Chief executive as politician

ROB STOCK
Last updated 05:00 02/11/2014
Anthony Healy
CHRIS SKELTON/Fairfax NZ
VOCAL: BNZ CEO Anthony Healy says it’s important for business to have a strong voice.

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When BNZ chief executive Anthony Healy took to the stage to make his "inaugural" public speech it had all the pomp, circumstance and media presence of a major political event.

No fewer than 18 journalists were in attendance in the grand Art Deco ballroom in Auckland's Heritage Hotel where Healy, five months into the job, was speaking to the Trans-Tasman Business Circle.

Healy delivered a speech any politician would have been proud of, identifying priorities for bettering the country, ranging over polluted rivers, failings in the education system, the Asian-isation of New Zealand, and the need for super-fast internet, including five key measures he will use to judge the performance of the Government.

Afterwards, comfortably seated on couches in the corner of the ballroom with a view out over Auckland's CBD, Healy said the speech was "very much a tradition in the US," where there is a "deeper engagement" between civil society and business leaders.

It is business leader as critic of national settings, intentionally seeking to set agendas for change, with the agenda organised around the betterment of the nation defined in economic terms as "New Zealand Incorporated", the success of which "matters profoundly" to every New Zealander.

"It's important business has a strong voice," Healy says. It has the money, and the scale, to have an impact.

There seems to be a convergence of business and politics, especially for big business, which has much to gain or lose as a result of Government actions.

The tools and skills of politicians have become essential to bank executives. While banks are noted for having teams of communications people, communicating to both the public and to staff, like many a politician, Healy also has a personal communications person to help him manage his image and message.

Healy is also very focused on his core constituency, the staff of BNZ. In his first five months, he has met around half of them personally, which is no mean feat considering BNZ employs over 5000.

It's a journey that's taken him all around New Zealand, though as the former chief executive of UDC Finance, Healy already knows the country well.

To prepare for meetings with staff members, he has crib sheets prepared so he can learn names, and a bit about each person, again a strategy politicians use. Like a politician, the appearance of ease and confidence in making public speeches comes in part from study and preparation.

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Healy spent a good bit of the previous day practising his speech, one of his entourage confides. It was a speech that cast big business as corporate citizens that must be part of the solution to our worst social and environmental problems.

There's a school of thinking that by its very nature, the "corporate" is - to not put too-fine a point on it - self-servingly psychotic. It's the Joel Bakan view of corporations as expressed in his seminal book The Corporation: The Pathological Pursuit of Profit and Power.

In that view the corporation's legally defined mandate is "to pursue, relentlessly and without exception, its own interest, regardless of the often harmful consequences it might cause to others."

Healy rejects that.

Shareholders do want financial returns, he says, but ethical responsibility is required.

"They want us to deliver sustainable shareholder returns which means keeping the bigger picture in mind.

"I have never thought that you can't get the balance right and deliver both."

Healy goes further: "If you don't, that's when companies come unstuck."

If the management of a company gets out of step with its customers or shareholders, then the management's future isn't going to be a long one, he says.

Increasingly people don't want to work for companies they don't believe are making a positive difference.

"We all want to find a company where our personal values are aligned to a greater extent to the values of the company," Healy says.

That puts the onus onto chief executives.

"I have always had a strongly-held belief that one of the most important tasks of a leader is to connect their people to the higher purpose of what they do. People want to know what they do matters, that they matter, and that they can find meaning and purpose in what they do, other than just deliver for shareholders."

There's a risk to a bank chief executive speaking out on social issues like "dirty dairying", though Healy dislikes the term.

"You can't solve problems of this magnitude by blaming other parties, and using black and white stances," he says.

The risk is that people ask whether the quickest solution wouldn't be for organisations like BNZ to stop funding societally and environmentally damaging businesses until they changed their ways.

It's an uncomfortable truth, but every bank will have egregious polluters, serial breakers of competition laws, exploitative lenders, pornographers, fast-food pushers, and tobacco manufacturers in their customer base.

Healy insists embargo-like responses don't deliver the best results.

"I think people are thinking too traditionally about this," he says.

"The biggest impact is when you work with your customers."

He gives the example of many small and medium-sized businesses which fail to take the next step that would allow them to internationalise. It's a capacity problem, and Healy says BNZ has sought to help by investing in business growth programmes through the Icehouse business incubator.

