NAB Boardroom Battle Escalates as Walter Calls for Shareholders to Sack Chairman Kraehe

Strategic Insights -

As the National Australia Bank's boardroom battle intensifies, Cathy Walter, the bank's maverick director, has dramatically raised the stakes by calling on shareholders to sack chairman Graham Kraehe and sweep the board clean. Walter, who has been a vocal critic of the bank's handling of a $360 million foreign currency loss, has proposed a set of resolutions to put to shareholders at an extraordinary meeting, including a request to search for a new chairman and to remove all non-executive directors from the board once their term expires. This unprecedented move comes as the NAB board meets to discuss the expanded agenda for the extraordinary meeting, expected to be held within 28 days.

Key Takeaways:

  • Cathy Walter has proposed a set of resolutions to put to NAB shareholders at an extraordinary meeting, including a request to search for a new chairman and to remove all non-executive directors from the board once their term expires.
  • Walter has offered to be the first director to step down if the resolutions are passed, and has suggested that directors, including herself, should forgo at least $1.4 million in retirement benefits and allowances.
  • The resolutions are aimed at addressing systemic failings that led to the $360 million foreign currency loss, and providing clear direction as to how the company can move forward.
  • The new chief executive, John Stewart, would be allowed to remain in his position.
  • The NAB board meets today to discuss the expanded agenda for the extraordinary meeting.
  • Walter has accused chairman Graham Kraehe of failing to spot the currency losses, and has called on shareholders to censure the board for its role in the scandal.
  • The scandal has led to the replacement of several senior executives, including the four traders at the centre of the scandal.
  • Two damning reports have called for a change in the bank's systems and culture.

Statistics:

  • The foreign exchange loss is estimated to be $360 million.
  • The bank's annual profits are $4 billion.
  • The bank has 340,000 shareholders.
  • The new chief executive, John Stewart, replaced Frank Cicutto.
  • The scandal has affected the bank's 146-year history.

Sources:

  • "Byline: Duncan Hughes National Australia Bank's maverick director Cathy Walter..."
  • "It will create the unprecedented situation of the chairman of a major company chairing an extraordinary meeting in which his own future with the company is a key issue." (Source: Duncan Hughes)
  • "They (the shareholders) would prefer us to deal with these issues inside the board, but given that we have got irreconcilable differences, they want us now to move on and that means we have to make a change of director, because Mrs Walter has unfortunately lost the confidence of all her fellow directors." (Source: Graham Kraehe)
  • "What started as a comparatively minor foreign exchange loss for a bank with annual profits of $4 billion has rapidly escalated into the greatest crisis in its 146-year history..." (Source: Duncan Hughes)
  • "Two damning reports have called for a change in systems and culture and led to the replacement of its chairman and chief executive in addition to several senior executives and the four traders at the centre of the scandal." (Source: Duncan Hughes)