By Amelia McGuire and Sarah Danckert
Shareholders, their proxy advisers and governance experts are questioning the actions of the Qantas board led by veteran chairman Richard Goyder after the surprise early exit of former Qantas boss Alan Joyce on Tuesday.
Senior company figures indicated on Tuesday that the board was not expecting Joyce to retire early and was also unaware of the severity of the Australian Competition and Consumer Commission’s case against the airline group until it was disclosed to the market last Thursday.
Alan Joyce announced he would retire as Qantas CEO immediately on Tuesday. Credit: Eamon Gallagher
This has prompted a fresh round of questions about how Australia’s biggest airline business is being governed.
Corporate governance expert Helen Bird, who has advised the Australian Securities and Investments Commission, said the events of the past fortnight suggest Goyder – who also chairs the AFL and sits on the board of Woodside – may have too many other commitments to effectively govern Qantas.
“To be a chairman of a company that big requires you to theoretically be able to comb through every issue with a fine tooth comb. I’m not suggesting he’s not competent, just that he may not be doing the right thing by Qantas by staying,” the senior lecturer from Swinburne University said.
Bird also said the board should not have been surprised about the potential for Joyce to step down, or by the Federal Court action.
The spotlight is now on Richard Goyder and the rest of the Qantas board.Credit: Rhett Wyman
Goyder is not up for re-election at November’s annual general meeting as his term was extended for a three-year period in 2022. He does have the option to put himself up for re-election, but is not expected to do so.
Goyder was approached for comment. He has rejected assertions the Qantas board had not been tough enough on Joyce, instead asserting it had been appropriately challenging with strong governance.
Qantas was approached about shareholder criticism of the company but declined to comment. An airline source said Qantas disclosed the ACCC action as soon as it became aware of the case. The ACCC filed its case with the Federal Court at the same time the disclosure was released to the market.
Golding’s view
Multiple major shareholders who spoke to this masthead under the condition of anonymity said Qantas hadn’t provided adequate information on multiple occasions this year ranging from the true number of flight credits owed to customers and the ACCC investigation, as well as the circumstances of Joyce’s departure.
“Goyder is certainly culpable if it comes out he was aware of any of this but if he wasn’t his oversight isn’t good enough,” one of the institutional investors said.
Influential investment advisers Ownership Matters, ISS and the Australian Council of Superannuation Investors, have all said they are keeping a watching brief on the company’s handling of the situation and expect the board to receptively engage with shareholders over the ongoing ACCC investigation, Joyce’s remuneration package and whether the business expects further resignations.
Legal expert and former ASIC commissioner Pamela Hanrahan said the ACCC action launched against Qantas could be likened to the money-laundering saga at Westpac in 2019 which ultimately led to the resignation of chief executive officer Brian Hartzer and long-standing chairman Lindsay Maxsted in quick succession.
“Investors and the general community expect the chairman and the board to have a clear line of sight of the organisation. When there are significant governance issues at play it is rare the departures would stop with the chief executive,” the UNSW professor of commercial law and regulation said, speaking generally.
Calls for Joyce to step down ahead of schedule intensified over the past month, as allegations of undue government influence, anticompetitive practices at the airline and his colossal remuneration dominated the news cycle.
Multiple investors who spoke to this masthead under the condition of anonymity said they had not been aware of the ACCC investigation into Qantas until news broke it had launched Federal Court action on Friday.
Moody’s Investors Service vice-president Ian Chitterer said the company remained in a strong financial position despite its recent reputational headwinds.
“While at a headline level the ACCC allegations have resulted in significant negative publicity for Qantas, we expect Qantas to remain well positioned from a credit perspective.”
Moody’s recently reaffirmed Qantas’ credit rating at Baa3 and with a steady outlook.
Stockbroker Angus Aitken criticised the board’s handling of Joyce during his time at Qantas and the handling of his exit.
“If there was one key lesson from the Alan Joyce PR fiasco in recent weeks, it is that boards of directors seem to let super star chief officer have too much rope when the financial returns are strong,” the managing director of brokerage Aitken Mount Capital Partners said in an email to clients seen by this masthead.
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