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(generated from captions) hat to identify with that

cause. Of course, they are the

ones who seized Alan Johnston

the BBC correspondent who is

still in captivity in their

hands, as well as an Israeli

corporal taken out of Israeli

territory. Now I put it too

strongly earlier to say that

Israel is allying itself to

Fatah. But certainly at the

present moment the strategy

appears to be to try to prop up

the Fatah leader, Mahmoud

Abbas. How is that going to

work, do you believe? Well, in

my personal opinion, Mahmoud

Abbas is a man I personally

negotiated with. I understand

that he has tried to build a

reasonable civil society among

the Palestinians. But he has

had a very difficult time in

doing so. I'm not sure frankly

that he is going to be able to

save the situation for the

remnant of the regime that is

hiding out in Ramallah today.

I think this is going to

require a regional effort in

which Egypt will have to

finally block off that weapon

smuggling from Iran and from

al-Qaeda that goes into the

Gaza Strip and Jordan may have

to take a more robust role in

helping the Palestinians of the

West Bank get on their feet.

But I think leaving it to

Mahmoud Abbas whose health

isn't good, who has just

undergone a terrible shock of

seeing the Gaza Strip taken

over by Palestinian Taliban,

that's not a scenario that's

going to easily work itself

out. At the same time,

politically both Olmert and

Abbas are extremely weak and

vulnerable. For the first time

in a sense, they actually need

each other? The question is

what do you have to work with.

If you ask Mahmoud Abbas what

he wants, he'd like to reunify

the Gaza Strip and the West

Bank. The Gaza Strip under

Hamas the West Bank under

Fatah. There's enormous bad

blood that's been spilled and

when you spill blood in the

Arab world, these things are

remembered for generations. I

don't see how they're going to

put back that connection

between the Hamas regime on the

one hand and the Fatah regime

on the other hand. Ehud Olmert

has been coming forward with

all kinds of grand gestures for

new Israeli concession s that

simply don't have a partner on

the other side. So part of -

he is now I suppose putting his

political reputation on cutting

some new peace deal with the

Palestinians. That's not in

the offing. I think we have to

have less dramatic goals. We need goals that we can achieve.

One of them is stabilising

Palestinian society. One of

them is changing the situation

on the ground in the West Bank

so it's less like Somalian

Mogadishu and more like the

cities of the kingdom of

Jordan. That's going to take a

lot of resources and patience.

But if anyone wants to have a

signing ceremony on the White

House lawn and boost their political status either in the

US, Europe or in Israel, that's

not on the cards. What is on

the cards is according to Prime

Minister Olmert anyway, the

removal of West bampg

checkpoints and freeing up of

travel restrictions in the West

Bank. He has to get that

through Cabinet, will they

agree to it? Nobody likes

checkpoints and our young

18-year-old soldiers would

rather be in university getting

a degree don't like sitting out

at a checkpoint in the West

Bank either. The problem is

what is the security situation

on the ground. If a

responsible government will

emerge who can take over security in the West Bank

cities and promise Israel

you're not going to have

suicide borps going into the

heart of Tel Aviv and

slaghtering teenagers from

Israel at a discotheque we can

get rid of the roadblocks. As long as there is a military threat out there we have to

have those roadblocks in place.

If Mr Olmert can persuade the Israeli Government that the

threat level has dropped. If

the army and the intelligence

service awe authenticicate that

assessment then he has a chance

of getting that through. We

spoke last night to a moderate

Palestinian staffer, he told us

that under the Palestinian

constitution the legality of Abbas's emergency government

will actually expire in 30

days, at which point he

predicts another political

crisis and pretty much anything

could happen at that point.

What's your assessment? Well, I

think it's a very fluid

situation. The Arab world is

responding to this. Initially

they seemed to give Abbas a lot

of support but they're going to

go with whoever has the power.

