Thomas White Global Investing
Global Players

Global Players

June 2012

Gail Kelly, CEO, Westpac

Image Credit: Westpac

Image Credit: Westpac

In 1990, it was a typical day of interviewing candidates for the position of senior HR executive at South Africa’s Nedcor Bank. Until Gail Kelly, mother of infant triplets and a toddler, walked in that is.

That day, the toddler was at pre-school, and one of the triplets stayed with grandma. But the second infant was handed to the personal assistant of the interviewer, and the third attended the interview, sleeping on Gail’s lap. Kelly not only got the job but also convinced her future boss to hold the full-time position open for her for the next seven months, until her babies were at least a year old.

It must have been clear to the interviewer what is evident to the world today — Gail Kelly, CEO of Australia’s Westpac Banking Corporation Ltd. and arguably the country’s most powerful businesswoman, is tough, talented, fiercely ambitious, and a lady that can get things done.

Kelly heads the Westpac Group, Australia’s second largest bank and one that serves around 12 million customers, employs 40,000 people, and has more than 1,200 branches. For the financial year until September 2011, the group earned a net profit of AUD6.99 billion ($6.82 billion), with global assets of AUD670 billion ($653 billion), and it had a 20% share of the home lending and deposits market of Australia. In 2008, months after becoming CEO of Westpac, Kelly oversaw Australia’s biggest financial services merger when Westpac took over St. George’s Bank, her old employer, where she had already achieved the distinction of being Australia’s first woman CEO of a major banking institution. The AUD15 billion ($14.6 billion) takeover turned Westpac into the country’s second-biggest bank and a lending giant, although Kelly was criticized for the price of the acquisition as well as the subsequent underperformance of St. George’s Bank as a Westpac unit.

But making tough decisions are as much a part of Kelly’s DNA as her love for brightly colored suits. Widely hailed as the human face of banking by the Australian media, Kelly’s breathtaking rise to the top of the ladder might be the stuff of corporate lore. But she did not reach there overnight. A native South African, this mother of four began her journey quite literally from the bottom rung. Kelly was born to English-origin parents in Pretoria in 1956. Sent to an Anglican school, she excelled in studies and went on to read Latin and modern history at the University of Cape Town, where she met and married Allan Kelly.

In 1977, after completing their degrees, the couple moved to Rhodesia (today’s Zimbabwe) where she headed the Latin department of a private school, Falcon College, while Allan joined the army as part of his compulsory military service. Once Allan was out of the army in 1978, the couple moved back to Johannesburg in South Africa, where Allan joined the University of Witwatersrand to study medicine and Gail began teaching history at a government school.

She was 22, married to the man she loved, and had a decent job, but Gail Kelly was anything but happy. Her unhappiness struck home when one day, she scolded a little boy in school for leaving behind a sweater and felt ashamed later about taking out her frustrations on a child. In many interviews and public speeches, she has spoken of this incident as a seminal moment in her life, when she became aware of how important it is to love your work.

Once she realized this truth, Kelly did not sit tight and daydream. Instead, she got her father to introduce her to a friend of his at Nedcor Bank, where she eventually began her banking career as a teller in 1980. From the beginning, her leadership skills, honed during her time as a teacher, were evident. What’s more, Kelly had pleasant manners, a feisty attitude, and now-legendary persuasive skills, attributes that impressed her bosses so much that they fast tracked her career at the bank. But not one to be complacent, Kelly took a sabbatical in 1986, while pregnant with her first child, and completed her MBA.

I don’t waste time. I move. I finish things. I don’t try and do things to the nth degree. I know what’s important and what’s not. I’ve really learned that. That’s a judgement I’ve learned, what really matters.

— Gail Kelly, in an interview to The Age

Nonetheless, it was 10 years and four children later that, worried about the situation in post-apartheid South Africa, the Kellys decided to migrate to Australia. And there, Down Under, Gail Kelly’s talents and ambition began to flower in right earnest. She began her career in this new environment as general manager of strategic marketing at the Commonwealth Bank, but rose quickly to head its customer service division. However, Kelly’s big break came in 2002 when she became CEO of St. George’s Bank, the first woman to head a bank in Australia.

Her reputation as an energetic, hands-on leader with an innate ability to get work done was solidified when she revamped the bank and consciously made it customer-centric. She is even rumored to have personally answered customer complaint emails. Kelly’s methods were so successful and, under her, St. George’s Bank became so profitable for its size that it became a big takeover target. It was these very skills that got her the Westpac CEO’s job in 2007.

Still, Kelly has faced her fair share of roadblocks at Westpac. Her critics believe that under her influence, the company overpaid for St. George’s, though the move itself made Westpac the country’s second biggest bank. Moreover, St. George’s Bank has not met market expectations after the merger, which has diminished Kelly’s halo a bit. She also faced a barrage of criticism during the global financial crisis as she raised lending rates by 45 basis points — almost double the hike in central bank rates. But Kelly continues to make brave decisions and is already mulling measures to counter the negative effects of the merger. She wants to focus on cost-cutting and the restructuring of existing facilities to improve St. George’s residential lending business, which has been underperforming following the merger.

The challenges and the flak have neither dented Kelly’s determination nor reduced her clout in the world of Australian banking. The businesswoman has been featured on Forbes’ power-women lists many times, and Kelly herself has declared time and again that she is willing to face any challenge her job might throw at her. A great advocate of work-life balance, which is an important tenet in the Australian way of life, Kelly has reiterated often that successful banking is not just about making wise corporate decisions but also about ensuring the personal touch.

She should know. After all, Kelly succeeded in the most important interview of her life with a baby sleeping on her lap.





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