Flat out in retirement Flat out in retirement

Sunday, 01 August 2004

Leo D'Angelo Fisher photo
Leo D'Angelo Fisher

    When Paul Rizzo unexpectedly announced he was retiring as head of the prestigious Melbourne Business School due to ill-health, it seemed that the career of one of Australia’s most respected business leaders had come to a premature halt.

    Flat out in retirement

    When Paul Rizzo unexpectedly announced he was retiring as head of the prestigious Melbourne Business School due to ill-health, it seemed that the career of one of Australia's most respected business leaders had come to a premature halt.

    But Rizzo won't disappear from the financial pages just yet. Far from it in fact, as Rizzo is setting his cap at two of Australia's most controversial boards: Telstra and National Australia Bank.

    Rizzo stepped down as professorial fellow, dean and director of Melbourne Business School in April, within days of collapsing at a family gathering. The health scare "lit a sign", he explains, convincing him to abandon the punishing regime of executive life which had shaped so much of his 40-year career. (Rizzo's collapse came at the end of a complex merger between Melbourne Business School and Mt Eliza Business School.)

    Rizzo, already a director of BlueScope Steel, law firm Mallesons Stephen Jacques and the Victorian Government's Innovation Economy Advisory Board, will be taking a measured approach to any new directorships.

    "I don't want to repeat my professional life in retirement," he says. "[Sitting on boards will be] a material, but not dominant part of my life."

    Before joining Melbourne Business School in 2001, Rizzo had been group managing director (finance and administration) of Telstra for seven years. He is also one of Australia's most experienced banking executives, with a banking career spanning 27 years. Rizzo is a former head of retail banking for Commonwealth Bank, CEO of State Bank of Victoria, and managing director of ANZ Bank in New Zealand.

    With such a pedigree, he won't have any problems filling his dance card. In any case, he is no stranger to the boardroom. He is a former chairman of Foxtel and a former director of Seven Network, IBM Global Services and N.M. Rothschild Australia, among others.

    His renewed interest in directorships comes at a volatile time in Australian corporate history. As the corporate governance debate rolls on with undiminished intensity, boards find themselves under unprecedented scrutiny.

    But Rizzo is unfazed by the prospect at a time when directors are considered fair game. He points out that as a director of BlueScope Steel - the former BHP Steel - he is chairman of the board's audit and risk committee, which places him "right in the middle of the corporate governance debate". What does concern Rizzo is the uncertainty which now surrounds the role of directors. "I believe the corporate governance debate has gone too far and become too simplistic," he says. "Community expectations [of boards] have gone up dramatically without true clarity of what's required of a company director."

    Rizzo fears that investor and wider community anger "post-Enron" has resulted in exaggerated responses to corporate failures. "The pendulum has swung to heavy-handed governance," he says. "This view that non-executive directors should micro-manage the business - that's not their role, it isn't realistic." Rizzo is also critical of the "tick-the-box view of corporate governance".

    If anything was to convince Rizzo to steer clear of boardrooms in his post-executive life, the near implosion of NAB's board in the wake of the bank's $360 million foreign exchange options trading scandal would have been it. But he is not dissuaded.

    Hoping that "the NAB experience represents the apex of the corporate governance debate", he says the biggest lesson to be drawn from the boardroom war is "just how important it is that boards sort out their differences behind close doors. [Once there is] any public showing of disharmony ... there are no winners".

    Rizzo knows the two leading protagonists of the NAB boardroom showdown: Graeme Kraehe is the chairman of BlueScope, Catherine Walter, who has resigned from the NAB board, is a director of Melbourne Business School. "They're both fine people," he says.

    He reveals that, if invited, he would accept a position on the bank's board. "I've got as wide a banking background as anyone in Australia," he says.

    More intriguing, though, is his readiness to join Telstra's board. "If I was invited, I would accept," he says. "The strategy issues and personnel are much the same as five years ago. I know [Telstra] very well. I'd consider it an honour to go back there as a director and to help in anyway I can."

