From the Australian Olympic Committee to Weinstein there were challenges aplenty for directors in an eventful 2017. Narelle Hooper reviews the year.


    Faster, higher, stronger, is the Olympic motto which seems to apply to the Australian Olympic Committee’s (AOC) internal politics and board machinations. What started as an internal workplace battle in the AOC alleging a culture of bullying in late 2016 broke out into all out war over the 27 year reign of its president John Coates AC.

    In late 2016 Chief Executive Officer Fiona de Jong quit the organisation amid a number of bullying allegations against one of the AOC’s key executives, media director Mike Tancred.

    After a very public battle, Coates was re-elected President at the AOC's 2017 AGM, overcoming a challenge by hockey gold medallist Danni Roche who had the backing of Australian Sports Commission chair John Wylie, with a vote of 58-35.

    The AOC Executive, or governing board, ordered an independent review of the organisation's corporate culture which exposed a dysfunctional culture marked by “favouritism, unfairness and fear”. Coates and new CEO Matt Carroll agreed to implement the review’s 17 recommendations. Coates then publicly disavowed himself of any responsibility for the issues. “I’m the president, I’m not the senior leader being criticised,” he told media.

    Banks and the BEAR

    With the banking sector on the nose, the proposed new rules in the Banking Executive Accountability Regime (BEAR) to make finance executives more accountable, it must have seemed a genius acronym. Modelled on the Senior Manager Regime in the UK (with the exception of a rush job on the one week public consultation) the legislation will now await Parliament in 2018.

    Meantime, after months of growing political pressure including even the big four banks calling for it, the Federal Government announced a Royal Commission into misconduct into the banking, superannuation and financial services industry.

    It’s the breadth of the scope that might surprise directors. Closer examination of the terms of reference and its definitions shows that it will affect a broad range of entities, going well beyond the big four banks. “It will cover the nation's banks, big and small, wealth managers, superannuation providers and insurance companies,” Prime Minister Turnbull said.

    According to the terms of reference, the Royal Commission will inquire into the nature, extent and effect of misconduct by a financial services entity, including its directors, officers or employees or those acting on its behalf.

    It will include any conduct, practices or behaviours that fall below community standards and expectations as well as the use by a financial services entity of superannuation members’ retirement savings “for any purpose that does not meet community standards and expectations or is otherwise not in the best interests of members”.

    Former High Court Justice Kenneth Hayne will head the inquiry and must submit its final report by 1 February , 2019.


    Conduct is key and performance must go deeper than dividends, as Commonwealth Bank directors were forcefully reminded by shareholders at the bank’s AGM.

    In the wake of Austrac’s allegations of multiple money laundering breaches, the Commonwealth Bank board now has an independent inquiry from APRA, an ASIC investigation and a shareholder class action to navigate - and a new CEO to appoint. Commonwealth Bank chair Catherine Livingstone AO FAICD apologised to shareholders and acknowledged the ultimate collective responsibility of the board, the CEO and the group executives. The bank is funding the APRA prudential inquiry into governance, culture and accountability at CBA, which is expected to report in early 2018 and it will be front and centre for the Royal Commission.

    Guardian Youth care

    The children's care charity Guardian Youth Care collapsed in June after being denied more government funding amid accusations almost $20 million was misappropriated. In August the Australian Charities and Not-for-profits Commission (ACNC) revoked its charity status "following an investigation into the organisation's activities and operations."

    Liquidators and the government department which provided funding have demanded to examine directors in court to find out what happened to the money.


    A retail name etched into Australian history since Sidney Myer opened his first retail shop in Bendigo, Victoria in 1900, Myer has 12,500 staff, 50,000 shareholders and 1200 suppliers globally. But amidst a structural decline in the retail sector and as rising digital competition from the likes of Amazon, the board and CEO Richard Umbers have faced increasing questions about the speed and effectiveness of its five year $600 million New Myer transformation strategy.

    Myer’s refreshed board will take more skin in the game under its new chairman Garry Hounsell and is on guard for a further campaign from its hostile major shareholder Premier Investments.

    The tense standoff between the iconic retailer and its major shareholder was evident at its 2017 annual general meeting. Premier Investment’s campaign gained sufficient momentum to contribute to the first strike against the company over its remuneration.

    Premier Investments is a major supplier to Myer and also runs rival retail chains Just Group, Portmans and Peter Alexander. Its chair, longtime retailer Solomon Lew, started campaigning against the Myer board after seeing the value of its 10.8 per cent stake collapse by a third following a profit downgrade and sales slump in July.

