David Jacobson's External Insights

AWB Index

This is an index of my postings on AWB and the Oil for Food Inquiry conducted by Commissioner Cole ("the Cole Inquiry"):

Australian companies and Iraq Oil For Food Inquiry (19 Jan 2006)

Reputation risk: the AWB experience  (31 Jan 2006)

Oil-for-Food Inquiry: expansion of terms of reference (3 Feb 2006)

AWB and Oil for Food Inquiry: Managing Director resigns and corporate governance to be reviewed (9 Feb 2006)

AWB and Oil for Food Inquiry: who knows what and where is it kept? (16 Feb 2006)

AWB: monopoly and governance issues (22 Feb 2006)

Cole Inquiry: what did the AWB Board know and when and why is it important? (11 March 2006)

Cole Inquiry terms of reference amended (3) (20 March 2006)

Cole Inquiry: isn't there a summary of AWB facts and where are the missing emails?  (25 March 2006)

Cole Inquiry: AWB risk management advice is not legally privileged (6 April 2006)

AWB challenges Cole (6 April 2006)

Cole Inquiry : AWB corporate secretaries resign (12 April 2006)

Cole Inquiry: what the Government knew about AWB contracts (14 April 2006)

Cole Inquiry and AWB: corporate culture and criminal responsibility (25 April 2006)

What offences might AWB have committed? (27 April 2006)

Cole: no action over political comments  (28 April 2006)

AWB Inquiry update (12 May 2006)

Federal Court decision on AWB apology (17 May 2006)

Cole publishes AWB document (18 May 2006)

Royal Commissions Act to be amended (24 May 2006)

Cole Inquiry: AWB goes back to court (30 May 2006)

Royal Commissions Act amended (13 June 2006)

AWB obtains injunction against Cole (21 June 2006)

AWB Oil for Food Inquiry reporting date extended (22 June 2006)

US class action against AWB (11 July 2006)

AWB v Cole update (19 July 2006)

Cole Inquiry and AWB update (10 August 2006)

AWB: case study in the difficulty of apologising (17 August 2006)

Cole Inquiry hearings resume (24 August 2006)

Federal Court decides on AWB's claim for privilege (18 September 2006)

Cole Inquiry reporting date extended (22 September 2006)

Cole Inquiry report (27 November 2006)

Government response (4 May 2007)

ASIC sues AWB directors and officers (19 December 2007)

Corporate blogging

Business Sunday had a good introduction to corporate blogging last weekend although it did not seem to be much of an advance on The Bulletin's article last year.

The Bulletin offered these rules which I still like:

1. No financials

2. No secrets

3. No bagging

4. Don’t host blogs on your own servers

5. Be honest

6. No phonies

7. Update!

8. Remember that what you write will end up in Google forever

Discuss: A Blogger in their Midst

Links: Corporate Engagement, Frankarr

UPDATE 7 March: Business Blog Consulting comments on the Business Sunday program here. I have to agree with Des Walsh that the piece would have finished on a flat note but for Frank Arrigo's closing comment. The two professionals interviewed were from international firms Deloittes (accountants) and Baker & McKenzie (lawyers) who both were quoted expressing concern about controlling blogs for compliance and liability.

Denise Howell's post in Between Lawyers restores some balance: there are other forms of communication that are more likely to expose a business to risk. I think that anything in writing (such as blogging) is likely to involve more care and thought than say a discussion in a bar or on the golf course .

The truth about customer satisfaction

Part of my research for my web seminar on online financial services was trying to find data on what customers want.

My initial reaction was "that's obvious: it has to be cheaper, faster, more secure...always".

I found a great academic article The key determinants of internet banking service quality: a content analysis by Jun and Cai which
identified a total of 17 dimensions of internet banking service quality, which can be classified into three broad categories- customer service quality, online systems quality and banking service product quality.

But I think Seth Godin's practical views are just as valid: consumers say they want "perfect, now, cheap" but he thinks they want "interaction, expectations exceeded, respect".

AWB: monopoly and governance issues

The Oil for Food inquiry into AWB raises more issues than just AWB's corporate behaviour in Iraq.

There are sensitive political and economic issues relating to AWB's monopoly over the right to sell Australian wheat. That monopoly is linked to AWB's particular shareholding and governance structure by which wheatgrowers have one type of share and investors another.

