Chair of Qantas and Woodside Petroleum, Richard Goyder AO, says now is the time for boards to step it up, challenge decision-making and help management do its job.
Richard Goyder’s Woodside Petroleum office sits in the company’s new Mia Yellagonga campus on the western edge of the Perth CBD. Formerly the Emu Brewery site, it is also where Whadjuk elder Yellagonga met the Swan River Colony’s first governor, Captain James Stirling, in the 1820s.
These days, 3200 Woodside workers biometrically scan into the 32-storey, six-star green-rated head office, and, like Goyder, run their work life off a laptop. The company’s massive trove of geophysical data, going back 50 years, is stored in the cloud. Innovation partnerships with the likes of IBM and NASA are helping to guide substantial investment in automation, AI and robotics — and research into future fuels such as hydrogen.
Almost three years since the long-time Wesfarmers CEO swapped executive life for the boardroom, Goyder is loving the chance to think more about the future. He is getting deeper insight in his role on the investment committee of Evans and Partners’ Global Disruption Fund, along with CSIRO chair David Thodey AO, Suncorp director Sally Herman GAICD, Seek co-founder Paul Bassat, executive chair David Evans and director of the Center for the Digital Future at the University of Southern California, Professor Jeffrey Cole. Listed in 2017, the fund invests in companies that can disrupt existing markets or use technology to transform existing industries, from Alibaba and Amazon to Microsoft, Netflix and Salesforce.
“This whole disruption thing is fascinating,” says Goyder. “If you look at what’s going on with disruption, clearly there are significant strategic issues. These companies are growing so fast and their revenue numbers and cash flow numbers are mind-blowing in some cases. This is not a little blip, this is serious. This is why I love being a non-executive director. I’m learning all the time and I find it challenging, but invigorating.”
We listened to too many people and just didn’t come out and say what we thought — that the behaviour was racist and we should jump on it.
He says the kind of advances we’re seeing mean directors need to be across topics ranging from data science-driven improvements in safety and medical research to cybersecurity and the rapid advance of technology — and the good and the bad that comes with that.
“Technology will displace people,” he says. “You can say we’re not going to displace people, but if you don’t, you lose your competitive position and then you displace a lot more people. You have to take the opportunities that come to retrain and redeploy... I don’t think you can duck it — you have to be there. We need to make sure we’re challenging the status quo and also giving management teams the capacity to look at, and implement, strategies that may actually have a short-term consequence, but over the longer run, are going to be better for the company.”
To help directors get across the issues, Woodside recently had meetings in Houston, Texas, with briefings from the chief technology officer at IBM and also NASA, with former space shuttle commander Pamela Melroy GAICD, who is on the board of South Australian nanosatellite company Myriota.
Goyder ensures he is briefed on issues such as developments in hydrogen and other sustainable fuels. “In a sense, all it does is make you go OMG, all these things are going on we have to be aware of,” he says. “Boards are going to need to bring in new perspectives, and directors are going to need new skills. They need to bring people around the table — not necessarily as directors, but also advisers — with a diversity of technical skills and capabilities, age, as well as those with scars from decisions that didn’t go so well.”
It also means boards need to better use technology to improve how they meet and make decisions, given it is much easier to keep people informed. “In some ways, we’ve run boards as we did 30 to 40 years ago, even though technology has changed significantly in that time.”
No place for racism
On the AFL’s failure to quickly quell racist abuse of former Sydney Swans player Adam Goodes, Goyder says there’s no place for racism. “We listened to too many people and just didn’t come out and say what we thought — that the behaviour was racist and we should jump on it. The reflection is, if you know what’s right, make sure you enunciate what’s right and be really clear where you stand. We weren’t in that place.”
These events became the subject of two award winning documentaries examining racial politics, The Final Quarter, directed by Ian Darling and The Australian Dream, written by Stan Grant.