    Premier Investments wrote to shareholders on the Myer register, calling for more retail skills on the board and proposing alternative directors.

    The Myer board rejected Premier Investment's request and accused Lew, who owns 43 per cent of Premier Investment, of seeking to control the company without paying a premium.

    Seven West Scandal

    Amidst a number of romantic hookups that caused friction in the boardroom in 2017, Kerry Stokes’ Seven West Media took top billing. An 18 month affair between married Seven West Media CEO Tim Worner and a colleague’s executive assistant, Amber Harrison, ends in an ugly court case with allegations of drug use and misappropriation of company funds. Seven West Media Chair Kerry Stokes backs his CEO, and the board concludes that allegations of misconduct had not been substantiated after receiving an independent review of the claims. Non-executive director and corporate lawyer Sheila McGregor resigned ahead of that news.

    The QBE Insurance board too has its awkward moments after CEO John Neal was slow to inform chair Marty Becker of his relationship with his PA who also worked for the board leading to a conflict of interest. Neal’s short term bonus was cut and the penalty was announced in the annual report. In September, QBE announced Neal was stepping down after a challenging five years and would be replaced by head of Australia and New Zealand operations Pat Regan.


    In March the highest ever civil penalty in corporate Australian history at the time - $45 million - was agreed to by Melbourne-based gaming giant Tabcorp in the Federal Court of Australia.

    The Federal Court found that Tabcorp had contravened the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) on 108 separate occasions between July 2010 and December 2015.

    In November, Federal Court Justice Nye Perram, released in his reasons for judgement, saying said the breaches “came about because of insufficient resourcing together with insufficient processes for consistent management oversight, assurance and operational execution.”

    While Tabcorp's board and senior management were not aware of or involved in the breaches, his Honour said "management should have done more". AUSTRAC launched the civil suit in the Federal Court in 2015 after concerns Tabcorp had not properly monitored the behaviour of its customers as required under the law.

    “Boards and senior management across all industries should take note to ensure that they are fully informed of their AML/CTF compliance,” said AUSTRAC’s chief executive at the time of the decision, Paul Jevtovic.

    Tabcorp chair Paula Dwyer said the company had significantly strengthened its risk and regulatory compliance capabilities, including better monitoring of customer transactions.It had also appointed a chief risk officer and “upweighted its capability of its risk and compliance function”.

    Tabcorp meantime had other things on its mind, with final approval of its proposed $11 billion merger with rival Tatts Group after more than a year of delays and legal setbacks, including Australian Competition and Consumer Commission opposition.

    Rising Shareholder Dissent

    One of the major themes to emerge this AGM season was been director accountability. Directors of ASX-listed companies have traditionally received around 96 per cent of votes in favour of their election. But in 2017 more shareholders showed they were prepared to vote against directors to challenge underperformance.

    The directors of a number of companies including Healthscope, Tabcorp, and Bega Cheese have had significant no votes.

    One of the highest-profile backlashes against a director was the 25 per cent ‘no’ vote opposing the re-election of Brambles veteran chairman, Stephen Johns.

    The Weinstein Effect

    Allegations of harassment, intimidation and serious forms of sexual misconduct have started in the media and entertainment industry and have spread.

    After a string of allegations against Hollywood mogul Harvey Weinstein, co-founder and now former co-chairman of The Weinstein Company, subsequently there were allegations against celebrities including actor Kevin Spacey and others.

    The issue of harassment is now a live issue for Australian companies, with the substantial coverage of allegations against former TV host of Burke’s Backyard Don Burke. Burke has denied the allegations. In December Melbourne’s Lord Mayor Councillor Robert Doyle announced he was taking leave while a sexual harassment allegation was investigated. This week, Gold Logie award winner Craig MacLachlan was accused by three ‘Rocky Horror Picture Show’ cast-mates of indecent assault and sexual harassment.

    The Weinstein scandal has shown boards what not to do when there are serious accusations of harassment against a senior organisational figure.

    To avoid the risks and harm to employees of serious misconduct and harassment, boards must shape culture and put in place policies that protect staff.

    Latest news

    This is of of your complimentary pieces of content

    This is exclusive content.

    You have reached your limit for guest contents. The content you are trying to access is exclusive for AICD members. Please become a member for unlimited access.