Fortescue Metals Group deputy chairman Mark Barnaba has opened up about his time with the Reserve Bank, sacking Ben Cousins, and working with Alan Bond and Andrew Forrest.
At a Business News’ Success and Leadership breakfast this morning, Mr Barnaba spoke on the challenges he faced in his decades-long career.
Mr Barnaba was executive assistant to Alan Bond for two years after the businessman partially funded his scholarship to study for an MBA at Harvard Business School in the mid-1980s.
However, Mr Barnaba admitted he wanted more.
“Alan Bond was only generous to me …but if I’m to be honest about the role, I was kind of a glorified bag carrier,” he said.
“In one sense, it was great training. It elevated me to look into the world, in business from a much higher level but I felt I missed some of the foundations that you have to have to really make it good.
“My view was I need to take, one, me to get to know the world better, two years wasn’t enough.
“Two, I just need to rebuild the foundations.”
His stint with Bond Corporation came to an end when the company entered liquidation.
Mr Barnaba moved to McKinsey in London and spent time in South Africa, Norway and Germany.
After coming back to Perth, Mr Barnaba set up GEM Consulting and Azure Capital with his peers, including John Poynton.
Mr Barnaba became the chair of West Coast Eagles board amid a tough time for the club after the 2006 Grand Final.
“I've been there 10 days as chair and had to terminate the contract of Ben Cousins,” he said.
“You often don’t know the magnitude of the decisions you take. Four hours later, every news channel – I’m on it giving a speech about Ben Cousins.
“Within a short period of time there was an AFL inquiry led by Justice Gillard that effectively looked at whether the club could maintain its licence.
“It was a difficult time personally, Paige was giving birth to our daughter and it was a difficult birth.”
Mr Barnaba this year finished his term on the Reserve Bank of Australia board, which he admitted had one of the most challenging boardroom discussions in his career.
“All of a sudden, a pandemic hits. Never in the history of this country have we gone through monetary and fiscal policy like we saw in that period,” he said.
“The balance sheet of the Reserve Bank going into the pandemic was about $200 billion. By the end of it, it was $600 billion.
“Fiscal policy, there was effectively a budget deficit of $150 [billion] to $200 billion.
“That combined and the speed at which it occurred meant that every week things changed and you're meant to be looking back at past data and trying to make sensible rational measure for wellbeing of Australia.”
The nation’s cash rate continues to accelerate and now sits at 4.35 per cent after the RBA increased it earlier this month.
“You face the situation of the increases rapidly and it's difficult because raising rates is just not popular,” Mr Barnaba said.
“But just because something is not popular doesn't mean it's right. The obligation of that group of people is to do what is right for the country.
“You are making decisions which don't make them popular even though that are actually central to the stability in the fabric of the Australian financial system.”
“[FMG] was started exactly 20 years gone by Andrew [Forrest]. It is still led by him as executive chairman, and he's one of the most extraordinary human beings and business leaders,” he said.
“I think it's easy to take for granted what he means to this country to have someone of his force of nature.
“It means you can’t take away from Fortescue how it is from some of the DNA of the founder.”