SIR RALPH NORRIS

THE HIGH-FLYER

 
 

SUMMER 2016

By Brenda Ward, JUNO

As the child of a broken marriage, young Ralph Norris watched his mother working hard to provide for him and his brother. Home was a rented state house.

“It’s fair to say I didn’t understand as a youngster, that we were poor. But we were,” he says.

“My mother was very keen to make sure that we had a good education. The importance of education and hard work is the foundation of a good life that I’m very focused on.

“From that perspective, what I am today is largely due to the values that she instilled into me when I was a child.”

Head start in investing

After working for Mobil Oil, Norris moved to working as a computer programmer at ASB Bank. Working at the bank was a big influence on how he viewed money. Norris moved through the ranks, before becoming ASB’s CEO in 1991.

“I became exposed to the whole idea of savings and loans. My wife and I bought our first home when I was 22, and she was 20. It was my first exposure to owning property. 

“And the bank also had a superannuation scheme. At a reasonably young age, I had an idea of the importance of saving for old age and for home ownership.”

Norris is probably best known for his role at Air New Zealand, where he was chief executive for three and a half years, through a period of turmoil and tough decision-making. After leaving his mark at the national airline, he went back into banking, as CEO of the Commonwealth Bank of Australia (CBA).

His banking career gave Norris practical experience of a wide range of investment options. At the same time as being ASB chief executive, he ran CBA’s International Financial Services division for a while. 

“I had exposure to funds management and markets in general. Through that, I came to understand the importance of diversifying by asset class and by geography. 

“Now I have a very diversified portfolio, which is broad, and around most of the different asset classes.”

Good advice, luck, and experience

Among his investments you’ll find bonds, fixed interest, property and equities, and alternative assets, which are not previously formed as part of a traditional investment portfolio. His portfolio, across New Zealand, Australia and internationally, was constructed by his financial adviser, with diversification in mind.

“Good quality financial advice is important, to get a portfolio constructed based on your risk appetite – and the older you get, the lower the risk; because of the shorter duration you have to run and having to make up for losses over time.”

Over a lifetime of investing, Norris has experienced a few unsuccessful outcomes. 

“I made investments in start-ups, relatively moderate, as a diversification approach. But as is the case in start-ups, there are a few that are successful and many that aren’t. In retrospect, it would be nice to cherry-pick.”

He calls those riskier investments the “edge of my portfolio”. 

“They had potential, but sometimes they were too slow to get to market and somebody came up with a better idea and executed it more effectively. 

“You also have situations where you underestimate the difficulties to get to market. In many instances, there can be an element of luck.”

Today Norris uses his financial skills to steer companies and advise the government. He is the chairman of the boards of Fletcher Building and Contact Energy. He is also is a board member of the New Zealand Treasury, as well some private companies.