In the meantime let's keep our

eye on Iran. Hamas years ago

used to get most of its support

from Saudi Arabia. Today

there's still Saudi support for

Abbas but most support comes

from the Iranians. The

Iranians see the Hamas takeover

as ale golden opportunity to

spread influence to the eastern

Mediterranean, to the

Palestinians, to build up a

military presence there. And I

think that those military

dangers, that Iranian

penetration is going to be the

source of the real crisis here

with all due respect to the

constitutional difficulties the new Palestinian Government

faces. We will have to leave

you there. We thank you very

much for taking the time to come to talk to us

tonight. It's my pleasure.

Australia has gone on an $11

billion shopping spree for new

naval ships. The Government's

chosen a Spanish tender to

build five new war ships which

will boost the military's

capacity to send equipment and

thousands of troops to foreign

shores. Greg Jennett reports.

Full steam ahead and don't

spare the expenses -

Australia's biggest ever naval

expansion will deliver five new

ships over six years with an

$11 billion price tag. Defence

equipment is very, very expensive. Against the Navy

chief's recommendation, the

Government selected a Spanish

bid over a bigger American

option for five Air Warfare

Destroyers. The first will hit

the water in 2012 equipped with

a powerful missile system

capable of being upgraded into

a US designed missile defence

shield. The hulls will be

built in Melbourne, weapons

systems in Adelaide, with other

work to be spread around the

country. More than 1,000

contractors will receive

work. Dwarfing the Air Warfare

Destroyers, the Government's

also buying two aircraft carrier-style transport ships

from the same Spanish

company. They will greatly

enhance Australia's capability

to send forces in strength when

required, particularly in our

own region. They can carry an

entire battle group of up to

1,000 troops and get them

quickly onto foreign shores.

Some analysts have predicted

they'll send the wrong signal

to neighbours. It's not that we

have hostile intent towards anybody. The total price for

the five ships is already $3

billion higher than what

defence had been predicting,

raising doubts about the value

of the deal and what the final

cost will be. This is the

latest in a long list of

projects which have gone

considerably over budget. We

seem to be paying a lot more

than some other countries are paying for equivalent

capabilities. All ships are due

to be in service by 2018.

Well, the Chinese economic boom

is proving to be a bonanza for

the Australian economy, but its

astronomic growth has a

downside. An independent

agency in Holland has

calculated that China may have

already passed the United

States as the world's biggest

polluter. And a British Government official estimates

it's now building two

coal-fired power stations every

week. This report from the

BBC's Roger Harrabin. As

Britain strooifs to combat

climate change... here's the

worrying reality from China,

the biggest man-made surge in

carbon emissions this planet

has seen. China is the workshop of the world and in

the West we're all part of this

problem. The more Chinese

goods we buy, the more Chinese

emissions go up. Driven by

huge power stations like this.

The annual emissions from each

one equivalent to an extra two

million cars on the road every

year. It had been thought

China was building a new power

station every week but the

BBC's 10 o'clock news has

learned the figure is a

staggering two power stations a

week. Britain's climate envoy

John Ashton found out the

figure by analysing data on a

recent trip to China. China is

building new coal-fired power

stations extremely rapidly,

probably two a week now and

still accelerating. They're

doing that because they're

having trouble supplying enough

energy to keep their economy

growing fast enough to keep

China stable. The really bad

news is that China's boom is

fuelled by cheap, dirty coal,

the country's only major fossil

fuel. Official figures suggest

China's rocketing carbon

emissions will soon catch up

and overtake America's, making

it the world's biggest

polluter. Today a Dutch think

tank said it believed this may

already have happened. We need

China to get its emissions

under control and the most

effective way to do that is to

walk our own talk. Otherwise

there's no chance of getting

the kind of decisions in China

that we need. Secondly, the

Chinese will point out and

actually quite rightly that

we've created most of the

problem in the first place and,

therefore, we should be willing

to lead in the solution. Here's

the political imperative

driving China's break-neck

expansion. The China we rarely

see. 700 million people with

low pollution lifestyles

earning less than $2 a day.

