Richard Goyder tested the waters with Qantas shareholders, and the mood was for change

Two weeks ago, Richard Goyder was confident he had the backing of Qantas’s major shareholders. Last week, that changed.

A whirlwind round of shareholder meetings from Monday to Friday last week effectively sealed the fate of Qantas chairman Richard Goyder.

Less than two weeks ago, the feted Australian business leader was defiant in the face of calls for him to step down, telling a Senate inquiry he had the backing of a solid majority of the company’s major shareholders.

Two weeks later, and having met with many of the embattled airline’s major shareholders last week ahead of the company’s ­annual general meeting on ­November 3, the decision was made to fall on his sword.

Two other directors, Jacqueline Hey and Maxine Brenner, will precede his exit, which will come before next year’s annual meeting.

Ownership Matters director Dean Paatsch said he understood there was an “extensive round of investor consultation” last week.

“It’s pretty clear that the feedback was all about orderly ­renewal, and to give him his credit, he’s adopted that message,” Mr Paatsch said. “It’s really about a sensible approach from here on in. The worst thing that could happen from here is that the board exit, then it falls into the arms of a ­carpetbagger chairman.

“Richard doesn’t want that, nor do any of the investors. Qantas is an organisation that should be able to attract a world-class series of directors who are up for the challenge, but that will take time.”

Ownership Matters director Dean Paatsch.

Mr Paatsch said, given that time, a “Melbourne Cup field” of excellent candidates should reveal itself. He said Mr Goyder had made the hard decision to step aside, which was something he should be given credit for.

“I think you can labour on this idea that, ‘I can take responsibility for fixing problems that occurred on my watch.’

“But sometimes it goes too far, where there is a moment that, ­regardless of whether it’s fair or unfair, the perception is such that you’re standing in the way of a ­customer, staff and investor reset.

“For him to acknowledge that and also do it in a measured way, I think it’s to his great credit.

“It’s early days, but you’d have to say that the reset starts now and Richard to his great credit has actually accepted that and is up for that challenge, so good on him.”

Ownership Matters is yet to advise its clients on voting at the Qantas AGM.

Institutional Shareholder Services will issue its voting intentions to its clients, which include significant shareholder Blackrock, State Street and other major investors, within the next week or so.

Former Qantas boss Alan Joyce.

ISS Australia and New Zealand research managing director Vasili Kolesnikoff would not open the book on what they might recommend in terms of voting intentions, but ISS has ­already drawn a line in the sand, recommending against the re-election of Ms Brenner to Telstra’s board because of “material failures” in her oversight at the airline. Ms Brenner and Ms Hey will be leaving the board in February next year, after a decade in their roles.

Mr Kolesnikoff said on Wednesday that reputation, and the impact it has on one’s ability to perform effectively as a chair, was at the heart of all of the major, ­adversarial, boardroom spills in recent years.

“If you look at most of these situations where it’s happened in the past, if you go back, AMP in 2018, NAB and Westpac in 18/19, when the chairman and CEO and directors of all those companies left they were all reputational issues,” he said. “Reputational conduct, regulatory investigation around them … they’re all roughly the same thing.

“And they all have customers in the middle of it. You’ve got to read the tea leaves when you’re talking about customers.”

Mr Kolesnikoff said issues such as AMP for example ripping customers off by selling them ­insurance they did not need, or the various failings of the banks exposed through the financial services royal commission, sharpened the focus on the role of the board.

“It becomes a governance issue, an oversight issue, an action issue, and the fact that they were allowed to happen usually means that at some point in time, there has to be accountability.”

Outgoing Qantas non-executive director Jacqueline Hey.

Mr Kolesnikoff said a significant governance issue was the alignment of senior executives with shareholders and, with Mr Joyce allowed to offload a huge amount of his shares, he was no longer clearly aligned from that point.

“Now the share price is down 27 per cent and shareholders are getting more displeased every day it goes down.”

Mr Goyder, the former long-serving Wesfarmers managing director chairs the AFL, Woodside Energy and, among numerous other achievements, formerly chaired the Australian B20 – the key business advisory body to the World Economic Forum.

Qantas notched up a 9.4 per cent vote against its remuneration report at its annual general meeting in November last year.

Fury has mounted in recent months about issues such as the pending Australian Competition and Consumer Commission court case about the carrier allegedly selling seats on flights it had already cancelled.

The board’s decision to green-light former chief executive Alan Joyce cashing out $17m in stock in the midst of a string of controversies means it would not take much for the board to be hit with a 25 per cent “first-strike” protest vote at the AGM.

The airline’s defenders are few if any. Its staff on the ground and in the air are off side, customer service levels have consumers up in arms, shareholders are watching value erode and wondering how recovery might be achieved, and the carrier has even managed to get itself stuck in the middle of a political brawl over the Qatar flight slot fiasco.

Whether shareholders are assuaged by the moves, and whether they will support incumbent directors such as adman Todd Sampson and Belinda Hutchinson, as well as new CEO Vanessa Hudson, to stay on the board remains to be seen.