Spring cleaning for QBE as it turfs Regan

Tom Ravlic

Pat Regan is no longer the chief executive officer at listed insurance company QBE as a result of ‘workplace communications’ that the board of directors of the company determined failed to meet the QBE’s benchmarks for behavioural standards.

QBE joins the AMP as a company in the financial services sector to have a ‘communications problem’ arising from the conduct of a senior executive although – unlike AMP – QBE does not have a chairman of the board moved along as a result of a promotion decision at odds with investor thinking and media campaigning.

Mike Wilkins, the chairman of the QBE board of directors, has seen this movie before at AMP when the heat was focused on AMP during the year-long, $70 million theatrical extravaganza known as the Hayne Royal Commission.

It was during the Hayne inquiry that Wilkins experienced a world of pain amid intense mdia focus on AMP’s version of the fee-for-no-service scandal and the ping-pong dynamics that went on with a Clayton Utz report. Wilkins would know a thing or two about the need to respond to these issues on a timely basis and to take the right action as soon as practically possible.

The outcome of the QBE investigation was announced in a media release issued after 8.09 on Tuesday morning. This meant that the media would feast on the personalities behind the QBE upset for a single cycle, affording the capital market time to focus on the substance of the investment case for this business: the capital strength and reinsurance arrangements as claims on credit insurance and mortgage mount, blown by Covid winds.

With Regan out, Wilkins took control as interim CEO and announced that the company was taking measures to review and improve aspects of corporate culture.

“This will commence with a board sponsored and externally supported culture review and the creation of an additional avenue for employees to safely raise concerns and receive support that will supplement existing channels,” Wilkins said.

This bears some analysis because it contrasts so much with AMP’s Pahari saga that caused the AMP to lose skin in the public domain and embarrass experienced board members, looking as if they belonged in one of the exhibits in Jurassic Park.

Board members received a report at QBE that contained adverse findings. An executive was removed and the media statement makes clear why.

QBE was in control of the narrative rather than having staff leak material to the media which, as everybody knows, results in more holes emerging in an organisation than the colander used to wash veges at my mum’s.

Twitter was on-side for once, applauding the QBE board for doing the right thing under the circumstances. Somebody at QBE will have the job of tallying up positive social media mentions at some point on this topic, a PR and investor relations award in the making.

QBE be fielding more questions about what exactly was said by Regan (and maybe also done) and in what context, to warrant the complaint and the sacking.

Stephen Mayne, shareholder activist and watcher of corporate conduct, argued on Twitter that more needed to be said regarding the dismissal.

The real question in this instance is whether less is more.

QBE’s action speaks volumes to those who have written copious columns on the behaviour of male executives in financial services in recent weeks and the unwillingness of a board to move quickly enough in another situation.

Is more detail really required in a situation where a company has done what will be acknowledged by many to be the right thing?

A social licence is hard-earned and QBE have set the standard for the financial sector.