The Wall Street Journal-20080204-An Avid Sailor Steers NAB Out of Choppy Waters

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An Avid Sailor Steers NAB Out of Choppy Waters

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John Stewart, the 56-year-old chief executive of National Australia Bank Ltd., the country's biggest lender by assets, has overseen the bank's recovery after four rogue currency traders, aided by lax risk management and supervision at the bank, cost it the equivalent of roughly $270 million at that time. The trading losses caused NAB's profit to tumble, led to the resignation of its chief executive and much of its board, including the chairman, and ultimately put the four traders in jail.

Born in Scotland, Mr. Stewart is a former executive of Barclays Bank, the big United Kingdom bank, and chief executive of Woolwich Bank, where he started in the mailroom. Today Mr. Stewart is considered one of Australia's most influential businesspeople.

His early days at NAB were a tough time for the bank, with a wave of senior management being lost. Mr. Stewart had to address about 80 remedial actions mandated by the country's banking watchdog and mend a tattered regulatory relationship. He has been credited with changing the bank's culture and restoring its reputation, and he has returned it to profit growth.

Mr. Stewart, who last year moved to a rolling employment contract with no fixed retirement date, said in May he would stay on until a successor was found, to facilitate a "nice smooth baton pass." Mr. Stewart spoke with Rebecca Thurlow about leadership. Excerpts follow:

WSJ: You are an avid sailor. Can you draw any parallels between sailing and management?

Mr. Stewart: On sailing boats, especially a racing boat, things will happen fairly quickly. If you find out someone isn't very coordinated or isn't very strong, there is no point worrying about that. You've got to move them onto another job where they can be successful, because what is more important is the success of the team, not the success of individuals.

WSJ: What was your first job, and what did you learn from it?

Mr. Stewart: The first time I had to work was vacation jobs, which were always with a garage in Edinburgh, Scotland. I learned how you make things work, how teams have to function. You have to have leadership among those teams.

WSJ: What are the three most important aspects of a good manager?

Mr. Stewart: The most important one is people skills. You need to be prepared to employ people who are better than you, and not be afraid of that, and make sure that you are managing through other people.

Secondly, make sure you have the highest integrity. The third thing is to be a leader, not a manager. A lot of people can be managers but they aren't very effective. Leaders are people who can get great leaders around them.

I talk often about getting A-players, in the top 15%-20%. B-players are people whom you can coax to get there, C-players will never make it. Now, it is a fact of life that A-players attract other A-players. B-players see everyone as a threat and tend to employ C-players.

WSJ: What is the toughest decision you have had to take in your role as a manager?

Mr. Stewart: The toughest roles are where you have to release someone because it is the right thing for the company. But really good management and forward-thinking management stops a lot of that from happening. We have created a very open culture so that if someone isn't performing, there are discussions about it and what we can do about it, and that person is involved in them. So there are no surprises.

WSJ: What is the most satisfying management decision you have made?

Mr. Stewart: It is always about people. I have spent my career getting good people around me. I coax them, I look after them, act like a father figure. They do well and I get promoted.