The average American pollutes

six times more than the average

Chinese. The Chinese

Government fears instability

unless it pulls people out of

poverty. People living in the

countryside, they not

understand much about climate

change. First thing, they want

to have a good life, good

living standard, improve their

life. So Chinese Government

understands these things. Today's news about

China's head-long boom has made

it clearer than ever before -

the Chinese desire to live like

we live is now a problem for us

all. The question is how we'll respond?

'Lateline Business' coming up

in just a minute. If you'd

like to look back at to want's

interview with Dore Gold or

review Lateline's stories or

transcripts, you can visit our

website. For now it's over to Lateline Business with Ali

Moore. Thanks, Tony. Tonight

from media, to gaming to

mining, small shareholders fear

losing control of their

investments . This decision

sets a precedent for other less

scrupulous directors who might

be tempted to move from let's

say a dotcom to Viacom by

stealth. Conflict - what

conflict? Alinta's former chief

defends the ethics of his

management buyout. CEOs look at

management buyouts all the time

around the world and I didn't view it as anything

particularly unique in that

regard. CC

To the markets which have

more than recovered recent

losses to close at another

record high. The All

Ordinaries added 28 points.

The benchmark ASX200 finished

25 points stronger. In Japan

the Nikkei made modest gains.

Hong Kong's Hang Seng put on

just over 100 points and in

London the FTSE is 32 points

higher in morning trade. The

$1 billion battle for Symbion's

consumer and pharmacy division

social security over after

Healthscope trumped the bid

lobbed by Sigma earlier this

week by a single dollar.

Symbion chief executive Robert

Cooke has told blibz Sigma had

one chance to beat

Healthscope's original officer

put forward more than three

weeks ago. Sigma failed to

lodge a knockout bid which Healthscope given the

opportunity to respond which it

did tonight by putting the

extra dollar on the table.

Robert Cooke says the new

Healthscope offer is superior not just on price but because

it avoids a $10 million break fee payable if Healthscope had

lost the bidding. The winning

consortium will gain control of

all five of Symbion's businesses including the

consumer and pharmacy divisions

for $2.8 billion. The Australian securities exchange

is under fire for letting PBL

sell down its media assets

without consulting investors. The Shareholders' Association

says it sets a dangerous

precedent and could lead to

other companies changing

direction without shareholder

approval. And the peak

shareholder body is concerned

the trend is already emerging,

with Channel 7 recently picking

up a stake in a mining services

company. Neal Woolrich

reports. PBL's decision to

sell a controlling stake in its

media assets marks the end of

an era for the Packer family.

But shareholders are worried

that it also highlights a more

disturbing change. The growing

trend of companies to change direction without consultation.

This decision sets a precedent

for other less escrupulous

directors who might be tempted

to move from let's say dotcom

to biotech by stealth without

seeking shareholder approval

and be able to claim the PBL

case as a precedent. Under

Stock Exchange listing Rule 11

if a company makes a

significant change to its

activities then the ASX can

require the company to put the

matter to a vote. The

provision is designed to give

shareholders certainty with

their investments. Essentially

we are looking at financial

information that's been

provided to us by the company,

so we're looking at revenue,

profit, composition of assets.

We do that because we're really

limiting ourselves to the

objective information that we

can look at to determine

whether or not the particular

provisions of the listing rule

have been triggered. Eric Mayne

says the ASX won't be swayed by

subjective criteria like a

company's high-profile. He

argues that PBL had long been

shifting away from media to

focus more heavily on

gaming. So we looked at the

compositions that they bare to

the overall proportion and on

those facts as we examined them

the clear view was that they did not involve a disposal of

the main undertaking of the

main listed company's entity.

