO Andrew Thorburn.
It is not a ceremonial door-opening role, as one might argue Australian politician Warwick Smith’s initially was when he joined Macquarie, or former Western Australia premier Alan Carpenter, who became corporate affairs head for Wesfarmers. Baird has a big job ahead of him that will need resources.
Also, one has to think he is looking ahead.
“Mike Baird is the first Australian politician to make the leap from parliament to business with a more than even chance of having a shot at becoming the chief executive of a top 100 company,” said Tony Boyd in the influential Chanticleer column.
“But in order for that to happen he has to use every one of his diverse array of skills to turn around what is clearly the country’s worst-performing corporate and institutional banking business.”
He has a better shot at this than most in his position because, although few in Sydney can recall a political landscape without Baird in it, he is a banker by background, who spent 17 years in the industry: at NAB, Deutsche and HSBC. He started out at NAB in 1989.
“I loved it,” he said. “NAB’s in my DNA. It’s like coming home.”
Thorburn’s not going anywhere soon: he only joined in 2014 and is expected to stay in the job for a few years, but already Baird is being seen as a future leadership candidate – Chanticleer’s Boyd reckons his challengers would be chief operating officer Antony Cahill, head of consumer and wealth Andrew Hagger, head of business and private Angela Mentis and chief risk officer David Gall.
Baird said the right things on Tuesday: “What Andrew [Thorburn] brings is a great sense not just of the importance of looking after our customers but the values and the way we do it.
“I’m determined to play a role in that, under Andrew’s leadership.” He called Thorburn “a great leader”.
Thorburn himself said on Tuesday: “[Baird] returns to banking and NAB with invaluable experience in leading economic and financial reform to grow the economy.
“Mike has outstanding leadership and a determination to drive change and make a difference by building relationships with customers and the community.”
Baird is returning to banking at a time of some dissatisfaction around the industry from both consumers and shareholders, and with growing fears that the mortgage- and commodity-fuelled glory days of Australian banking might be behind them.
He said on Tuesday: “Ultimately, all of the noise around the banking sector is an acknowledgement that from a customer point of view, they have a sense that banks aren’t necessarily listening to them.”