Interview: Lindsay Tanner, Non-executive Director, Suncorp

  • Lindsay Tanner reflects on political leadership, regulation, governance and media.
  • Lindsay will join at discussion on rebuilding from catastrophic governance failures at Governance Institute's National Conference on 1‒2 September in Sydney.

‘I was a classic child of the 70s, inspired by Gough Whitlam. I also spent six years at an authoritarian country boarding school. I became radicalised by that experience and developed an identification with Labor because at that point it was the driving force for social and political change in Australia.’ says Lindsay Tanner, reflecting on what drew him to a career in politics. Gough Whitlam was elected when Lindsay was in year eleven and that was a galvanising moment. But what entrenched his commitment to politics was the dismissal of the Whitlam government. Even though he did not know at the time, it became a lifelong commitment.

Many years later, after 18 years representing Melbourne in Federal Parliament, four of those as Minister for Finance and De-regulation, Lindsay left politics because it gave him little time with his family and children. During his time in office Lindsay was one among the four members of the Strategic Priorities Budget Committee along with then Prime Minister Kevin Rudd, which was credited with steering Australia through the Global Financial Crisis among other things. The transition from politics and federal office to corporate life in the financial services sector was not surprising. Lindsay is a Special Adviser to the financial advisory firm Lazard, Non-executive Director of Suncorp, and Chair of the Trustee firm Certane Group. He was also President of the Essendon Football Club from 2015 to 2020 and inaugural Vice Chancellor’s Fellow at the Victoria University, chairing the advisory board of the Mitchell Institute for Education Policy.

With this experience stretching across sectors, Lindsay’s reputation in governance is well earned. ‘There are a lot of obvious similarities — governments, private companies, sporting organisations, universities, they are all collective organisations through which human beings pursue collective endeavours. So, they are all ultimately subject to the same dynamics. And although in detail there are some obvious differences, the requirements of governance are fairly similar across the board.’

The dynamics in play in the political domain

There are of course a lot of differences for instance between the public and private sectors. And Lindsay points out, there are areas where the public sector could learn from the private sector, particularly in risk management. ‘There are certain aspects of the federal public service that are hugely positive. The quality of the leadership cohort at the very top levels, in my experience, is exceptional. So, I wouldn’t favour, a corporate style transformation. But I do think the public sector could learn from the private sector without undergoing any structural changes, and risk management is one of the areas where they could learn.’

But there are dynamics in play in the political domain now, that no organisational change will resolve. ‘The basic imperative now, that drives political behaviour, is manipulating appearances. And what that means, is that issues like risk management don’t really matter very much in practice. Because if you do have a very serious risk to manage, the odds are that even if it does really manifest itself, it will be on someone else’s watch. So, people tend not to worry about such things unfortunately.’ This Lindsay says is a deep-seated cultural issue. The only way you can change that is through political and cultural change, not just by changing structures or processes.

The question of conduct in Parliament House has several issues. One, Lindsay says, is a rather ramshackle system of governance where you end up in a position where no one is in charge. Part of that goes back to very fundamental things like protecting the independence of the parliament, making sure that the parliament is not totally under the thumb of the government and the executive. So, there are unique issues that require specific solutions in circumstances like that. There are also unique dynamics in the parliamentary arena and the work patterns that staff must endure for example that are a product of the nature of parliamentary activity. And a lot of effort needs to be undertaken to thoughtfully reform the way that, that functions. ‘People should not fall into the trap of thinking that these dynamics are accidental. They are a product of the underlying nature of the activity. Including the fact that the vast majority of the people working in political roles in Parliament House are a long way from where they live. They are away from home. That is a reality. And that is something which is a significant factor in shaping what is obviously a very problematic culture.’

Quality of regulation and regulators

When it comes to corporate regulatory and governance failures and scandals, the thing we should be conscious of Lindsay says, is that there is something of a cycle. ‘I am old enough to recall a variety of equivalent dramas and scandals going back to the 1970s. When you get people incentivised to chase market share, to chase risks, to chase short term gain, inevitably somewhere or other you are going to end up with bad behaviour. The trouble is that if you disincentivise people too much or squash them with regulation, you don’t get the dynamic market activity and innovation that drives growth and increases employment. So, there is always going to be some degree of a cyclical element to these issues. The key thing is to be constant vigilant and to ensure that regulation is robust. And that it is impartial.’

One of the things that Australians don’t appreciate, notwithstanding some of the failures that were highlighted in the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, is that by and large, our appointed regulators are of a high quality. ‘There is virtually no evidence of inappropriate behaviour, corruption or politicisation; the sorts of things that are very common in regulators around the world. These are a bunch of very able, rigorous, and genuinely committed people. They don’t always get it right. Same way that umpires in football games don’t always get it right. But we should be thankful that in overall terms we have a high-quality regulator class.’

