Ignorance no defence for Qantas chairman Richard Goyder

Richard Goyder will step aside as Qantas chairman next month. Picture: Getty Images

Richard Goyder still has some explaining to do.

The outgoing Qantas chairman wanted to stick around until the reports he commissioned were made public. They largely implied the failings at Qantas were basically Alan Joyce’s fault and that the board should have trusted him less. After all, Goyder has a full dance card entertaining the super elite of the business and political worlds this Saturday at the 70th birthday bash of Woodside – a company he still chairs – making it perfect timing to show he righted the ship at Qantas before leaving.

But it’s a charade.

Goyder was the chairman of Qantas through the failures of the company.

Throughout the seas of lost bags, throughout the ten-hour waits for customer service, throughout the record cancellations, the illegal firing of its baggage handlers, and while it sold tickets for flights that had already been cancelled. It was solely Goyder’s decision to allow then-chief executive Joyce to sell $17m of his own Qantas shares when the airline held market-sensitive information that it was being investigated for selling tickets on ghost flights.

For some seasoned investors who remember Goyder’s reign at Wesfarmers, such a misstep is no surprise. Many described his peak-market acquisition of Coles as among the worst takeovers of an Australian ­company.

“While there were no findings of deliberate wrongdoing, mistakes were made and, as the Governance Review has highlighted, in some cases, the responses of the board and management were a contributing factor,” wrote Goyder and incoming Qantas chairman John Mullen in their foreword to the independent report.

Goyder commissioned Colin Carter to report on the $11.1m Joyce was set to receive in bonuses and Tom Saar to report on governance during the crisis – and the results were revealing.

Sorry, just kidding. The results said nothing much.

Following the remuneration report, Joyce had $9.3m of his bonus at risk cut for the 2023 financial year.

That fact was proudly revealed. Not so much the fact he retains $14.9m for that year, plus about $6m in long-term bonuses that may pay out in less than two years.

That means he’s still been paid just north of $160m during his 15 year reign.

As for the report by Saar on governance, at least it does address the controversial sale of shares by Joyce, but it does not explain who approved it and why.

The answer is Goyder approved it. There is no explanation of why it was deemed appropriate given the then-undisclosed investigation into the ghost flights.

In May, current CEO Vanessa Hudson agreed to pay more than $120m in refunds and fines for the ghost flight saga.

“We once again apologise for those times where we got it wrong,” wrote Goyder and Mullen in their foreword to the report.

A sort of mea culpa at best from Goyder. Mullen was not on the board for any of these ­problems.

But the report then lays the blame on Joyce, with the board’s biggest issue being “too much deference to a long-tenured CEO … with “top-down leadership with a dominant and trusted CEO leading to insufficient listening and low speak up.”

It says the “board had limited visibility or appreciation of this cultural characteristic”.

In other words, the board wasn’t really aware what was going on while it was handing out multimillion-dollar pay cheques to its boss.

While Joyce as the CEO is to blame, the role of a board is to make sure the CEO is on track and if not, to do something about it.

The Saar report brings up valid points about the disconnect between the board and staff and stakeholders.

It talks about the fact that there was too much focus on the financial rather than the “non-financial”.

But it does not address the strategic fail that comes from letting staff and customers down.

The role of the board, of which Goyder was is in charge, is put succinctly by the Australian Institute of Company Directors:

“The board is responsible for the overall governance, management and strategic direction of the organisation and for delivering accountable corporate performance in accordance with the organisation’s goals and objectives.”

On these measures the Qantas board failed too.

This report will likely lead to improvements in the Qantas board, though in no small measure this is because of the much needed turnover.

For Goyder, who on Thursday said he will leave next month, hubris abounds.