Challenges of the now
That said, being a non-executive director in 2020 is challenging, says Goyder. After the banking Royal Commission, with the damage to the standing of big business, he has a deep sense of the responsibility of doing the right thing by the companies and boards he’s involved with so they can grow and prosper. “The reputational challenge for business is significant at the moment and I’m passionate about doing the little bit I can with my colleagues to try to make good decisions in the interests of all stakeholders,” he says. “People are looking at companies and they’re saying poor decisions are being made.”
He says inertia and risk aversion are tempting responses. “As boards face increasing scrutiny of their decisions, it is vital directors don’t respond by retreating into a mindset that is so risk averse it stymies investment, innovation and creativity. The challenge is not to hunker down and become risk-averse, the challenge is to work out how you can get things done in a way that is high in integrity and has all the right sorts of values.
“The reality is, business is about taking risk, [but] you don’t take risks on things like safety. It’s about taking appropriate risk; about making sure we can still do things rather than the potentially easier option at the moment — which is to say no.”
Goyder says reputation is crucial, but the best way for a company to build its reputation is through its actions. “The role of the board is to ensure management has the time and ability to build the company sustainably, taking into account the needs of all stakeholders. The trouble is, you don’t know what you don’t know, and you’re trying to make decisions for years ahead. There are material risks and, at the end of the day, none of us is going to be able to foresee the risks, or prevent things happening. All you can do is collectively do your best to mitigate risk where it applies and get as good a management team as you can. Boards need to find a way to help management do things, rather than finding ways to stop them.”
Goyder notes growing concerns about climate are top of mind with investors. Qantas announced last November it will aim to reach net zero carbon emissions by 2050. Woodside indicated it would accelerate spending on its Scarborough and Pluto-2 LNG projects to around US$4.4b.
“We [Goyder and wife Janine] have four kids. They’re a really good sounding board on things. We also have lots of young employees.
“It becomes incumbent on us to go to policy holders and shareholders and say this is how we plan to deal with CO2 emissions,” says Goyder. “Are you on board because we don’t want you changing the rules? You have to imply a price for carbon, technology to reduce your own emissions, and abatement. Climate is a significant risk and clearly there are opportunities for companies to move faster and use technology to abate, mitigate and enhance operations. In boardrooms, it’s right at the forefront of the issues we’re dealing with. Business is just getting on with it. At the end of the day, you have to do what you perceive as the right thing.”
This whole disruption thing is fascinating... These companies are growing so fast and their revenue numbers are mind-blowing in some cases. This is not a little blip, this is serious.
Both Woodside and Qantas have been targeted by activists over various issues. “What I object to is groups who look to use us as a megaphone for them to pursue their political ambitions, in this case about asylum seekers,” says Goyder. “The reality is, Qantas does little of this, but they are using our brand and AGM to get a political message over. The AGM is for our shareholders, particularly our retail shareholders, who once a year get a chance to talk to us about what’s going on in the company. It’s easy for institutional shareholders to say why wouldn’t you support doing a study into this and that. The reality is, we do those things and institutional shareholders need to say, ‘Back off, we’re not going to support any of this sort of stuff’ — go and find other mechanisms to support your political ambitions.’
“Boards have been criticised for wading into areas such as same-sex marriage and the like... but we are not going to wade into highly political issues unless they have a real impact on our stakeholders, our shareholders, employees and the communities in which we live.”
After joining the boards of Woodside Petroleum and Qantas in 2017 Goyder has enjoyed being chair. “I’ve been a good confidante and sounding board to [Qantas CEO] Alan Joyce AC and [Woodside CEO/MD] Peter Coleman because, on a lot of things, you’ve been there and you can say, ‘Have you thought about this, have you thought about that?’ I’ve brought an understanding of the issues at board level that the CEO faces.”
His advice is for executives to reflect deeply if it is really the path for them. “Make sure it’s something you want to do. Don’t do it because it’s the next logical step. I’ve seen some people struggle because they’re used to having their hands on the tiller and doing things. You are one of a group, and boards work well when they are collaborative.”
Richard Goyder AO FAICD will give the AGS 2020 keynote address on 3 March.
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