However, in the wake of the Financial Services Royal Commission there has been discussion on whether regulation has become onerous, and governance processes consequently more complex than efficient.  As somebody who is on the board of two financial services companies, Lindsay says he can attest to the fact that the rise in the burden that regulation has brought, in terms of cost and management time, is certainly onerous. But while you can go through and find activity and rules that probably don’t make sense, the big picture is that you need very strong regulation in this sector. However, Lindsay warns, it is important for consumers to know that all the demands that get generated and inflated by media coverage and over-regulation, have a price. ‘They are ultimately paying the bill. That price comes at increased cost for organisations that are in markets selling products, and that cost has to be paid for somehow.’

Contest of ideas supplanted by the contest for laughs

Lindsay has also been a prolific writer with several essays as well as books to his credit. Including ‘Sideshow’ which he authored in 2012 after his retirement from politics. In it he wrote ‘After spending much of my life dedicated to the serious craft of politics, I have to admit that I am distressed by what it is becoming. Under siege from commercial pressures and technological innovation, the media are retreating into an entertainment frame that has little tolerance for complex social and economic issues. In turn, politicians and parties are adapting their behaviour to suit the new rules of the game — to such an extent that the contest of ideas is being supplanted by the contest for laughs.’

For most people, Lindsay points out, their only access to government, and politics is through the media. Media, he says, has a vested interest in entertaining. ‘That is just the nature of human beings. We have a deep-seated need to be entertained. Therefore, if we get information provided to us that is dull, serious, worthy, we switch off. And the people in the business of entertaining us, which are commercial businesses, they don’t want us to switch off. The result is an endless circus which occasionally touches fundamental issues and gives people a glimpse of the serious dilemmas and tensions that politicians and governments must wrestle with. But by and large it is ridiculously superficial and terribly distorted. And that is the reality that political leaders and politicians must pursue their craft in. It is just the state of our modern existence.’

However, Lindsay says, things have been a lot better in the last two years or so temporarily as we tackled the bushfires and now navigate the global pandemic. Because people are paying attention. ‘They are not watching Daniel Andrews’ press conference every day because they want to get a laugh or to be entertained or to have their emotions tweaked. They want to find out what is going on because it directly affects them. You still have the type of shock/horror reporting -vaccine will make you grow horns and develop a third arm or something. But it’s been lots better. Because you have large numbers of people tuning in to get serious information. The problem is that most of the time they are not. The only way you are going to get them interested in the political arena is to show politicians saying silly things or behaving stupidly or conducting themselves in an inflammatory way. Otherwise, they are not interested.’

In a crisis our politicians conduct themselves seriously

Reflecting on the challenges ahead for the nation Lindsay says there are too many to list. But one of the things we should take note of, despite the mistakes that have been made by different governments and governments of different political persuasion, is that people massively underestimate the degree of difficulty that these governments have been presented with by the pandemic. If you look at the totality of the picture since early 2020, Australia is an extremely well governed country. ‘Much as our political leaders will put on clown suits and do silly things from time to time because of the incentives, when faced with a crisis they conduct themselves seriously. They try incredibly hard to get it right. And when you look at our aggregate outcomes thus far, we have managed to get through huge economic challenges. Governments rallied to assist those who are most affected – not perfectly, but substantially. And the outcomes in terms of death rates, hospitalisation rates, infections rates of the virus, stand up extremely well with virtually anywhere else in the world.  That is a pretty good outcome thus far and we shouldn’t overlook that when we are getting upset about specific mistakes that have inevitably been made, and in some cases are continuing to be made with the management of the whole pandemic.’

Lindsay believes the National Cabinet is a hugely important development that he hopes will continue. ‘Having been heavily involved in the COAG processes in the past and having to administer major regulatory reform agendas, I know how ramshackle and hopeless the old arrangements were.’ Ultimately, for the National Cabinet to work, it requires a pool of goodwill that is obviously forthcoming in a period of complete crisis like a pandemic but is typically not present otherwise. The risk, Lindsay says, is that individual political leaders particularly state leaders will use a future national Cabinet process as a vehicle to push their stumps and deliberately try to wreck things or derail things because it gives them short term political benefit.

‘We need an understanding across the political class that at the end of the day, the purpose of the national cabinet is to get the maximum possible level of collaboration across the country, noting that perfect collaboration will never be possible. And that there will be arguments and disputes as much between states as between political parties. The question is to what extend political leaders come to the process with a core level of goodwill. But notwithstanding the sniping from both levels of government and both sides of politics, I am optimistic that the bar has been lifted. It will be interesting to see if we can keep it at that level.’

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