Launceston Town Hall, Governance, Management & Accountability

'Lax' IOOF management accused of misleading board

OR IT COULD BE

Launceston City Council confuses management and governance roles with undesirable outcomes

Just when you think that what's going on in your patch is outrageous and those who should know better are shouting out "go away nothing to see here" articles like this turn up in the press. Even when, as is the case in Launceston, the 'masthead press' owns and runs your local rag we do not seem to have editors who can join dots and alert the punters to what's going on in the world to their cost. 

Yes of course, its acknowledged there are some other strange dynamics in play.

Anyone not gleaning their NEWS from TV will have missed 'His Honour' deal with the string of recalcitrant operatives dragged kicking and screaming before him will have missed what's likely to turn out to be a 'benchmark inquiry' in action. His Honour's body language does a goodly amount of the communicating an its very effective communication. There's a lot more that can be said BUT enough for now.

Please find some time to read this article, think back over say the last decade at Launceston's Town Hall, compare and contrast LCC behaviours and IOOF behaviours, and think about it as you research how you will vote in the local government election in Lonnie!

CLICK HERE TO READ ONLINE @ SMH: ...The prudential regulator has blasted financial heavyweight IOOF, accusing the company's management of misleading its board while the board itself was reluctant to tackle governance issues or properly document its meetings. ............. The documents, dating from March 2016 to June 2017 and recently released by the Hayne royal commission, show the Australian Prudential Regulation Authority (APRA) were also concerned about the quality of IOOF's board minutes, saying its chairman George Venardos believed detailing full discussion in board minutes could "get an organisation into trouble should litigation later arise". ............ APRA was also concerned about the fitness of the board's directors "given the apparent unwillingness of IOOF directors, in particular the chair of the board, to recognise and address ongoing prudential issues", according to a memo from the regulator about its prudential review into the group from June 2017. ............ The release of the documents comes after a bruising experience at the royal commission for the wealth manager, which as at June 30 had total funds under management and advice of $125.9 billion. The royal commission's interim report relating to the first four rounds of hearings is expected to be tabled in parliament on Friday. ............ IOOF was slammed in preliminary findings handed down by the commission in August over its decision to compensate investors in its Questor Cash Management Trust fund with their own money and for preferencing shareholders over superannuation members. IOOF also came under fire over its incomplete and handwritten board minutes during the hearings. ............ The preliminary finding by the commission also scorched IOOF chief executive Chris Kelaher, saying he lacked insight why IOOF's conduct was problematic and "the fundamental obligations of a trustee and the directors of a trustee". ............ The company rejected the preliminary findings, saying it understood its legal duties and again pointing to its argument that it passed the "pub test" because investors who lost money in the Questor CMT had been made good. ............ APRA began a prudential review of IOOF in 2015 following an investigation by Fairfax Media that revealed the group was riddled with serious governance issues including a lack of conflict management, allegations of insider trading by a staff member, front-running, misrepresentation of performance figures, and cheating on compliance exams by senior staff. ............ The investigation also showed IOOF's research department plagiarising research reports by investment banks including JPMorgan while also changing the overall recommendations on the notes. It took no action against the group. ............ In September, APRA said it would re-open its investigations into IOOF in a submission to the royal commission following concerns the regulator had gone soft on the wealth manager. ............ A March 2016 document tendered by APRA to the commission titled "note for file" details APRA's concerns about IOOF's culture including management potentially misleading the company's board. ............ Management are not always challenged by the board, and appear to make decisions on behalf of the board ... APRA document ............ "Management are not always challenged by the board, and appear to make decisions on behalf of the board, or alternatively frame the information going to the board in a biased way," the document states. ............ "Culture towards compliance with prudential standards has been lax with a possible lack of superannuation knowledge within the business." ............ The same document shows IOOF claiming "we had recognised problems with research prior to media report, and had planned to appoint the head of SFG research in replace of Peter Hilton". ............ Mr Hilton was the head of research at IOOF at the time of Fairfax Media's investigation, which revealed he had received two final warnings while the head of research at the group. The commission also released a memorandum from June 14, 2017 to APRA's general manager specialised institutions division, Stephen Glenfield, detailing the regulator's observations and concerns during it prudential review by IOOF. ............ The seven-page report shows APRA had considered the fitness of IOOF's directors "given the apparent unwillingness of IOOF directors, in particular the chair of the board, to recognise and address ongoing prudential issues arising from the recognition and management of conflicts of interest". ............ IOOF and Mr Venardos, who was a director of Ardent during the Dreamworld tragedy and was appointed IOOF chairman in November 2016 replacing then chairman Roger Sexton, did not respond to Fairfax Media's inquiries. .............. IOOF is in the process of buying ANZ's OnePath pensions and investments business.