Leadership renewal the key to rebuilding confidence in Qantas, says Richard Goyder

Qantas’ next chairman could be appointed within months as part of ‘leadership renewal’ which the airline has identified as the key to rebuilding confidence.

A new chairman will be appointed to the Qantas board within months, after “leadership renewal” was identified as the key to rebuilding confidence and trust in the airline.

Current chair Richard Goyder made the admission at the Qantas AGM, where the extent of shareholder dissatisfaction with the company was laid bare in the overwhelming vote against the company’s remuneration report.

A total of 83 per cent voted no to the executive pay report, in one of the biggest protest votes in Australian corporate history.

Only the National Australia Bank has recorded a larger “no” vote to its remuneration report, with 88.4 per cent voicing their disapproval in 2018.

The Australian Council of Superannuation Investors, whose members control 20 per cent of Qantas shares, said the vote was a “clear indication investors want greater management accountability”.

Australian Council of Superannuation Investors chief executive Louise Davidson. Picture: Aaron Francis

“The board has the discretion to reduce awards for executives – including the former CEO Alan Joyce, and today’s vote is a clear signal that the board should apply that discretion judiciously,” ACSI chief executive Louise Davidson said.

Mr Goyder said the resounding result reflected the broader frustration of shareholders in response to the High Court ruling on the illegal outsourcing case, and the Australian Competition and Consumer Commission lawsuit over the sale of tickets on cancelled flights.

He acknowledged both were serious issues in their own right and the board would learn from what occurred.

“The board has commenced a process of independently reviewing key governance matters over the past 12 months and will share outcomes by the middle of next year,” Mr Goyder said.

“While there is important context for each issue, we know that leadership renewal is an important part of restoring confidence.”

As well as the promotion of Vanessa Hudson to chief executive, Mr Goyder pointed to previously announced board changes, including his own departure next November.

Asked about a replacement, Mr Goyder said the new chairman was required by law to be Australian, and would need to spend some time on the board to understand the complexities of the airline business.

The remarks suggested the next chairman would be appointed as soon as February as a replacement for either Maxine Brenner or Jacqueline Hey who are due to exit then.

Ms Davidson said ACSI supported the board’s push to reset company culture and governance, and to regain the trust of the Australian public.

“We look forward to working with the company as the new board develops and executes a plan to rebuild value and reputation,” she said.

A milder protest vote was made against director Todd Sampson, who was re-elected with 66 per cent of shareholders’ support.

The vote was considerably lower than that for other directors, including Belinda Hutchinson who was reappointed with 92 per cent support.

Qantas director Todd Sampson was re-elected to the board. Picture: Luis Ascui

Ms Davidson noted that typically the average vote against directors of ASX 200 companies was 4 per cent, which made Mr Sampson’s 34 per cent “no” vote significant.

“It sends a strong message on accountability,” she said.

A wide range of questions were put to the AGM, covering the unlawful outsourcing, Mr Joyce’s $17m share sell-off, disability access, the transport of pets, and directors’ experience of “economy class” on international routes.

Tony Tyler was the only director to admit to travelling in economy on an international flight in the past 12 months, while others on the board were urged to do the same.

On the thorny topic of remuneration, Mr Goyder revealed short-term executive bonuses would continue to be “withheld” until the company learned the financial cost of the ACCC lawsuit, and compensation for almost 1700 ground-handling workers.

The final “theme” of questions was the share price plunge in recent months, which Mr Goyder said was not dissimilar to what other airlines worldwide had experienced.

“Globally airlines’ shares have fallen between 20 and 30 per cent over recent months as oil prices have risen to recent highs,” he said.

In her first AGM address as Qantas CEO Ms Hudson reiterated her apology for the company’s poor performance and service.

She said she was determined to make Qantas one of the most trusted brands in the country again, and outlined how the company was investing in its people and customers to improve the service provided.

Ms Hudson said a number of changes had already been made, including the removal of an expiry date for Covid-19 travel credits which had come down from $570m, to $520m since August.

Call centres were also being reviewed, with the view to bringing “more of this important task back onshore”.

Her involvement in a long-term incentive plan was approved by shareholders, along with her appointment to the board of directors.

The Qantas share price improved just over 2 per cent on Friday closing up 11c at $5.19, the highest in more than a month.