Qantas chairman Richard Goyder keeps failing boards’ toughest test

Instead, Goyder granted Joyce an unrestricted extension and failed to perceive when it was appropriate to replace the long-serving chief. Any director will inform you that this is one of the chairman's crucial responsibilities.

As reported by my coworker Kylar Loussikian, when Joyce finally made the decision at a spontaneously arranged board meeting on Sunday night, the majority of the board members were caught off guard. Maxine Brenner was on vacation, Antony Tyler was in France, and Goyder was at his residence in Perth.

It nearly had the same conclusion for Goyder earlier this year, following his identical error with departing AFL CEO McLachlan.

Goyder's inability to announce a replacement for the CEO, even after a whole year since the resignation was publicly disclosed, turned into a long and exhausting ordeal. This situation drained away the positive sentiment and eventually became a subject of mockery.

According to reports, Goyder made humorous remarks at a meeting of influential sports leaders in Adelaide. He supposedly quipped that the AFL would select a fresh CEO "by 2028". Additionally, Goyder commented on South Australian Premier Peter Malinauskas, comparing his height and attractiveness to those of AFL CEO McLachlan. Goyder suggested that Malinauskas should approach him regarding a vacancy they were trying to fill. Unfortunately, these jokes did not resonate well with numerous club presidents as they felt frustrated.

The CEO of AFL, Gillon McLachlan, and the chairman of the commission, Richard Goyder. AFL Photos.

Some people, including prominent chairman David Gonski, refer to it as "CEO takeover". Goyder hesitated to make the difficult choice of ending the tenure of a capable CEO.

Ex-National Australia Bank head honcho Ken Henry might have summed up the dynamic between a CEO and chairman most aptly (Andrew Thorburn held the position of chief executive then), during a corporate event in 2017: "Eventually, I will need to sacrifice him for the greater good."

"He must have confidence in me that when I engage in such actions, I am genuinely working in the company's best interests. Even if he may perceive it as unjust towards him on a personal level."

Geoff Wilson, the chairman of Wilson Asset Management and an experienced investor, asserts that boards occasionally overlook the fact that they are appointed by investors. Moreover, they seem to forget their role as fiduciaries, responsible for acting in the best interests of all shareholders and stakeholders.

Regrettably, there are instances when boards and directors overlook the fact that they have been chosen by the shareholders," Wilson informs BOSS. "The shareholders rely on the board to oversee matters on their behalf."

Pauline Vamos, the Chairperson of the Governance Institute of Australia, asserts that the coordination between the Chief Executive Officer (CEO) and the chair is among the most challenging to handle.

"It's challenging," she informs BOSS. "It's a distinct bond that isn't frequently talked about. You must establish a connection, yet you refrain from forming a friendship, as there are instances when you have to convey difficult messages."

The remaining members of the board are also responsible for holding the chairperson accountable in that aspect.

Vas Kolesnikoff, who holds the position of head of research at Institutional Shareholder Services, informs BOSS that investors are closely observing Goyder's actions regarding Joyce's remuneration ahead of the upcoming yearly shareholder meeting on November 3rd.

Qantas was required to reveal on Friday that Joyce has received $4.3 million worth of Qantas stocks as part of a retention scheme implemented during the COVID-19 period. Additionally, he has been granted $6.5 million as his long-term bonuses for the years 2020, 2021, and 2022, despite Qantas experiencing substantial losses totaling $6.3 billion during those years.

An advertisement that appeared in the Cambridge Post, a local newspaper in Richard Goyder's neighborhood of Peppermint Grove in Perth, was brought to attention again in Joe Aston's Rear Window columns. The advertisement was originally published in July 2009.

Kolesnikoff wonders how Joyce managed to offload $16.9 million worth of Qantas shares prior to the airline's financial outcomes and his scheduled departure in November.

"Why was he granted permission to sell an immense amount of shares?" Kolesnikoff inquires.

The primary concern brought up by the members of the directors' club is the difficulty faced by a chairman in the process of CEO succession planning.

According to the report titled "The Risky Business of CEO Succession" by chairman David Gonski, it is crucial to consider the timing of the new CEO's appointment and the departure of the previous CEO, alongside assessing the competence of the new individual.

"If you procrastinate for too long, you may jeopardize the opportunities for the next individual to succeed and tarnish the reputation of the current person in charge. Another consequence of delaying the start is that the chairman may develop a strong alliance with the CEO."

In certain instances, major calamities within companies have occurred due to a lack of harmony between the CEO and the chairman. Paradoxically, it can also pose challenges when they establish an excessively close relationship.