In a wide-ranging and thought-provoking interview, the high-profile chair of ASX-listed Qantas and Woodside Petroleum, Richard Goyder AO FAICD outlines what he is most passionate about as a director and the biggest challenges facings boards including reputational issues, activist investors, climate change risk and technology.
He also shares why he thinks leaders should comment on issues that matter to company stakeholders, how business can lead on the reconciliation issue, and why, as chair of the AFL Commission, he regrets not speaking out on the Adam Goodes racism issue sooner. Goyder is a keynote speaker in March at the Australian Governance Summit, where he will address the topic of leadership.
What are you most passionate about?
I would have to say growth and prosperity and building reputation. Reputation is a significant challenge for business. In terms of the biggest challenges for directors, the biggest challenges are poor decisions made and also reputational issues. So I think the challenge with all this is for directors not to hunker down and be very risk-averse. The challenge is actually to work out how you can get things done in a way which is high integrity and has all the right sort of values. In business, it’s about taking risks and making sure they are the right sort of risks, so it is about making sure that we can still do things rather than potentially the easier option at the moment which is to say no… to not do things. That’s because directors worry about personal risk and about their personal reputation and this is because this is the environment we are in. That to me is the big challenge.
You recently commented on activists who targeted Qantas over the transport issue. How do your boards deal with increasing activism?
We have large institutional shareholders and lots of retail shareholders, but what I object to is groups who look to use us as a megaphone for them to pursue their political ambitions. In this case, the issue was asylum seekers. The reality is that Qantas does little if any of this sort of thing (asylum seeker transport). Qantas is an iconic brand, so these people are using our brand and our AGM to get a political message over. And our AGM is for our shareholders, particularly our retail shareholders to get a chance to come once a year to come and talk to the board of management about what is going on with the company. But the AGM gets hijacked. The same thing happened at Woodside earlier last year.
So out of 18 questions at the Qantas AGM, I think 16 were on the one topic from activist shareholders, who in some instances only have one share. So they actually don’t have a real investment. It is not as if we are not taking these things seriously. But meanwhile, the retail shareholders who have a significant parcel of personal savings are just getting sidelined in the process. And that’s what I object to…I think institutional shareholders need to say to these people ‘back off. We are not going to support any of this sort of stuff. Go and find other mechanisms to pursue your political ambition’.
What are the conversations you have in the boardroom about these kinds of issues?
Some of the issues are really material for us, such as climate change and a number of other things. At Qantas and Woodside, we take climate change incredibly seriously and it takes up a significant part of our time. On issues like asylum seekers, we have to work with the Australian government which has its own contractors who do the work. This is also a significant issue for Qantas and for some of the population who object to the government policy. But what the activists are doing is just using our brand to get a stronger message over.
What are the conversations the AFL Commission is having over racism in sport?
The real reflection on the Adam Goodes thing is that we listened to too many people and just didn’t come out and say what we thought, which was that the behaviour against him was racist. We didn’t jump on it. So the reflection here is if you know what is right, enunciate where you stand and be really clear about where you stand… I think as a country we are now much better than we were but Adam’s paid a personal price and you get that sense from particular films that came out last year. So I think that’s a moment for us all to reflect and say we got this wrong and we need to make sure we don’t get it wrong again.
Qantas has demonstrated a willingness to engage on important social issues. How does your board go about determining their position and response to these types of issues?
Qantas and Woodside are both really strong on some things that we think matter. Boards have been criticized for wading into areas like same sex marriage, but I think these things have mattered for our employees. I think it also matters that if you are a leader, people want to know your views on some matters. We are not going to weigh into highly political issues unless they have a real impact on our stakeholders such as our shareholders, employees and the community. I think we have a role because business is going to be a key part of reconciliation in Australia. Business is also going to be a real leader in dealing with climate change.
More about Richard Goyder
Richard Goyder AO is the chairman of Woodside Petroleum Ltd, Qantas Airways Ltd, and the AFL Commission. He also chairs JDRF Australia, the West Australian Symphony Orchestra, and the Channel 7 Telethon Trust.
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