The fact that Qantas chairman Richard Goyder fronted angry shareholders with ex-boss Alan Joyce’s bullish profit outlook largely intact shows the growing gulf between the airline’s operations and failure at the very top.
Booming profits, largely helped by strong demand and deep cost-cutting put in place under Joyce’s regime, now contrast against the massive 83 per cent shareholder strike delivered to Goyder and his board at the airline’s annual meeting.
Goyder had already flagged his intention to retire within 12 months. For Qantas to truly move forward, he needs to go as soon as a new chair is found. There is no need for an extended handover.
The historic Qantas vote sits just a touch below NAB’s record 88 per cent strike in 2017 after the bank also fell victim to its own hubris. This was exposed through the Hayne royal commission.
The strike against Qantas was a brutal verdict on how the board allowed the airline to set itself up for failure. Yes, it needed to be managed for survival through the Covid-19 pandemic, but it continued this mindset once the pandemic was long over. A different skill set was needed. Inside the boardroom, either Joyce had too much clout or no one was joining all the dots.
The vote was also a message that the settings of Qantas’s remuneration structures for its executives delivered the wrong outcomes, while sending tens of millions of dollars to Joyce.
In building an executive scorecard, not enough focus was given to improving customer experience, and financial punishment was barely exercised when the airline got it wrong. Reward was overwhelmingly geared to profit, and in more recent years, the retention of executives.
In delivering its clout against the Qantas remuneration report, Norges Bank, the world’s biggest sovereign wealth fund, pointed out the boardroom is at the heart of the problem: “The board is responsible for attracting the right CEO and setting appropriate remuneration,” the $US1.4 trillion Norges Bank said.
As Goyder went through the myriad of issues from a horror restart out of Covid to a failed High Court challenge against sacked staff, he acknowledged Qantas should have been more responsive and fixed things faster.
He also laid out the reasons why Qantas plans to dig in and fight the ACCC’s “ghost flight” case on points of law.
This in itself is a high-risk approach from an airline already facing a trust deficit. Inconvenienced customers allegedly sold tickets for already cancelled flights are unlikely to be swayed by Qantas technical arguments.
Goyder has committed to releasing the results of a review of Qantas’s board and governance. This is likely to be around the middle of next year. He should be aiming to be gone before then.
johnstone@theaustralian.com.au
Bega lifts on strength of dairy prices
Shares in Bega Cheese have risen 5 per cent in a week, as UBS said better commodity prices had proved a strong tailwind for one of the country’s major milk processors.
Bensons collapse adds to construction sector gloom
High-rise apartment developer Bensons Property Group is the latest victim of the nationwide crisis dogging the construction sector, entering voluntary administration on Friday.