Ann: 2018 AGM materials, page-11

Now the dust has started to settle, I am reflecting on an observation I made on HC some time ago.

Prior to the AGM, one of my concerns was that Kelaher was a long standing, strong CEO with what I assessed to be a relatively weak Chairman and BOD. I was concerned that Kelaher may have "captured" the BOD and was being inadequately challenged. I had that concern somewhat appeased when I attended the AGM and was personally reassured by the Chairman after the meeting that a thorough review had gone back to the early 2000's and no significant issues had been discovered.

With the benefit of hindsight, the warning signs were there: Kelaher's contempt for the regulator and the RC came through in his testimony, and the RC's concern that APRA was not acting against those who refused to address those concerns. Reading between the lines it seems that Kelaher was trying to appease the regulator with some window dressing, but essentially felt that the issues they raised raised were trivial.

Kelaher's character is like something out of a Shakespearean tragedy - a great and seasoned leader but through sheer bloody mindedness and hubris he has led his troops into disaster. 

It hurts to lose money but my lesson here is to never just look at the financials. Organisations are made up of a bunch of human beings and their egos, flaws and biases will combine to create the future we are trying to predict.