Good corporate advice tainted by poisonous product

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.

Reid book cover 001SafetyAtWorkBlog 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.

Kevin Jones

Categories asbestos, book, business, chemicals, executives, OHS, Uncategorized, wellnessTags , ,

4 thoughts on “Good corporate advice tainted by poisonous product”

  1. Viola

    The Ben Hills book was hugely influential at the time and it is a shame it is out of print.

    I think that the best(?) book on asbestos, at the moment is \”Defending the Indefensible\”. You may want to listen to an interview with Matt Peacock, Jock McCulloch, and Geoffrey Tweedale from September 2009. It is available for download at http://www.abc.net.au/rn/latenightlive/stories/2009/2673501.htm. As with sociologist, Andrew Hopkins, the non-OHS background of Tweedale and McCulloch (history) allows for a more powerful perspective, and a borader perspective, on the hazard than we get elsewhere.

    Kevin

  2. Blue Murder – not the ABC TV series about Roger Rogerson and the NSW corrupt cops ….

    http://www.amwu.org.au/read-article/news-detail/324/AMWU-seeks-Canadian-Consul-ban-on-further-exports-of-asbestos-to-impoverished-nations/

    MORE: http://en.wikipedia.org/wiki/Australian_Blue_Asbestos

    Killer Company: James Hardie Exposed By Matt Peacock Price: $35.00 On Sale:1/09/2009 Format Paperback ISBN: 9780733325809; ISBN10: 0733325807 http://www.harpercollins.com.au/books/9780733325809/Killer_Company_James_Hardie_Exposed/index.aspx

    Book Description James Hardie, the name, like the company, is a lie. The real James Hardie died a long time ago and had almost no connection to the Australian asbestos empire that grew under his partner Andrew Reid. The Reid family amassed a huge fortune as its asbestos company expanded, killing in its wake thousands of unwitting workers and customers. Today, Reid′s grandson John Reid is an honoured multi-millionaire, revered for his patronage and philanthropy. He chaired the company for 23 years, and oversaw a strategy that ignored the dangers of asbestos and silenced Australia′s largest asbestos union and government health authorities, concealing Australia′s largest peacetime disaster. Reid mentored his eventual successor, Meredith Hellicar, who defended Hardie′s move offshore until public campaigning by asbestos disease sufferers like Bernie Banton forced the company to adequately provide for its victims.

    ABC journalist Matt Peacock rips the cloak of secrecy from one of the greatest corporate scandals in Australia′s history. His painstaking research, involving newly discovered documents and interviews with over a hundred former Hardie employees and other key figures, reveals in stark detail how the company subverted the institutions designed to protect ordinary citizens, and how a dedicated group of unionists, lawyers and activists finally exposed Hardie′s subterfuge. Peacock first warned the public about the dangers of Hardie′s asbestos empire in an award-winning radio series in 1977. He has followed the tragic trail for more than 30 years: from the company′s factories where workers had asbestos ′snowball′ fights, to the mine where Aboriginal children played in the tailings, and into thousands of houses where Hardie′s asbestos now threatens home renovators, not just from their fibro walls and ceilings, but from the dust that still lurks under their carpets.

    COMMENT There is another classic Blue Murder by Ben Hills, published in 1989 by Sun Books, a division of Pan Macmillan Australia. It is out of print, but may be found in public libraries or bought through better second-hand book sites.

  3. This strikes me as a rather grander variation of a theme; Corporate Vision Statements.

    It seems to be one of the enduring constants in safety management that we can articulate both practical and aspirational visions for what our safety standards ought to be, but have a great deal of difficulty in translating those into practice, or in the modern jargon \”an effective safety culture\”.

    I do not think there has been a significant catastrophic event where you couldn\’t point to a gap in between what the organisation aspires to and what they were able to deliver in practice. As the Royal Commission into the Esso Longford explosion noted (by way of example):

    Evidence was given that OIMS was a world class system and complied with world\’s best practice. Whilst this may be true the expectations and guidelines upon which the system was based, the same cannot be said of the operation of the system in practice.

    It seems easy to articulate what is right, harder to practise it.

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