    Such a return would not be without irony.

    Rizzo quit banking in 1993 to join Telstra as its chief financial officer. After charismatic CEO Frank Blount, Rizzo was the face of the new Telstra. Blount and Rizzo became one of the most formidable partnerships in corporate Australia as they steered the lumbering government-owned telco to international competitiveness and readiness for part-privatisation.

    As Blount's retirement approached, Rizzo was widely expected to succeed him as CEO. Instead, in 1999, the position went to a dark horse candidate, fellow Telstra executive Ziggy Switkowski.

    It was a blow to Rizzo, but he dismisses claims of an acrimonious relationship with his new CEO. "We remain friends, he invites me to the footy occasionally," he says. But over the next two years, Rizzo admits he and Switkowski disagreed on strategy "60 percent of the time".

    "Had I got that job I would have taken Telstra in a different strategic direction," he says.

    The growing gulf between Rizzo and Switkowski, plus a growing disenchantment with corporate life, made Rizzo very responsive to the unexpected offer to head Melbourne Business School.

    "I was not looking for anything at the time, but I was thinking about what I was going to do for the rest of my life when I got a call sounding me out," he recalls.

    One journalist described Rizzo's decision to leave Telstra for Melbourne Business School as "drastic". Rizzo disagrees: "It was just time to move on. It's a skill-set people should develop, to know when it's time to move on."

    Rizzo, who had long had misgivings about the all-consuming demands of being a corporate executive, says he first thought about working in a university environment when he was a bank executive. (During his time at the ANZ, Rizzo completed an MBA at Melbourne University and an advanced management program at Harvard Business School, sowing the seeds of his affection for academe.)

    When the opportunity came, he was 56 and ready to make the move.

    "At the back of my mind, probably for a decade ... I'd been thinking that there had to be more to one's working life than spending so much time on the treadmill. I didn't want to spend my career trapped in a stereotype. [When the idea first occurred to me] I couldn't help reflecting how many sour, cynical, totally angry and negative people there were in banking," he says.

    Such was Rizzo's high standing with markets that when he announced his resignation from Telstra in November 2000, the telco's share price slumped 5 percent.

    He is proud of his three years at Melbourne Business School, citing the recruitment of new academic and executive staff, attracting new financial supporters, attaining number-one rankings in a number of respected business-school surveys, and concluding the merger with Mt Eliza Business School, creating the largest provider of management education in the Asia-Pacific.

    At the heart of his plans for the future is a desire to spend more time with his family, crediting much of his success in business to his family life.

    "When I look back over 40 years, I was always proud that I found that work/life balance," he says. "Ours has always been a very close family, [whereas] I saw a lot of my contemporaries struggle with unsuccessful, broken relationships."

    He believes organisations need to provide better work/life balances for employees - an issue so fundamental to organisational health that boards would need to take a greater interest. "If you want to be selfish about it, a better balanced person makes a better employee," he says.

    While Rizzo looks forward to becoming more active as a director, he admits to disquiet about destructive trends in business he has watched develop over time, including a growing media tendency to sensationalise business reporting.

    "It's almost become a blood sport," he says. "Some journalists can't discern between fiction and reality. We now have maybe a dozen serious [business] commentators, but the rest of the media has picked up that business is exciting drama. I don't see that spotlight diminishing."

    He also bemoans the "unrelenting pressure from the markets for organisations to perform" over increasingly diminishing cycles.

    "I'm pleased I'm not starting my career in business now. I can only see it becoming a much more unforgiving, complicated environment," he says.

    As he prepares to cap off his distinguished career with a portfolio of directorships, he also hopes to lend his expertise to the boards of hospitals and charities, and if asked, would like to pick up the threads of his academic career by doing the odd lecture, "sharing my war stories". He also intends to play golf, travel and spend more time on his farm on Victoria's Mornington Peninsula.

    He migrated to Australia with his parents when he was six and also hopes to become more active in the Italian community.

    It seems that even in "retirement", Paul Rizzo is going to be flat out. And loving it.


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