Fran O'Sullivan: Ron Brierley child-porn allegation caps off 'the year of behaving badly'

Sir Ron Brierley. Photo / File

COMMENT:

Sir Ron Brierley once described to me his tastes as "epicurean".

That description has taken on a whole new meaning with news out of Australia yesterday that the former corporate raider has been charged with alleged child porn offences.

Police have yet to publicly name Brierley as the 82-year-old man arrested at Sydney airport whose "carry-on luggage was searched before the contents of his laptop and electronic storage devices were reviewed and which are alleged to have contained large amounts of child abuse material" – but Sydney papers were well-briefed so his name was out in public before suppression orders could be made.

This is a whole new ending to what I have coined as the "Year of behaving badly".

First, there was the leading-blue chip chief executive fired for sending an abusive email to senior colleagues, then the CEO of NZ's largest company pushed out the door ahead of his resignation period taking with him $4.6 million in exit payments but leaving behind him massive losses for his heir to deal with, then the boss of New Zealand's largest bank – a golden boy of banking - dumped unceremoniously for fudging his expenses.

All that was missing from the "Year of behaving badly" was a sex scandal.

Sydney papers are lapping up Brierley's arrest.

It is at once deeply shocking and also a tragic sequel to a spectacular career.

Remember these are still allegations. But the publication is so wide that the damage to his reputation will be permanent whatever the ultimate outcome of the court process.

Brierley formally retired from business in June this year citing age and health reasons for selling his stake in his last investment company, Mercantile Investments, and stepping back from the game. He was feted by several of the big names of Australian business.

Though Blake Nixon – one of Brierley's former colleagues – let me know from London that he was still dabbling with a 6 per cent stake in a shared venture.

Behind that lay GPG, IEL and Brierley Investments – three corporate raiding companies (or investment companies as they latterly came to be known) which shook the business establishment in New Zealand, Australia and London.

Sir Ron, a classic introvert, was an astute picker of stocks and talent.

In the 1980s, Brierley Investments (BIL) was the biggest company on the stock exchange in New Zealand with 160,000 investors.

It has not been all glorious. He was ingloriously pushed aside by Sir Paul Collins and Bruce Hancox at BIL when he opposed them selling what he regarded as prime assets in the post-1987 sharemarket crash environment.

He felt publicly humiliated when I broke the story in the Sydney Morning Herald that former Labour Finance Minister David Caygill was to dump him as chairman of then government-controlled Bank of New Zealand which was haemorrhaging on the back of an ill-judged foray into Australia.

I talked with the man many times in New Zealand and Australia in his 1980s and 1990s heydays. I know enough of how he dealt with previous failures to know that these allegations will have a huge psychological impact. He will retreat into his shell.

Hubris – particularly when it comes to the myth of the invincible CEO – has not been far from the centre of many of the major business news stories this year.

In August, I challenged why New Zealand boards of directors put such a store on international talent, writing: "Three CEOs of NZ's biggest companies. All foreign (although one later added a New Zealand citizenship). All paid a huge whack. All left under a cloud. Is there a pattern here that should make directors sit up and take notice next time they go to the global market for, as the cliche says, a "world-class executive" to run a major New Zealand company?"

Fletcher Building chief executive Mark Adamson was not slow to let people know privately what he thought of New Zealand business people when he joined the company – including his board. Not much.

Under his leadership – and with the agreement of his board – he plunged Fletcher Building into signing up major construction contracts where all the risk was one way.

Even as Fletcher was endeavouring to get on top of a steadily escalating financial hole, he was so ill-disciplined he sent out an inflammatory email to senior staff saying one unit of Fletcher was "full of pompous old farts". He also harshly criticised accounting firm Deloitte in the email and called for 100 staff to be culled from Fletcher's troubled building and interiors unit.

There was no comeback.

Hubris was also at play when ANZ chief executive David Hisco was fired.

Shock reverberated around the NZ market when ANZ NZ chair Sir John Key announced Hisco had got his marching orders (by agreement) for fudging expenses.

Former ANZ New Zealand CEO David Hisco. Photo / Getty Images

Despite a decade as ANZ's NZ boss, Hisco was until last year still pocketing a gold-plated annual "expat expenses" package worth close to half a million NZ dollars tax-free. That package — worth A$464,599 ($487,224) in 2018 — was plenty generous enough to swallow the tens of thousands of dollars Hisco was claimed to have spent on Corporate Cabs which are said to have been incorrectly chalked up to ANZ as direct business charges over a nine-year period.

Fonterra's Theo Spierings also lost sight of reality when he outstayed his welcome and failed to integrate into the New Zealand business community, imbuing New Zealand's largest company with a three Vs mantra: Volume, velocity and value. The result was destruction of value.

Regulators have had a field day in 2019.

But there are lessons from the "Year of behaving badly" that boards need to learn.

First, CEOs are not invincible. Two, boards need to sharpen up governance and be on guard for group think. Three, they should treat internal sceptics and whistleblowers with a great deal more respect.

The appalling damage wrought in 2019 could have been nipped in the bud if boards had taken a more rigorous approach.