Interview with Ross Greenwood

3 December

Subjects: Showing emotion, disaggregation, interest rates, white lies

GREENWOOD: Let’s go and have a chat now with Alex Malley. Alex Malley is the CEO of CPA Australia that represents accountants in industry and also across their various practices in Australia and around the world. G’day Alex, how you doing?

MALLEY: Good evening Ross, are you well?

GREENWOOD: Good thank you. I want to ask you an interesting question tonight. Emotion is important, there’s no doubt. When you see the leaders of our cricket teams and others, very emotionally charged, Phillip Hughes, all that type of thing, is it important that we see our leaders strong and stoic the whole time or is it important sometimes that they do show emotion?

MALLEY: Well Ross I think it’s important that we see them express their honest feelings and fundamentally whether those honest feelings are able to be expressed in the stoic form or whether they’re in a form that we probably recognise more easily in tears or in emotion, almost doesn’t matter, what matters is that you believe their reaction and it was interesting today at the funeral there were various people speaking and because it’s a funeral you accept what they’re saying as being how they feel but each of them expressed it with a different level of emotion but all of them you knew were talking to you and I guess that’s the key to all of that in relation to that. Are they telling you what they really feel.

GREENWOOD: And this comes down to the notion of believability when it comes to any organisation, whether it’s under stress or whether it’s sailing through good times, if there’s a believability in the management and it’s leadership from shareholders and from employees and from customers, staff, all that type of thing, this has to be the level, it’s almost a magic essence you can’t quite put your finger on as to what it is that makes people say, they’re genuine, they’re real, we’ll deal with them, we don’t think they’re quite right.

MALLEY: That’s right and a lot of that Ross comes from being comfortable, first of all in your own skin, but also sharing good news and bad news with equal confidence and I know myself, I walk into a board meeting and the way I maintain my credibility with my board is I never underestimate an issue that’s of concern and I tell them everything they need to know and more because that’s my credibility. It’s easy for anyone to go into a board room and tell them the good things, which I don’t underestimate either, I might hasten to add, but when it comes to an issue that we need to really consider I’m very very very equal handed about those issues but Ross just on the lead-in to bringing me on, your commentary around the country, I was really happy to hear you talk about that disaggregation of those results and that you’re looking at the states because Australia has been in some difficulty for some time but we get some comfort from aggregate numbers and the more we encourage and coerce in some ways and force our politicians to start talking to the disaggregation of results, we’ve got a lot of work to do and it’s about time we started to make that obvious through disaggregation.

GREENWOOD: It’s quite interesting now Alex, here’s an interesting observation that you could probably draw and that is if the Reserve Bank were setting interest rates for individual states, it could be argued that Victoria would be getting an interest rate cut, Queensland would definitely get an interest rate cut, WA, most likely, Tasmania have their interest rates zero and in New South Wales, but especially in Sydney you would see interest rates sharply higher than what they are now.

MALLEY: That’s right and if you take politics out of the comment I’m about to make and Australia had a chief executive right, so forgetting who’s in now but whoever was in, the fact is, if this was a company, the CEO would be asked a lot of questions about each of its sales areas and a business would not sit there at a boardroom and get excited or get off, to put it in a modern era, get off on its total profit, it would also be looking at who’s contributing to this business and who’s not and they either shut something down or they address the issue and too much politics in the last ten years has been about trying to prove that people can cut costs. The fact is, the only way to take your country forward or your business forward sometimes is to look at incentives to generate revenue and you can’t cut, cutting for an ongoing period does not sustain a business, getting a balance between cutting costs and inflating revenues through good incentives, is the best way forward.

GREENWOOD: It’s quite interesting when you say that. Now apropos, not of that necessarily, but on a slightly tangental sort of, if you like, question, just on the tangent of where you were, is there a moment when a chief executive should lie to their people? Now the reason I’m saying this is because I’m thinking about a husband and a wife, there are some moments when there is a, shall I say and not necessarily an out-and-out lie, but certainly there you don’t necessarily want to tell the full truth, if you understand what I mean sometimes?

MALLEY: Well, again I think it’s in the confidence of the delivery, whatever the issue might be and I’ve always been a proponent and I grew up in a small business family and I knew nothing other than my Dad rushing off to the factory at different times of the day and night if there was an issue. Of one thing I would say, depending on the size of your business, is have an independent thinker that you can go to and talk to at times when you feel you’re in fork in the road but at the end of the day people build confidence off your own confidence and part of the problem we’ve got in the country is that we have had some past glories, we know our mining sector is starting to come down which is the normal cycle of life and we’re not incentivising where the energy needs to be revisited and the innovation, I’ve said this to you before but, too many great Australian innovators end up with an American accent and you’ve got to give it to the Americans, even in the pits of despair, their entrepreneurship and their ability to lift from nowhere and put together some capital and make something happen is still second to none and it’s our only hope really of maintaining a place at the level that they’re used to.

GREENWOOD: It’s interesting stuff. We’ll get back on that idea about whether it’s okay for a leader to tell a white lie occasionally. I wonder. I think his answer was no. What do you reckon? Alex Malley is the chief executive of CPA Australia and he will be back with us of course next week. Many thanks Alex.

MALLEY: From New York next week Ross.

GREENWOOD: Well done mate