The $ 550,000 sweet­heart deal

The Sunday Telegraph (Sydney) - - NEWS - J OHN ROLFE

Meet the mys­tery per­sonal al as­sis­tant who won the af­fec­tions of QBE boss John Neal — and cost him a hefty fine. Neal was docked $500,000 by his em­ployer for fail­ing to dis­close a per­sonal re­la­tion­ship in the work­place. The case high­lights a trend in cor­po­rate Aus­tralia to crack down on of­fice ro­mances.

THE body lan­guage of QBE boss John Neal is ob­vi­ous — Lucy O’Reilly is price­less.

Which is just as well, as the cost of fall­ing for his per­sonal as­sis­tant has been high.

And with their next stop be­ing Tiffany & Co, it’s ris­ing.

Mr Neal was docked $550,000 by QBE’s di­rec­tors for not dis­clos­ing the of­fice ro­mance quickly enough.

The board’s choice to make its de­ci­sion pub­lic has thrown a spot­light on a new trend sweep­ing cor­po­rate Aus­tralia — a rush to put in place rules cov­er­ing the dis­clo­sure of “close per­sonal re­la­tion­ships”.

Work­place lawyers ar­gue it’s sim­ply good gov­er­nance. But lead­ing re­cruiters say it is the wrong way to go. Such clauses were un­heard of two years ago, said Tim Greenall of law firm Madg­wicks.

“It’s now be­come a preva- lent trend in share­mar­ket-listed com­pa­nies,” Mr Greenall said.

The trig­ger was an un­fair dis­missal case brought by a West­pac man­ager sacked af­ter fail­ing to ’fess up about a fling with a sub­or­di­nate.

“It’s sur­pris­ing it’s taken so long to take hold,” Mr Greenall said. “But it’s a dif­fi­cult is­sue to talk about openly. It’s quite front and cen­tre now. John Neal is a high-pro­file ex­am­ple.”

Af­ter the board of the $15 bil­lion in­surance be­he­moth learnt of the re­la­tion­ship be­tween Mr Neal and Ms O’Reilly, she chose to leave the com­pany.

There is no sug­ges­tion she did any­thing wrong. Out­side the work­place they re­main in­sep­a­ra­ble — unashamedly en­gag­ing in pub­lic dis­plays of af­fec­tion.

When The Sun­day Tele­graph came across the cou­ple in Syd­ney’s CBD last week­end they en­joyed a spot of shop­ping and a lunch at the well-re­garded eatery Fratelli’s.

Home is an ex­pan­sive El­iz­a­beth Bay unit still held in the name of Mr Neal’s wife He­len, from whom the 52year-old sep­a­rated last year — be­fore the re­la­tion­ship with Ms O’Reilly be­gan.

QBE was ahead of the curve in its ap­proach to work­place ro­mances be­cause it in­cluded a close per­sonal re­la­tion­ships dis­clo­sure clause in its code of busi­ness ethics and con­duct in 2014.

It was specif­i­cally con- cerned that con­flicts of in­ter­est could arise. Mr Neal was well across the pol­icy — he penned the in­tro­duc­tion.

“It is not just what we say that mat­ters, it is what we DO,” he wrote.

Mr Neal did tell the board about his re­la­tion­ship with Ms O’Reilly. But in its view he took too long. So, in its an­nual fi­nan­cial re­sults pub­lished in Fe­bru­ary, it re­vealed it had docked him 20 per cent of what would oth­er­wise have been a $2.76 mil­lion bonus.

At the time Mr Neal told re­porters: “It’s been prop­erly dis­closed in the (re­mu­ner­a­tion) re­port. It’s a ma­te­rial amount (of money) for me, I’ve un­der­stood it, I’ve ac­cepted it, but it was not my de­ci­sion.”

And ear­lier this month, fol­low­ing the com­pany’s an­nual gen­eral meet­ing in Syd­ney, he said: “I think I did what I felt I should have done at the right time, and the board had a dif­fer­ent view.”

Madg­wicks’ Mr Greenall said: “If it’s dis­closed it can be man­aged.”

A source who has spo­ken to both Mr Neal and the board about the mat­ter said the CEO of a risk-based busi­ness could be ex­pected to err on the side of cau­tion and there­fore dis­close early rather than late.

“He told them, but not soon enough in their opin­ion,” the source said. “And the board is al­ways right.”

But lead­ing re­cruiters say per­sonal re­la­tion­ship clauses are the wrong way to go. “It’s go­ing to cre­ate more of an is­sue be­cause (work­place ro­mances) are go­ing to be kept se­cret,” Michael Page Aus­tralia manag­ing di­rec­tor Adrian Old­ham, said.

Mr Neal re­peat­edly de­clined to be in­ter­viewed or an­swer ques­tions for this story, as did QBE.

It is not just what we say that mat­ters, it is what we DO

JOHN NEAL

The pair had a suc­cess­ful day shop­ping, in­clud­ing a stopover in Tif­fany & Co.

Happy cou­ple shop­ping in Syd­ney’s lux­ury precinct. A cou­ple that cy­cles to­gether, stays to­gether. BI­CY­CLE BUILT FOR TWO

A ro­man­tic lunch at up­scale Fratelli Fresh. Pic­ture: Jenny Evans LUNCH DATES

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