I don't think there's any

doubt about the fact that this

decision does water down

listing Rule 11 and that's

unfortunate, and leaves open

the opportunity for abuse. PBL

isn't the only company moving

away from its traditional media

base. In May the Seven Network

bought a 20% stake in a mining

services company which the ASX

again allowed to pass without a

shareholder vote. On the facts

it clearly did not apply. It

was quite a small acquisition

by 7, so it wasn't a question of looking at the application

of 11.1. There was not a significant change in the

nature, scale or the activities

of Channel 7. Eric Mayne says

the ASX's supervisory team is

frequently called upon to apply

listing Rule 11. But with the

recent spate of mergers and

acquisition on the market those

decisions are likely to subject

the market regulator to more

intense shareholder scrutiny. Meanwhile the Ten Network is

also actively pursuing growth

beyond its traditional

television business. The media

group will spend $15 million

this year on a global expansion

of its outdoor advertising

business, Eye, particularly in

the US and Europe. Financial

details of the strategy were

revealed in Ten's third-quarter

results which showed a 20% jump

in earnings. But profit is

down. The results come a day

African West decided to hold

onto its 56% stake following a

fruitless 8-month search for a

buyer. Shares in Ten closed

2.6% weaker. I spoke with

David Halliday from Macquarie

Private Wealth. David

Halliday, thanks for joining

us. It was another day of down

on the opening, but then

investors had a change of

mood? Yes, it's certainly been

the trend for the last few

days. We did open down and at

one stage we were off by 22

points. Again the buyers

seemed to return and our market

does at the moment seem

somewhat unstoppable. Any dips

are being seen as an

opportunity to buy in and

certainly value investors and

traders alike seem to be seeing

any kind of downward movement

as an opportunity to position

themselves either for the

short-term trade which we're

seeing almost on a daily basis

or indeed for a longer term

investment over the rest of

this year and into next

year. What sparked the change

of heart? Yesterday it was talk

of the Future Fund starting to

invest. More on that

today? Yeah, that certainly is

a big thing that -- theme that

seems to be running through the

market at the moment, the theory being that the Future

Fund is starting to look to

invest some of the 42 or $42

odd billion worth of cash

they've got. Obviously that's

not going to happen overnight

or in a few days or weeks. The

rumour was the Future Fund

yesterday started to step into

the market and again that was

perpetuated today. These

things keep pointing to the

fact that it looks like there

is further upside for the

market and people are using

these dips as an opportunity to

buy in. So the Future Fund's

buying, what are they buying? The theory at the

moment goes that the Future

Fund is, in fact, not buying

shares physically, they're

buying future's contracts.

That's basically an exposure to

the market's movements upwards

or downwards over the next

three, six and 12 months.

They're taking the position that to buy the stocks

physically that they might want

to own would move the price of

those stocks dramatically. In

trying to do the buying they

wanted to do they might

evaporate a lot of the returns

they hadn't planned in the

stocks they had bought just

trying to get set in those

stocks. By buying futures they

give themselves exposure to the

market without pushing prices

around too much in the

short-term. But at some point

they're going to have to jump

in and buy the physical stock? Yeah, they can. They

can do it over a slower period.

They don't have to put all the

money into the stock in one

day, week or month. They can

spend a period of time, maybe

weeks or months building a

position in the stock and using

periods of weakness to

accumulate those positions. In

doing so they're not pushing

the price around as such given

the liquidity and nature of the

way some of those companies do

trade. If we look at where the

broader market went today, were

rises pretty much across the

board? A bit mixed. We had Telstra weaker which further

supports the argument for the

Future Fund doing some buying.

That's probably one of the

shares they wouldn't look to be owning at the moment given

their large exposure to the

instalment receipts or the T3

float we had earlier on in the

piece. The big movements

seemed in the property trust

sector. Again people overcoming interest rate

concerns in the US there. We

saw Westfield up by 2.25% and

Stockland up. The energy

sector did well. The oil price

is nudging towards $70 again.

That's supporting the energy

sector. Woodside close to

12-months high, $47.50. Origin

Energy firmer. Gains across

the board, but strength in

property trusts and in the

energy sector. David Halliday,

thanks for bringing us

up-to-date. Thank you. To other

major movers now:

A new survey of business has

revealed exports are looking

west of China for new markets.

While demand from China for

natural resources is keeping

our miners busy, export of

technology, infrastructure and

other value-added goods and

services are tipping India to

become an increasingly

important trading partner.

Jeff Waters reports. If you

count Hong Kong, China is now

Australia's largest export

market. But while the Chinese

may buy the raw materials,

India is a new and promising

market for the technology used

to extract them. India may be

smaller than China but it, too,

has an emerging middle-class

with money to spend.

