Richard Goyder is a highly principled, good-natured, ethical business person whose remaining presence as the Qantas chair has become an unnecessary, value-destroying distraction.
His options are to follow his chief executive out the door or remain, knowing full well this will mean he will fill the role of dirt bag for as long as the media pile-on continues and Qantas disappoints customers.
Neither option is palatable for one of the genuine good guys of Australian business, who could not have dreamt about such a nightmare scenario.
Goyder’s public statements indicate he is choosing option two, taking one for the team, which arguably clears the space for new CEO Vanessa Hudson to work from the ground up on restoring customer confidence in the airline while maintaining continuity.
Opinion on whether this is the right choice is divided, but the balance says he should signal his departure after an appropriate time, around the November annual meeting, so it doesn’t look like he is being run out town.
The compromise position is he tells the annual meeting he will be gone by the next AGM and a replacement outside the board and industry will be found in the meantime.
Marketing guru Todd Sampson is up for re-election as director this year, along with Belinda Hutchinson.
The latter would be a good stopgap until a long-term replacement is found, but some say you need to go outside the board and the industry and choose someone of the calibre of former Mirvac boss Susan Lloyd-Hurwitz.
The market has long expected too much from boards as the ultimate responsible body for corporate snafus.
Some recent high-profile chair departures highlight the inequity of the game. The trigger for Ken Henry’s departure from NAB in early 2019 was scathing commentary from royal commissioner Ken Hayne, because Henry wasn’t deferential enough to the judge. Granted, plenty had gone wrong in NAB before that fateful day in February 2019, but that was the trigger.
At Westpac, the same year saw Lindsay Maxstead fall on his sword in the wake of computer and risk snafus which no director could be expected to be on top of.
Goyder’s hanging offence was that in the middle of a customer backlash, and in the wake of ACCC allegations Qantas was selling tickets on planes it had already cancelled, he and the board took a pay rise. Just dumb.
In June, the board knowingly approved Alan Joyce’s $16.9m stock sale in the middle of a buyback and as the company was being bombarded by ACCC section 155 discovery notices, which a highly litigious company like Qantas would have known invited regulator action.
The excuse that the questions were all about cancellations – and not ticket sales – doesn’t wash.
Last year’s extraordinary defence of Joyce as the best CEO in the country looks – 12 months later – to be at best overenthusiastic and at worst poor judgment.
Goyder’s job is to protect Qantas on behalf of shareholders, not the chief executive. The CEO reports to the board, but some say the reverse was the practice.
The trigger, if there is to be one, was the director pay rise in the wake of their role in overseeing the attempted destruction of one of Australia’s most bulletproof brands.
The corporate arrogance has surely opened the door for Virgin, which is how competition is meant to work.
Succession policy is not a one-act job. It starts when the new boss starts, but the Qantas board sat by while a range of potential contenders were allowed to leave, and demonstrably, Joyce was in the job for too long.
Goyder has made some big mistakes at Qantas. Now it’s a matter of orchestrating the best departure for the company, which is by the 2024 annual meeting.
The blame game
The PwC tax snafu is rightly focused on the firm, which appears to have breached simple confidences by using ATO briefings to help international clients.
The firm’s attempts to paint the Australian operation as the naughty child beggars belief, when it is international clients that are the beneficiaries.
Ziggy Switkowski has made clear the firm had a corporate structure in which the chief executive and not the board was running the show, and the culture was overly money-focused.
The chief executive at the time of the breach was Luke Sayers.
The client, the Australian Taxation Office, was also clearly at fault for not blowing the whistle publicly after being allegedly abused by PwC.
It’s fine to say process dictated its lack of action, but commonsense public policy dictated a high profile assault on the firm, making clear to the CEO, the board and the public the client was abused.
By standing up to PwC the ATO could have helped other departments and indeed PwC.
Pub brawl
The Endeavour drinks battle is all about its 354 hotels, which Bruce Matheson figures on BAML figures are undervalued by the market by about $1.5bn – or roughly half what he reckons they are worth.
Who better than Bill Wavish to sort it out, given he was the Woolworths chief financial officer back in 2004-05, when ALH was put together.
Dan Murphy’s and Endeavour’s other retail assets on UBS numbers trade at around 23 times earnings and account for around 60 per cent of earnings.
It’s not quite so simple, because Queensland rules limit bottle shop ownership to pubs, but Coles showed some financial engineering can work around that.
Some smart money around town is buying into Endeavour on the bet that the boardroom stoush is all around a corporate split.
Publicly Mathieson isn’t talking up the split, arguing Endeavour isn’t running the assets to their potential and keeping them together is the best way to maximise value.
The retail argument is a smokescreen – he started in pubs and wants to own more of them.
Mathieson, of course, also likes money and isn’t impressed at being diluted to about 7.5 per cent of Star and watching the Endeavour share price sink.
Reef relief
The Queensland government this week invested $10m into reef credits aimed at preserving the Great Barrier Reef, split between project developers Green Collar and Palladium.
Government backing and subsequent credit reratings should boost the reef credit market.
The Green Collar investment was split, with $3m to cut 17 tonnes of nitrogen or 175,000 credits, and around $2m to cut 3000 tonnes of sediment or 5500 credits.
The nitrogen credits work out at $175 per credit and the sediment credits at $400 a unit.
The credits are run by Brisbane-based Eco Markets Australia, which runs the independent voluntary reef credit market, and the aim is to get money into the pockets of neighbouring farmers.
‘Alarming trends’: Why this carmaker dumped EVs
Ineos Automotive – the carmaker which says it gave a home to 4WD ‘refugees’ – reveals why it has parked EVs and how it plans to win customers with big diesel and petrol engines.
No surrender: Wilson-Bolton war in its final stages
The long-running conflict between Geoff Wilson and Nick Bolton must be among the most expensive and consuming in Australian financial services in recent decades.