Senate turns CEO flogging into Olympic sport

Instead, the Woolworths boss repeated the mantra (at least ten times) that this was not a measure that the company was focused on – and that it preferred to use return on investment, or total shareholder return.


The debate reached farcical levels when McKim threatened to hold Banducci in contempt and brandished a potential jail term of six months.

“We are not interested in your PR [public relations] spin and bullshitting your way through the committee”, McKim growled.

Ultimately, Banducci was bulldozed into saying that he didn’t know the answer to the question. That itself stretches the bounds of audience credulity. (This is assuming that Banducci knows how to search Google or even ask his finance team.)

Banducci has a bit of recent form on poorly handling being interviewed. He walked out of a Four Corners interview a few months back because the cameras continued to roll after he fluffed the answer to a question.

In Tuesday’s Senate inquiry, Banducci was in a particularly unhelpful position because McKim was chairing the Senate committee into supermarket prices, so he had control of the microphone.

It begs the question: Where were those teams of highly paid advisers brought in by Woolworths to oversee its public relations around the various supermarket inquiries currently on foot?

Maybe Banducci, who has already announced he will soon retire, was taking one for the team, or maybe he thought the broader audience couldn’t appreciate why return on equity wasn’t a particularly illustrative metric to use for performance, or was simply difficult to justify.

Banducci’s rival at Coles Leah Weckert, who stepped into the already bloodied arena after him, was a quick study in what to do.

Having witnessed Banducci’s fiasco, she immediately provided McKim with the answer (which was 31 per cent for Coles) and went on to give him a little lesson in finance – explaining that banks, for example, are required to hold higher levels of equity (which remember is the denominator in return on equity), and thus have lower return on that equity.

“I would highlight that equity is a historical number, so it is actually quite difficult to compare return on equities across business,” she advised.

To make her point easier to understand, she used the property market.

“If you bought a house 30 years ago, the equity on that would be much lower than if you bought a house ten years ago,” she explained.


In the space of a couple of minutes she effectively blunted McKim’s attack, on this issue at least.

These segues and diversions hoovered up the precious time the committee had with the respective supermarket chiefs to answer the really important questions of whether a dearth of competition means the supermarket industry is feeding into the cost-of-living strains felt by many Australians.

Not getting sidetracked on financial terminology would have allowed the Senate committee more time to delve into the reasons some small supermarket suppliers – like Hawkesbury mushroom growers, zucchini farmers from the Atherton Tablelands or Tasmanian cherry producers – feel that they get a raw deal from Woolworths and Coles.

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  • Source of information and images “brisbanetimes”

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