John O’Neill must exit Star and Ziggy Switkowski would make a good replacement

Star Entertainment chairman John O’Neill. Picture: David Clark

IT really is astonishing that five directors of a major public company – the entire board bar one – could announce how utterly clueless and totally lacking in self-awareness they were.

The one person - the one person, arguably from across corporate Australia - that the board of the embattled Star Entertainment casino group could not appoint to succeed departed CEO Matt Bekier, even on a temporary basis, was the company’s chairman John O’Neill.

Apart from anything else, they should have not been able to appoint him, because he should have promptly already followed Bekier out the door of the boardroom and the company overall.

And yet that was exactly who the other five directors, apparently unanimously, choose to appoint – thereby not only confirming their unfitness to continue as directors of Star, but indeed to be directors of any other company.

Does it have to be pointed out to the five; apparently it does? Massive governance failures at Star in relation to possible money-laundering have been exposed at the Royal Commission-style NSW inquiry.

The exposures are already sufficient to cost Star its casino licences in NSW and Queensland, if the states played hardball; something that if it happened would utterly destroy the company and the value of its shares.

The fact that state authorities are clearly not going to trigger such a nuclear option – they did not with the far worse revelations that came out of the various inquiries into Crown – does not reduce the governance failure at Star.

Star Entertainment chairman John O’Neill. Picture: David Clark

As I argued last month, the entire board of Star has to go and be gone by the end of the year. The departures had to be led by the CEO and the chairman.

O’Neill had already overstayed his time in conventional terms - he’s been chairman for 10 years. The governance failures exposed at the inquiry made any extension untenable and incomprehensible. Except, obviously, to the five.

He certainly could not preside over the selection and appointment of the next CEO and he certainly could not preside over the board renewal process.

It appears to have been put about that Star is only copying what happened at Crown, where the chairman Helen Coonan became acting CEO when its CEO departed, albeit more reluctantly, in the same way as Bekier. The situations are in fact completely different.

Coonan was exactly the ‘replacement chairman’ that Star needs right now for O’Neill.

She took over from long-time Packer consiglieri John Alexander early in 2020, just as the fateful Bergin inquiry into Crown was getting underway. She led Crown through the various inquiries; she led the appointment of the new CEO; she started the board refresh process. It would been utterly unacceptable for Alexander to have stayed to do all that.

Crown Resorts chairman Ziggy Switkowski. Picture: John Feder/The Australian.

It is similarly utterly unacceptable – and to repeat, beyond comprehension, that the five directors can’t see the unacceptability – for Star’s similarly long-term chairman to play that Coonan role. Well, who should? Clearly none of the five existing directors, who’ve been metaphorically cowering under the board table. There is somebody who could walk straight into the board and take command. Indeed, he’s already been successfully road-tested for the job.

Well, not exactly immediately. But after April 29 when shareholders of Crown will vote, as they will, to sell the company to Blackstone. After that current Crown chairman Ziggy Switkowski could ‘return’ to Star and perform the role there that he has been doing at Crown – apart from the overseeing the sale to Blackstone bit.

He not only knows Star, having been a director of Tabcorp when Star was part of that company – before 2011 and the mess presided over by O’Neill; but having been approved by the regulators to be a director of Crown could walk straight into the Star boardroom.