Australian business is catching

on. India's a happier hunting

ground for Australian exporter

now. Australian exports to

India have jumped at an annual

rate of 27% over the last five

years to make it Australia's

fastest growing trading

partner. This Australian

biscuit firm for instance called Cookie Man may have

stores across the Asia-Pacific

region but it now has 22 in

India, and its factory in Chan

eye has become one of the big

bakers. It's partly reforms and

partly demographics, unlike

some of the ageing populations

in the world, India's got a

very strong population, a good

gender balance. With a growing

middle class in India we're

seeing a lot of growth in

franchising, retail

outlets. From biscuits to

Bollywood film locations...

Australia's trade with India

may not always be conventional

but when you also count infrastructure projects,

education and services, it's

certainly growing fast and

likely to accelerate.

Shareholders in Alinta are

expected to vote in early

August on the sweetened $8

billion takeover of their

company by a Babcock & Brown

Singapore power consortium. It

will be the final chapter in

one of Australia's most

controversial battles which

began with a management buyout

proposal headed by the

company's CEO led to an outcry

of conflict of interest and

personal vitriol and a heated

battle between Australia's two

big infrastructure investors,

Macquarie Bank and Babcock &

Brown. At the centre of it all

in the beginning was Alinta's

managing director Bob Browning.

He developed the management

buyout strategy and was forced

to resign in January along with

Alinta chairman and fell

management buyout proponent

John Pynton. Less than two

weeks before he leaves

Australia to head up the US

operations at Austal Bob

Browning agreed to talk to

Lateline Business what what

happens and where he goes from here. Bob Browning, welcome to

the program. Thanks,

Ali. You're now Alabama bound

with Austal. The timing was

right, it's a timeframe we had

been considering, my wife and

I, for quite sometime. 2007

was the target zone in which we

were looking to relocate back

and ready to launch into a new career. We've not had an

opportunity to talk with you

since your plans for a

management buyout of Alinta

became public and last time we

talked at the end of last year

you were enthusiastic about

doubling the assets under

management for Alinta. When

and why did the game change for

you? What turned you from CEO

to potential purchaser of the

company? I think Alinta had

come through a very very long

process with AGL. We were

coming down the home stretch on

that deal and I think as a CEO

I began to see a change in

landscape in terms of who we

were competing with when we

were looking to acquire assets.

There was the threat of private

equity not only in terms of

competition but potential

takeover of us. When a CEO is

faced with a position of

continuing to go forward with

the existing plan or looking at

other alternatives I think it

was incumbent upon any CEO to

look at all the alternatives to

see what's best for

shareholders. Why did you think

selling the company was best

for shareholders? What we were

looking to do was actually find

a cheaper source of capital for

the company to be able to

compete more effectively with

other companies who were

looking to acquire assets. So

that source of capital was

private equity. How did you

think it was going to work? You

were CEO, you were making plans

to buy the company, plans which

would have benefited you

personally. How did you think

it was not going to be an

unseperable conflict? We worked

very carefully and very hard

through the early stages to

make sure there were no

conflicts to the best of our

ability. I'm confident there

weren't any. The work that we

were doing was really about

positioning the company for

greater growth into the

future. Greater growth,

shareholders wouldn't have had

stake in? The issue was Ali

whether or not the company was

going to exist in the long run

anyway. We were getting

signals and, in fact,

approaches about takeover. The

question becomes for a CEO in a

position like that, do you let

things just happen and continue

to ride the existing horse or

look for other horses to

ride? Don't you think that once

you want to enter the fray as a

horse in the race you have to

remove yourself as an

independent arbiter? Ie running

the company? CEOs look at

management buyouts all the time

and I didn't view it as unique

in that regard. Do you think in

retrospect you were wrong? It's

an option that everybody has to

look at. It was a difficult

decision at the time and it

didn't work out certainly as we

might have originally

envisaged. I am convinced that

shareholders have done very

very well. They will end up

with a 700% for those

individuals that originally

invested in the company 6.5

years ago. When you resigned as

CEO which was six weeks after

the board was first alerted to

the management buyout plan, you

did so. You resigned after

massive market pressure. Is

that the only thing and the only reason why you stepped

down? Well, actually the time

between which when we announced

to the market about the exist

ence of this idea and my

departure was about 48 hours.

