Johannesburg - The events leading up to the resignation of FirstRand non-executive director Mac Maharaj would not result in the firm reviewing its corporate governance practices.

The group would, however, be more careful in checking directors' interests if those directors came from the government, chairman GT Ferreira said yesterday.

Ferreira said the direct cost of its independent inquiry was about R1 million but, more importantly, it had resulted in negative publicity and had taken up a great deal of executives' time, "not to mention the opportunity cost".

Maharaj resigned yesterday. FirstRand will pay him R1.09 million, comprising pay in lieu of notice, leave pay and a pro rata bonus for the year to June 30.

He was officially appointed to the FirstRand board on September 17 1999, a few months after leaving his post as transport minister. According to FirstRand's last annual report, Maharaj holds no shares. He was paid R54 000 in 2001 and R1.06 million in 2002, making him FirstRand's most highly paid non-executive director. Of the five board meetings in 2002, he missed two.

Ferreira said Maharaj was first introduced to the group by Wendy Lucas-Bull, the head of retail banking at First National Bank, through their joint involvement in Business Against Crime.

"She said he would be a good director. We made enquiries and found he was capable ... had been a good minister so we appointed him non-executive director."

Maharaj had been paid more than other directors because he performed a range of functions, to the extent that the Myburgh commission on corporate governance in the financial services sector had recommended Maharaj be redefined as an executive director.

Maharaj had sat on three statutory boards and four advisory boards. He sat on FirstRand's retail executive committee and its corporate executive committee.

He had also been "intimately" involved in Discovery Health's medical scheme dispute and Lucas-Bull used Maharaj's services to expand into the unbanked sector.

Ferreira said there would always be conflicts of interest in business, especially regarding board appointments, but FirstRand followed established rules and legislation in business to properly manage those conflicts.

With acknowledgements to Edward West, Wiseman Khuzwayo and the Business Report.