Politics
Is Alan Joyce the scapegoat for wider corporate ills?
Alan Joyce’s payout on his departure from Qantas has been cut by $9 million, but he will still receive around $13 million for his final year as CEO – the final instalment of his $125 million over his 15 years in the job.
The ABC’s Ian Verrender rightly asks whether he has been penalised or rewarded. As he says:
Just imagine how you'd feel if you'd just been hit with a $9.26 million penalty. For almost every single Australian, it would be a devastating prospect. It would mean a trip to the courts to declare bankruptcy, be stripped of your dignity and almost all your worldly possessions and forced to toil for years to at least partly repay some portion of the debt.
That’s not what Joyce is facing, however.
Verrender lists the worst acts of mismanagement that occurred on Joyce’s watch, including a serious breach of industrial law in sacking 1700 workers on dubious grounds, selling 8000 tickets on already-cancelled flights, and making it difficult for customers seeking rightful refunds.
The cultural and general management shortcomings that led to these poor decisions are detailed in the board’s report on Qantas’s governance review. The consultant Tom Starr of McKinsey found, in relation to corporate culture:
Leadership culture is part of the root cause dynamic that has underpinned the events under review. The Group [Qantas] had a “command and control” leadership style with centralised decisions and an experienced and dominant CEO. This contributed to a top-down culture, which impacted empowerment and a willingness to challenge or “speak up” on issues or decisions of concern except in relation to safety matters. In turn, that cultural characteristic underpinned some of the events that affected the Group’s reputation.
A better rate of climb without luggage
It found that the Board showed “too much deference” to the CEO. While the board was “financially, commercially and strategically oriented”, that orientation “should be complemented by enhanced focus on non-financial issues, employees, customers and all stakeholders”.
That’s a way of saying it was too concerned with the short-term bottom line, for in a business competing for labour and customers – the situation for all airlines – contempt for these key stakeholders will eventually send the business to the wall.
The ABC’s Kate Ainsworth reports that some other senior executives will also have their bonuses docked by up to a third: Former Qantas chief executive Alan Joyce's multi-million-dollar payout reduced by almost $10 million.The company’s 2023 Annual Report (Page 42) reveals that there were five other executives with pay in excess of $4 million.
It won’t be long before business students are studying Qantas as a case in which a company’s hard-earned reputation was trashed by a CEO whose way of working was not suited to an airline. The culture of a successful airline is necessarily one where safety is paramount and where there is respect for people with technical expertise. There is no suggestion that Qantas sacrificed passenger safety (apart from their baggage), but under Joyce’s stewardship it tried to operate a rough and tough commercial culture alongside a conservative safety culture. Such partitioning doesn’t work.
Those students will discuss the responsibility of the board, who put too much faith in the CEO. The board that inadequately supervises management and fails to drive corporate culture is an all-too common story in Australian management.
Will those students conclude that all is settled by a $9 million rebuke to the CEO and a few slaps on the wrist for other executives? Or will they consider this case in the wider context of the role of the CEO?
Joyce seems to have become the scapegoat for all the company’s ills – not that he has been treated unfairly – quite the opposite as Verrender suggests. But it is too easy in any organization to blame one person for its faults, and to consider that his or her exile solves what is really a collective problem.
This is the flip side of the CEO cult – a misplaced faith in the individual at the top of the organization hierarchy. That cult manifests itself in outrageously high CEO salaries, in CEOs taking on celebrity status, and in claims about CEOs’ superhuman powers as if everything that happens in a company does so because of the CEO, with no contribution from the other 22 999 employees in the case of Qantas.
Crispin Hull on waning populism
In last week’s roundup was an essay by Martyn Goddard, suggesting that the world has reached peak populism, and that in western democracies at least, we are on the road back to sanity.
This idea is reinforced in a post by Crispin Hull on his site, suggesting that support for populism is waning. The surge in polls since Kamala Harris became the nominated Democratic Party candidate, and the way it has flummoxed Trump and his campaigners, suggest that Trump’s populism is more fragile than it has appeared to date.
The populist is good at tapping into people’s resentment (Peter Dutton’s exquisite skill) but cannot deliver. Hull writes that:
…the populists who lever these resentments have [n]either the intention or the wherewithal to fix the causes of resentment when they attain power. Indeed, they make it worse.
Hull sees this current wave of populism as having arisen around 2016, manifest most strongly in support for Brexit and the election of Trump. He also reminds us of an earlier wave of populism, that arose around 1930, which played out in terrible ways.
Immigrants and elections
Have you ever tried to explain our preferential voting system to an American or a European? It’s a great system, in that it gives us some protection from far-right populists who do well in countries with first-past-the-post voting, but it takes some explaining. And then there’s our Senate voting system, which politics lecturers draw on to set as exam questions for advanced students.
So spare a thought for immigrants, some of whom come from countries without elections at all, or from countries where elections are so knowingly rigged that there’s not much point in anyone learning about their process. The task of participating in our political processes as an active citizen requires some learning.
Fan Yang of the University of Melbourne and Sukhmani Khorana of the University of New South Wales, write in The Conversation about their research among migrants from Asian countries, and they find that about half of those surveyed don’t understand how our voting system works.
Unsurprisingly, because of language and familiarity with national elections, migrants from India are more informed than migrants from China, but even so half of Indian migrants report that they don’t fully understand how Australian politics works.
The researchers found that “a lack of political literacy can lead people to favour candidates who share their cultural heritage while not understanding the policies the candidates stand for”.
To its credit the Australian Electoral Commission has voting information in 40 languages. But such technical information alone does not necessarily engender trust in the election system, and nor does it alert voters to some of the strategic tricks parties use to guide voters’ preferences.
For example, it is possible that in protest against what many immigrants see as an unnecessarily pro-Israel policy by the Albanese government, many immigrants may vote for a local candidate standing on a platform of support for the victims of war in Gaza. Some voters, unfamiliar with preferential voting, may assign their preferences to the Coalition, whose policies towards the war are far less sympathetic to the people of Gaza.
In a democracy almost everyone has a right to stand for election and to campaign for candidates, but it would be unfortunate, if those considering mounting campaigns for candidates sympathetic to the Palestine cause did not explain the main parties’ policies and the way preferential voting works. Otherwise, because of the idea that if Labor is bad the Coalition must be better, many may be tricked into voting against their interests.