So I moved as quickly as I

thought appropriate once it

became public. In terms of the

timing of when the board was

told about it it was six

weeks? The details around all

of that I'd really rather not

talk about and are precluded

from talking about actually. Do

you think, though, that market

pressure, was the market

wrong? I can't really speak for

the market. The market's going

to make the decision s that

they make. There's other

companies involved and. Qantas

wrupzing at the same time and

the market took a different

view on that deal. I can only

worry about what's best for

shareholders and the company

I'm running at the time. Do you

see parallels between your

position and Geoff Dixon's, I

guess the obvious difference is

he wasn't the leader of that

bid for Qantas, but his support

was crucial. Do you think

Geoff Dixon should have been

subjected to the same market

pressure as you were? I

wouldn't wish that on anybody,

Ali. I simply think that we

were in very similar positions,

though. You see double

standards? I think for some

reason the market viewed what

was going on with me as being a

slightly different approach

than Geoff's. That's all I can

really say. Do you think it was

the fact he wasn't leading the

team, did that make the

difference? He's clearly in a

senior role, very senior role in the company and was

involved, so I think our levels of involvement were probably

quite similar. So should he

have stepped down? The Qantas

board and the shareholders of

Qantas managed and thing the

way they saw fit. That's fine

by me. If you'd had your way you feel you would have been

able to stay in the role as CEO

and see the entire process through? Certainly the there

were a lot of protocols that

were set up all the way through

December and for the time that

I was there to ensure that the

con flikts didn't exist and we

worked very hard at that. I

thought that the decision for

me to leave was do it sooner

rather than later and convince

people those protocols were

viable. You wouldn't have done

it if you had had your

choice? It's hard to look back

with 20/20 hindsight and make

that decision. In the heat of

the battle I did what I thought

was right at the time. Do you thinking Australia will see

more management-led takeover

deals? You talked at the

beginning of the interview the change in the landscape, the

competition for assets. Given

the amount of private equity

money sloshing around the

markets, will we get more of these type of

takeovers? There's a high

likelihood. There's a huge

amount of money looking for a

home in the borders of Australia as well as internationally looking into Australia. I think that

private equity and the

involvement of management is

something that's

inevitable. Given the inherent

conflicts when management is

involved, do we have the right

structures to deal with

those? Every deal is a bit

different and I think that it's

incumbent upon the boards and

the management teams involved to be careful about putting in

the right protocols to make

sure there aren't conflicts of

interest and they're handled

appropriately. I think it's

incumbent upon boards to look

for the cheapest sources of

capital to compete and do

what's right for

shareholders. In essence, are

you saying to boards don't be

scared off by accusations of

conflicts, do what you think is

the best option? Absolutely,

absolutely. Did it at any point

get to you, the accusations

were flying thick and fast at

the height of this

battle? Well, I suppose having

been a CEO for six and a half

years you develop a bit of a

hide, but I'd have to say it's

been a pretty tough road over

the first few months of this

year. When you work so

tirelessly hard in focusing on

trying to drive shareholder

value to have those things end

in that way, it's

frustrating. So any

regrets? Certainly the way

things worked out aren't

exactly how we planned originally. It's an interesting thing to think back

on, that fork in the road that

we took back in October had I

not taken that, had we stayed

and course with the existing

strategy, where would things

be? I don't think shareholders

would be be enjoying the share

price they're seeing right now

and would not be getting the

value they're getting now. If a

management buyout seemed an

option to you in the future,

would you do it again? That's a

really tough question Ali, it

depend upon the situation. I

think if we're talking about

the next career that I'm headed

into, it's not on the radar

screen, I can assure you it

would not B You are off to Alabama running the US

operations and I understand

you've already been given some

pretty ambitious growth

targets? Yes, it's actually a

very exciting time for Austal.

