Outgoing Qantas CEO Geoff Dixon has just discovered that his new chairman Leigh Clifford, the former Rio Tinto CEO, is one of the true hard men of Australian business.
Fancy turfing Dixon straight after the worst Qantas safety incident in history and not even giving him some quotes in today’s CEO succession press release.
At 42, Irishman Alan Joyce will be the youngest CEO of a top 50 company and he was not Dixon’s preferred choice.
Dixon got to the top in 2001 by courting former Qantas chairman Margaret Jackson and almost made a fortune out of last year’s private equity deal where board processes failed and conflicts of interest were rife.
Jackson and her biggest board supporter, James Packer, walked the plank straight after the bid failed, although Clifford didn’t formally take over as chairman until after last year’s AGM.
Packer was a top 20 Macquarie Bank shareholder while his great mate Nicholas Moore was driving the APA bid. Packer is also known to be close to Dixon, having invited him onto the PBL board in early 2006, shortly after his father died.
Clifford replaced Jackson knowing full well that his primary job was to win board support for a purge of those who failed most of the governance rules last year.
However, given that all the Qantas directors supported the private equity process, the onus was on Clifford to rebuild the board before he could strike.
So far, he has added three new directors — Rio Tinto director Richard Goodmanson, former Allco director Barbara Ward and Paul Rayner, a Clifford associate from their days together in London.
Former Qantas CEO James Strong and CommBank chairman John Schubert were said to be the two other Flying Kangaroo directors keen to move on Dixon.
Strong didn’t appreciate the campaign Dixon ran with the board, and especially Jackson, to replace him as CEO in 2001 and was also miffed when Dixon and Jackson rebuffed his attempts to land the Qantas chairmanship last year.
Finance director Peter Gregg was considered a likely successor to Dixon, but he was also part of the conflicted management team. Indeed, when asked if it was true he’d gone fishing in Ireland with Mark Carnegie, the Qantas adviser who stood to pocket a large slab of the $96 million in success fees if the APA deal went through, he replied as follows at the 2007 AGM:
I like to fish and I regularly fish when I can get the opportunity. Yes, I did go fishing with Mark Carnegie a number of months after the deal collapsed, but I also do a lot of other things with Mark Carnegie like aiding him in some of the charities he is involved with for indigenous children and for children in overseas depressed countries, so I make no apologies of going fishing, but I do reject any insinuation that I did something that was illegal or under cover in this process. I don’t think you have any right to make that suggestion.
Alan Joyce was the least tainted of the internal candidates by the private equity process and his execution at Jetstar has also been Geoff Dixon’s most important achievement as CEO. He’s the right man for the job.
Peter Gregg will presumably have more time for fishing in the future.