Two economic commentators (John Quiggin and Nicholas Gruen) have now expressed the view that the monopoly should end. Their articles and the comments are worth reading.

Facilitation payment or bribe: is disclosure the difference?

Does your company have a policy about making payments when doing business overseas to "grease the wheels"? What is the difference between paying local "advisers" and paying a bribe? Is the difference your expectations of a result or whether the payment is disclosed?

Woodside Petroleum publicly states that it does not offer, pay or accept bribes or make donations to political parties.

Forbes.com has a story on the most corrupt countries. The only Asian countries are Bangladesh, Myanmar and Pakistan.via Transparency International.

AWB and Oil for Food Inquiry: who knows what and where is it kept?

It used to be that when people spoke of a document that was a smoking gun they spoke about an incriminating document that was hidden somewhere in boxes and boxes of irrelevant documents, waiting to be found.

Today a smoking gun is more likely to be an electronic document that is much harder to find than a piece of paper. And the search for these electronic files has given rise to discussions about electronic discovery, document retention and knowledge management .

Yesterday at The Oil for Food Inquiry the Commissioner and counsel expressed their frustration about the discovery of material in an AWB database that should have been produced weeks ago. That material may or may not be a smoking gun but it does appear to be important in proving knowledge of facts at particular dates.

What was interesting was the subsequent analysis of how this data was discovered: someone remembered it! It does not appear to have been catalogued anywhere or to have been reproduced in hard copy. It was someone's job to maintain this database and they asked for the hard copy to be produced. It wasn't found by a database search or any special electronic discovery software used by investigators. Once the person remembered it, retrieving it appears to have been relatively easy although there was some debate about dates and versions.

The point of this note (apart from updating the AWB saga) is that organisations need to understand their risks and have in place systems to manage knowledge related to those risks. They need to know who does what in their organisation and how and where knowledge is stored. It should not take weeks or months to locate important information.

AWB and Oil for Food Inquiry: Managing Director resigns and corporate governance to be reviewed

The Board of AWB Limited has announced that the Managing Director of AWB Limited, Mr Andrew Lindberg, has tendered his resignation, which has been accepted by the Board, to be effective on April 30, 2006. (ABC News)

The Board has also announced a number of initiatives including:

• The establishment of two sub-committees of the Board to assist with the management of the Company, a stakeholder management committee and a governance committee.

• The Board of AWB Limited has commissioned its internal auditors, PricewaterhouseCoopers, to conduct a special review of the design and operation of internal controls around current wheat export sales. The objective of the review is to assist the Board to assess the Company’s systems of control and, where necessary, implement improvements.

• KPMG has been asked to consider the current governance, internal reporting structures and practices of the Company generally, and their practical application.
  

Oil-for-Food Inquiry: expansion of terms of reference

The Commissioner of the Oil for Food Inquiry has made a Statement in response to media speculation about broadening the Terms of Reference to include the Government.

Mr Cole QC made it clear that he had authority to determine whether there were any breaches of the law and as defrauding the Commonwealth was a possible crime he had authority to take evidence concerning the knowledge of the Commonwealth, and in particular the Department of Foreign Affairs of Trade, regarding AWB without the need for expanding the Inquiry's Terms of Reference.

However Mr Cole said that he did intend to ask the Government to extend the Terms of Reference to allow him to investigate matters relating to BHP Billiton Limited and Tigris Petroleum Corporation Pty Ltd as those companies were presently outside the Terms of Reference.

Yesterday Mr Cole gave Reasons for his earlier statement that AWB had not been fully co-operating with the Inquiry. He also rejected AWB's complaints of unfairness. The following quote from Mr Cole is worth noting:

It follows that I reject in its entirety the submission that there has been any unfairness either to AWB or to any witness in the processes adopted by this inquiry or in the manner in which it has been conducted. It is obvious that damage has been done to AWB both in a reputational and economic sense. In part, that may be the inevitable consequence of being the subject of an inquiry such as this. Such damage is unavoidable, particularly where evidence is called which may not be seen as in conformity with positions previously adopted by AWB.... This inquiry is not responsible for that consequence.

UPDATE 7 February: The Attorney General has agreed to expand the terms of reference to include BHP Billiton Limited, Tigris Petroleum Corporation Pty Ltd and related companies and persons .