"We have put over 5000 of our customers through business growth programmes at the Icehouse and we have seen their revenue increase 30 per cent on average over three years - 2.5 times faster than businesses that haven't been through similar programmes," he says.

This win-win (profits for you, more banking fees for me) approach can be seen underpinning BNZ's brand tagline: To help New Zealanders be better with money.

Another example is BNZ seeking to cast itself as the bank that wants you to get out of debt faster.

It offers various products not yet matched by the other banks, such as the tailored home loan, which lifts borrowers repayment levels each year to help them clear their mortgages faster, and a credit card for people with mortgages that charges debt at their mortgage rate.

The result is borrowers paying less interest during their lifetimes and BNZ boosting its swelling market share and making bigger profits.

Not all of BNZ's corporate goodness is based on this win-win model.

Earlier this year the bank committed $10 million for five years to a Government-initiated scheme to fund low and no interest loans for poor people to help them get out of the clutches of loan sharks and finance company debt.

Critics might attack the Government for failing to cap interest rates on lending at the bottom end of the market, but the $10m is real money on which BNZ expects to make no commercial return.

The aim of the project is to increase "financial inclusion", something BNZ's parent National Australia Bank has committed a lot of money to.

Banks have not been noted as welcoming places for the poor. It's a common refrain in certain poorer communities, where swathes of the population feel shut out of mainstream lending.

Healy says banks must get better at financial inclusion.

"My philosophy is everybody regardless of financial circumstances ought to have access to the banking system," he says.

Healy baulks when it is suggested that poor people make for less profitable, and hence unattractive customers. Technology offers the best chance of a solution. Mobile banking technology has the potential to reduce the costs of banking, and enable youngsters with few resources to bank easily.

It may also be breaking down bank customer "stickiness", the phenomenon of people sticking with the same bank for their whole lives.

As well as setting an agenda, and being able to demonstrate commitment, the politician-CEO must be politically-connected to be able to influence Government policy.

BNZ has a team dedicated to lobbying Government, but should an issue or policy be of particular importance, Healy can get access to politicians, either by making a direct phone call, or at private functions where politicians are available for a quiet chat.

But what of the man behind the professionally-crafted public persona?

Healy's co-workers speak of him as a dedicated family man, who likes to do the school run before heading to work, and to be there in the evenings with the family too.

That means bank meetings start after 9am, and they are not encouraged to go late.

It's a work-life balance that Kiwibank's former chief executive Sam Knowles earned plaudits for, and which earned him the love of his staff, pleased to work for a bank which did not demand their every waking hour in recompense for their salaries.

Healy kicked off his speech with a reference to his six-year-old daughter Caroline, who he says thinks CEO might stand for "chief chocolate eater".

It was a joke that established him in the minds of the audience as a leader with priorities beyond the boardroom, a man with a desire to leave a better New Zealand for his children.

HEALY ON . . .

The Asian-isation of New Zealand

"BNZ's head of migrant and Asian banking is a man called Frank Cui. When he arrived in New Zealand 13 years ago he was not a fluent English speaker. Now he heads one of BNZ's highest growth businesses in an area that can only grow in importance. Frank's story is, I think, worth shouting from the rooftops. Any decent-sized business looking to grow and prosper over the next 10-20 years, and not just here in Auckland, will need a Frank of its own."

62 per cent of lowland river waterways being officially classified as unsuitable for swimming

"I'm optimistic, because I've observed the emergence of an interesting coalition of aligned voices on the issue of water quality. These voices are not confined to one part of the ideological spectrum.

"This is not just a ‘farmer's issue'. The problem is collectively owned by anyone who has eaten anything produced on a farm. Which pretty well covers all of us, including a banking sector…"

The 26 per cent of students who leave school without a qualification at NCEA level 2 or above

"I think we should throw the kitchen sink at improving this statistic and build on the small progress made in recent years.

"If our children aren't achieving at school it won't be for any one reason. It's a problem that in my view is caused by a combination of parental role-modelling, issues of poor housing and health, child poverty, and others. "I believe in the absolutely fundamental importance of education."

On the need for more houses and businesses to get ultrafast broadband

"There is no doubting that digital technology will enable savvy New Zealand producers to expand their trade with the world in ways that might have seemed inconceivable even a few years ago." 

- Sunday Star Times

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