Qantas has embarked on a significant overhaul of its governance practices following a review that identified shortcomings in decision-making and stakeholder trust.
The review, initiated in October 2023, examined the Board’s actions over the preceding year and their impact on customer service and reputation.
A key finding of the review was that the Board and management made mistakes that contributed to these issues. However, the report did not uncover any evidence of deliberate wrongdoing.
The Key Changes in Outline
In response to the review’s recommendations, the Qantas Board, led by Chairman Richard Goyder and Chairman-Elect John Mullen, has committed to implementing a comprehensive set of changes. These changes encompass the following key areas.
Enhanced Board Reporting
The Board will receive more detailed reports on customer metrics, employee engagement, and stakeholder relations. This increased transparency will allow the Board to make more informed decisions and better understand the impact of their actions.
Remuneration Framework Revision
The Qantas remuneration framework is being revised to ensure better alignment with company performance and stakeholder interests.
This will help to incentivize the Board and management to make appropriate decisions. It will further ensure that these decisions are in the best long-term interests of the airline.
Share Trading Protocols
The Group CEO and senior management will implement tighter protocols for the approval of share trading by the Group CEO and senior management. This will help to mitigate potential conflicts of interest and ensure that insider trading is prevented.
Stakeholder Engagement
The Board will have a more active role in general consultation. It will effectively have greater oversight in approving Qantas’ involvement in significant stakeholder and community issues.
This will ensure that the airline is acting in the best interests of all stakeholders. It will further ensure that the Group remains responsive to community concerns.
Broader Reforms & Leadership Transition
In addition to these specific actions, Qantas is undergoing a broader organizational transformation. This includes the appointment of new Independent Non-Executive Directors to the Board. It will see the commencement of a leadership transition with the selection of a new Group CEO.
Qantas is actively implementing changes to bring fresh perspectives and expertise to the company and ensure it is well-positioned for the future.
As previously announced, Chairman Richard Goyder will step down on September 16, 2024. John Mullen, who joined the Board in April of this year, will succeed him as Chairman, subject to shareholder approval at the upcoming AGM.
John Mullen, Qantas Chairman-Elect, emphasized the importance of learning from past mistakes and rebuilding trust with stakeholders.
He acknowledged the progress made by the new management team but stressed the ongoing need for continued improvement.
Conclusion
Qantas is implementing the review’s recommendations to achieve stronger governance, improved decision-making, and ultimately, better outcomes for all stakeholders.
This multi-pronged approach indicates a commitment by Qantas to regaining stakeholder trust and ensuring the airline’s long-term sustainability.
The Qantas governance review and subsequent actions represent a significant step towards rebuilding trust and ensuring the airline’s future success.
By implementing the recommended changes and fostering a culture of transparency and accountability, Qantas can position itself for long-term growth and profitability.
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