While Alan Joyce is copping most of the grief for the provocative Qantas lock-out on Saturday, no such decision can ever be taken without full board approval.
Graham Richardson was in no doubt in The Australian yesterday that Qantas chairman Leigh Clifford is an industrial relations “ideologue” who was instrumental in the hard-line approach.
Clifford is a veteran of fighting unions from his Rio Tinto days, which included 13 years as a main board director until 2007, the past seven as global CEO based in London. He joined Rio Tinto from Melbourne University in 1970 and spent several years as managing director of the Australian operations and global head of the energy operations, both positions that put him at the forefront of battles with the CFMEU and the AWU over coal mining productivity in NSW and Queensland.
Ironically, on retiring from Rio Tinto in April 2007, Clifford did not aspire to be a professional director. His main goal was to replace former BHP chairman Jerry Ellis as chancellor of Monash University.
Unfortunately, he lost a power struggle with pharmaceutical entrepreneur Alan Finkel, who has led the 18-member Monash council since January 2008.
Having amassed a fortune worth about $30 million from his career at Rio Tinto — including a staggering $US15.34 million final defined benefit pension entitlement on his departure in 2007 — Clifford didn’t need the money from a non-executive board career.
However, when the acrimony erupted after the failed private equity tilt at Qantas, outgoing chair Margaret Jackson needed an external successor and she persuaded Clifford to step up for the job in November 2007.
This succession plan was announced in August 2007, two months before the Rudd government swept to office and Julia Gillard set about dismantling the WorkChoices system, which Qantas had enthusiastically embraced under former CEO Geoff Dixon.
It was Clifford who then led the process to appoint Alan Joyce as CEO with the full knowledge that it would be a provocative gesture to the unions, especially the pilots, seeing as Joyce had driven the Jetstar Trojan Horse industrial strategy, which did involve breaking a series of promises. From that point on, the trust with the unions was gone and Qantas was inevitably on a collision course.
Clifford chairs the Qantas nomination committee and has added some tough players. Richard Goodmanson was a fellow Rio Tinto director who joined the board in June 2008. This was a good appointment as Goodmanson was chief operating officer globally for Du Pont, but also spent three years as CEO of America West Airlines in the late 1990s.
Unlike many boards, the Qantas directors do not lack the all important “relevant industry experience”.
Remuneration committee chair James Strong was CEO of Qantas from 1993 until 2001 through the privatisation period and he was also CEO of Australian Airlines for four years until 1989, a period that culminated in the pilots’ dispute. Strong is a hard-liner as can be seen from his decade in the chair at Woolworths, which has not given a single concession on its 12,000-strong pokies operations and continues to brutalise suppliers of all sizes with its aggressive roll-out of home brands.
While it would be easy to characterise the Qantas board as being full of right-wing business types, you shouldn’t discard the importance of Barbara Ward, a former adviser to Paul Keating who was CEO of Ansett Worldwide Aviation Services for five years until 1998. Ward was also a director of Allco Finance Group, a major global player in aircraft leasing which collapsed in 2008. This led to a stunning 42.5% against vote at the 2008 Qantas AGM, but all was forgiven last Friday when every resolution was supported by more than 96% of the voted shares.
Ward has clear links to the Labor Party as she enjoyed a series of government appointments by the NSW government over the past decade. It would be interesting to know what members of the famed NSW Right, such as the TWU and Graham Richardson, think about her support of the Qantas lock-out.
Another recent addition was Paul Rayner, an expat Australian who Clifford got to know better in London when he was global finance director of British America Tobacco. You have to be tough to make it working for Big Tobacco.
The other key player is the highly regarded John Schubert, the longest serving director and a former CBA chair who missed out on the BHP chairmanship after a battle with Jac Nasser.
There was an element of military strategy in what Qantas did on Saturday and for that element on the board, look no further than General Peter Cosgrove, who has been a Qantas director since 2005. Qantas spin doctors are very much pushing the line that the lock-out was an operational decision taken by management. Nice try.
The full board gathered for a phone hook-up on Saturday morning and endorsed the decision. If it backfires, and it is still too early to tell, then it will be on their heads as much as Joyce’s.