Why CBA boss Ralph Norris is worth it

1/10/09: 'Why CBA boss Ralph Norris is worth it' - Formal, corporate, and minding his script, Commonwealth Bank CEO Ralph Norris was initially rather disappointing at a business lunch this week.

As the debate continues to rage about corporate pay, Norris – with his $9.2 million salary - has barely been out of the press.

I joined more than 500 business leaders at the Westin in Sydney to hear him speak. But the banker's character didn't shine through until the Q&A session afterwards.

I was impressed – but then I should be, if his pay packet is representative of his performance.

Should salaries be capped? Norris agrees with the Productivity Commission that capping salaries is not the answer to curbing excessive pay.

Greens leader Bob Brown wants to cap salaries at $5 million and just about everyone else has an opinion on one or the other.

Should pay be set at a multiple of the lowest paid employee in the firm? Or should it be linked to performance - successful performance that is, not rewarding those who oversee falling stock prices or even collapse and failure.

I will say that although Mr Norris’s salary (which bulged to $9.2 million from $8.6 million last year) is huge, at least I can sort of see that he might be worth a lot of money.

The bank is the biggest of the Big Four in this country, the share price hasn’t tanked and it seems he knows what he is doing – and he is committed. As for the likes of Sol Trujillo and Geoff Dixon...don’t get me started.

Mr Norris struck me as cautious, conservative and considered.

As a leader of one of the top 20 banks in the world, his messages were as relevant to us, as small business owners, as they are to any world class leader.

I have summarised his key points below – but bear in mind they are my own personal take on what I heard as a business owner.

Mr Norris claimed that the market may be looking up, thanks to government intervention. His manner, in my opinion, was nevertheless a champion of caution.

According to his analysts, the future was forecast to improve around now.

Mr Norris indicated an environment of increased regulation, tighter control and additional requirements around risk management and liquidity.

He foresaw simpler business operating models so that transparency was key. He also talked about the possible end of cheap debt.

Mr Norris' top10 tips, according to The Bullseye are:

1. Cash is good. So continue - or start - focusing now on strengthening your cash and liquidity position.

2. Risk needs to be monitored and assessed continuously so introduce more stringent risk methodologies into your operation.

3. Pricing for risk strategies will almost certainly become more important so consider it carefully.

4. Continually review cost management initiatives and have budgets in place.

5. Flexibility is key and the ability to react and adapt is essential.

6. Processes and systems are key to maximising performance.

7. Mentors and mentoring were as strongly required as ever.

8. Put good people in place around you.

9. Admit your mistakes and learn from them.

10. Lastly, an organisation needs a social conscience.

We are fortunate to have one of the strongest banking systems in the world. I’ll be bearing Mr Norris’s comments in my business planning processes in the future

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