There is a lack of understanding about the long-term nature of doing business in Asia, according to prominent Australian director, John Thorn FAICD.
At a recent Australian Institute of Company Directors and PwC roundtable discussion on investing in Asia, one of the challenges raised was the negative and critical appraisals of Australian companies and their Asian initiatives by the Australian press.
Thorn, a NED of Salmat and Amcor, and past NED of National Australia Bank and Caltex Australia, believes the shortcomings of the press is due to a misconception regarding the long-term nature involved in maintaining a regional Asian strategy. Thorn said that investing in any emerging markets is a long-term game, with many markets in Asia having five-year plans as a minimum to the direction they wish to go.
“This has been the case for some time. If corporates wish to be in various parts of Asia and stay there in a serious way for 20 years plus, they’ve got to be there now. One issue that hinders this is economic returns; which can be made more readily in a developed country within the same time-frame.”
Markets in emerging countries have periods of significant growth and slow-downs, Thorn commented.
“Companies need to be there for the long term. What the markets want is ‘results now’ rather than developing a substantial presence. There is a conflict here, in other words, short-term results versus a strong long-term strategy.”
He adds the media is quick to criticise any shortcomings in a presence that is going to take many years to establish, rather than many months.
“The media in general takes a negative view on most things; to get them to change will not be easy. Bad news sells better than good news. How we move away from this culture will really depend on good leadership. When we get good leadership in the media, corporates or political environment, we get better outcomes. We have some good examples of large corporates going offshore, such as ANZ Bank which is making its presence felt.”
Thorn says it is essential for corporate Australia to go offshore to get growth. “We have a tiny country with 22 million people. Often our leaders think we are a very large part of the world, when in fact we are less than two per cent. However, we have an abundance of expertise, skills, and innovation within a limited market. It is critical for these skills to be taken offshore so companies can grow.”
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