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Norris' view on Ballantyne's non-appointment

Former ASB Bank ceo Ralph Norris explains why Naomi Ballantyne didn't succeed Ian Hendry at Sovereign.

Tuesday, December 11th 2001, 9:41AM

I am writing in response to your article of 5 December Ballantyne reveals why she left Sovereign from excerpts taken from the book Reality is Crazy .

It is true Naomi was a well regarded employee who had performed outstandingly in administering Sovereign’s Operations function from the time of the company’s formation.

It is also true that Naomi was considered by Ian Hendry to be the only internal candidate capable of succeeding him. However, the appointment of a Chief Executive from a good governance perspective is the domain of a company’s board.

We knew Ian’s view, nevertheless it would have been irresponsible not to fully assess all options. We had to assure ourselves that his successor had the breadth of experience to succeed him, particularly given that the character and scope of the business would change as Colonial’s merger with Sovereign would create New Zealand’s largest Life Insurer.

While we regarded Naomi’s skills highly there were questions about her breadth of knowledge and depth of experience. The conclusion reached was that her appointment at this time could be high risk and that a more rounded and experienced person should be appointed.

This was a decision made by the Sovereign non-executive directors and ratified by The ASB Group Board and the Managing Director of the Commonwealth Bank of Australia.

In regard to my supposedly being " personally affronted" by Naomi’s decision to form a new company, this is somewhat of an overstatement. The major concern of the Board and Sovereign senior management was the risk of losing key staff to her start-up. In fact we did not lose any key staff.

Naomi was obviously bitterly disappointed in not being designated as Ian’s successor and as a consequence she saw ASB Group’s involvement from a negative perspective.

When we became involved with Sovereign in many ways it was akin to an adolescent suffering growing pains. The company had made many good decisions in regard to innovation and service, however, it had also made some poor decisions in regard to some acquisitions and other initiatives. Neverthless, we saw it as critical for us to encourage the good practices and to allow the company to operate with a high level of autonomy while introducing best practice processes by improving financial reporting, risk management and divesting non-value adding operations.

In conclusion, I think the following two quotes by Ian Hendry from the book sum up the reality of the relationship between Sovereign and its Parent.

  1. …the more information we gave them, the more confidence they had in the way Sovereign operated.
  2. …a very warm relationship developed between Sovereign people and the senior ASB managers they dealt with.

Ralph Norris is the former chief executive of ASB Bank

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