They have successfully managed

to get short listed to compete

against another company for a

very large contract for the US

Navy building up to 55 combat

ships and it's my view that the

timing for my joining couldn't

be better. It's very exciting

for me and if the company's successful in getting that

contract it's a company-maker. Given the growth

in the US operations do you

think that Austal will remain Australian-listed? John

Rothwell and I have spoken a

loth about the role of Austal

USA and mobile versus

headquarters here, and versus what things should I be

responsible in that subsidiary.

We are clear on that and I

assure you we will stay listed

for talking to Lateline here in Australia. Thank you

Business. Thanks, Ali. Well as Bob Browning would no doubt

testify being a director here

and around the world has become

more difficult post-corporate

disasters such as Enron in the

US and HIH in this country.

But how do shareholders know if

their boards are effective?

Some of Australia's

high-profile directors have

been discussing the issue at an

Institute of Company Directors'

meeting in Sydney. Andrew

Robertson was there. Directors

have never been under more

pressure as the sudden demise of Margaret Jackson at Qantas

has demonstrated. For seven

years she was considered a

highly-successful chairman but

her performance during the

failed private equity bid

changed all that. While the

Qantas takeover dominated and

headline it's the more mundane

day-to-day performance of

companies over the long-term

which occupies the minds of

most directors and charns. We

are there for shareholders in

perpetuity, not just the

shareholder today and

consequently if we try to run

companies for the funds manager

or analyst today, with their

other short-term time horizons,

we may well get it

wrong. Getting it wrong has

seen Australian corporate history littered with boardroom

cleanouts, with directors held

accountable for mistakes which

in some cases cost billions of

dollars. A relatively recent

example is the home side and

foreign currency fiasco s at the National Australia Bank

which saw the chairman, chief

executive and other board

members shown the door. John

Story shared and stage with

AMP's Peter mason he argued and

best way to ensure success is

to effectively evaluate the

performance of the

board. There's a relationship

between how effective the board

is and the company is. It

really does run down between

board and senior management,

CEO and senior management and

flows through from

there. According to John Story,

there are four main issues that directors need to be judged

against.

Culture was an issue

repeatedly raised during the

troubles at National Australia

Bank. Crucial to the board

review process is the man or

woman who sits at the head of

the board table and that's the

chairman. The chairman is

responsible for driving the

process and ensuring its rigour

and integrity and an essential

part of that integrity is

delegating somebody to tap the

chairman on the should fer the

review reveals he or she is not

up to the job. Part of the

process should involve a report

on the job that the chairman is

doing and say the chairman of

the audit committee is the one

who should sit down with that

report and go through it with

the chairman and do the same exercise that the chairman will

be doing with the individual

directors. One chairman under

pressure is ANZ's Charles Goode

a man who's been in the job 12

years and has overseen the

departure of the very successful chief executive,

John MacFarlane. He found

support from today's

participant who is disagree

with the view that length of

tenure should determine when

directors step aside. We argue

that ashtary time limits were

misguided and ultimately

damaging. The ultimate answer

to this debate is, of course, a

board evaluation procedure. Which should reveal

when a director's time is up.

Now a look at tomorrow's

business diary: rbitrary time limits were misguided and ultimately damaging. The ultimate answer to this debate is, of course, a board evaluation procedure. Which should reveal when a director's time is up. Now a look at tomorrow's business diary:

A look at what's making news

in the business sections of

tomorrow's papers. The 'Age'

takes a look at the distinct

lack of competition in the

Coles bidding process. The 'Australian Financial Review' looks at the same story and

TPG's decision to pull out. And the 'Sydney Morning Herald'

says Deutsche Telecom may

compete with Telstra for the

right to build a fast broadband

network. That's all for

tonight. The FTSE and the Dow

are up 28 points. If you want

to review any part of the

program, you can visit our

website. You can watch the

whole show online or download

it as a vodcast. We'd love to

get your feedback.I'm Ali

Moore, goodnight.

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