In Matt Peacock’s book, “Killer Company“, an entire chapter is devoted to the legacy of the James Hardie chairman, John B Reid. In Peacock’s talk at Trades Hall in October 2009, he mentioned that Reid had once published a book called “Commonsense Corporate Governance”. The apparent hypocrisy of an executive of a company that knowingly sells toxic material while advising others on how to manage their corporation responsibly generated chuckles of disbelief in the Trade Hall audience.
SafetyAtWorkBlog obtained a copy of John Reid’s book to see first-hand that someone could do such a thing. A sad part of all this is that the advice in the book is sensible but Reid’s “legacy” now taints all he does and all he says.
One random example of the advice he provides concerns dealing with consultants:
“Where, as with solicitors and auditors, it is imperative for the company to retain them, company staff need to be reminded that the professional advisers are paid for on the basis of the time that they spend on the company’s business. This is not predetermined by the nature of the task. In large measure it is affected by the decisions made and by the homework done within the company. What does this mean?
First, the imposition of new and more demanding, and frequently less precise, legislation on all manner of subjects has made management and, as a result, directors, nervous about things that directors 50 years ago would have dealt with very quickly-and inexpensively. Further, the increasing number of specialists necessary within a company’s own payroll is a result of this legislative epidemic, and has produced a reinforcement of this culture of caution and, occasionally, of fear.”
Safety professionals may want to take particular note of this corporate imperative.
Peacock points to the strict confidentiality clauses that Hardie included in any settlements in the 1970s. Peacock writes (p 156)
“Secrecy indeed was Hardie’s byword, one endorsed by the chairman, who would later advise aspiring directors to ‘remain silent where there is criticism’.”
Reid recommended this in a bulleted list of ways to handle the media.
John B Reid, whose personal wealth was estimated at $A181 million in 2004, is not unique in advising companies while also having a tarnished corporate reputation. Some argue that the adjective “good businessman” is a tautology.
There is no doubt that Reid was an active philanthropist and corporate citizen. He was awarded an Order of Australia for “service to industry” – no citation is available to explain the decision. In 2006, he received the Goldman Sachs JBWere Philanthropy Leadership Award.
Greek tragedies were full of hubris and examples of the single flaw that made good men do bad things. If the plays of Euripides, Aeschylus and Sophocles have yet to be analysed for their advice to corporate executives, they should be, for not only do they show human flaws but human corporate flaws.
John B Reid’s book on corporate governance is an easy read and has valuable lessons but it is now a book that makes the reader feel dirty.