 NAB's problems run deep, critics say |
A boardroom battle is in full swing at National Australia Bank (NAB), where a rebellious director is refusing to quit in the aftermath of a trading scandal. NAB last week asked shareholders to oust Catherine Walter, who chaired the bank's audit committee.
Ms Walter claims she is being made a scapegoat for 252m Australian dollars (�104m; $188m) in losses on unauthorised foreign exchange trades.
The affair has already cost the jobs of senior executives at the bank.
But Ms Walter has rejected calls to resign, saying that she will step down only if the rest of the board follows suit.
Overstepping the line
The row has proved embarrassing for NAB's new management team, who had hoped to draw a line under the rogue-trading controversy.
Three top managers and five traders have been removed, after recommendations in a report from consultants PricewaterhouseCoopers.
Ms Walter was deposed from the audit committee after the PwC report, but has argued that agreeing to go meekly would be a tacit admission of guilt.
Chairman Graham Kraehe, who was promoted from the bank's risk committee to lead the new management team, called for shareholders to force her out after she reportedly criticised the notionally independent PwC report.
Cultural crisis
NAB's lawyers are currently examining Ms Walter's proposals, which are not yet assured of being voted on by shareholders.
But her stand has tapped into mounting discontent with the company's apparently smooth transition from the trading scandal.
Dissent has focused on Mr Kraehe, who many feel is at least as responsible for the losses as Ms Walter.
Australia's financial regulator last week identified a fault in the culture of NAB, which it argued was pursuing profit at the expense of ethical checks and balances.
Pros and cons
Institutional investors have trodden carefully around the affair; as the country's biggest bank, NAB wields considerable influence in financial circles.
Some are starting cautiously to back Ms Walter's position, however.
"I am not 100% convinced that the board that's in place is necessarily so much for the better," said Peter Morgan, fund manager at 452 Capital.
"I hope the board does consider her proposed resolution."
Others, meanwhile, say the affair is nothing more than a local struggle for influence, an expensive distraction from the real business of getting NAB back on track.
One-Minute World News 
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