QANTAS HANGS ON TO ITS BEST ASSET

GOOD.

Keeping Alan Joyce as CEO – through at least 2022 – and semi-publicly committing to doing so is the smartest and easiest thing Richard Goyder is ever likely to do as chairman of Qantas.

Now I “would say that”: after all Herald Sun Business Daily panel named Joyce as their CEO-of-the-year last Christmas.

So, with such recognition, why on earth would a rational chairman and a rational board of directors want to hurry him out the door. Indeed, even 2022 could be ‘too soon’.

It was just as smart but not quite so easy and indeed much, much more courageous – in the real not the ‘Yes Prime Minister’ sense of the word – for Goyder’s predecessor as Qantas chairman, Leigh Clifford, to commit to Joyce after the CEO’s shock grounding of the entire fleet in 2011.

That move by Joyce was itself both courageous, in the same sense, and smart.

It came just three years into his term as CEO and when he very clearly had not just yet to prove himself in broad terms, but arguably didn’t have any runs on the board at all.

It would have been all-too easy for a chairman and a board to have taken the easy option of moving him on then. Especially, as his appointment had itself been somewhat unexpected and controversial.

And Qantas would have lost the CEO who took the airline from an uncompetitive and seriously challenged condition to build it into one of the world’s premier airlines and also a top airline business.

The relationship with Emirates best captures what Joyce has done; critically, how the relationship has been tweaked to maximize Qantas’s broader dynamic; and the way Qantas has not ceded its separate international dynamics.

Now of course, ‘someone else’ – like most obviously John Borghetti who lost out to Joyce and who then went to Virgin – could also ‘have done it’.

But we’ll never know; what we do know is that Joyce did do it. And we also know that Joyce has grown deeply into the job.

He’s only 53; he’ll still only be 56 in three years time. Even though he’ll have been CEO for 14 years by then, it’d be silly to ‘move him on and out’ just on time expired.

What was not so smart – indeed, was just straight out dumb – was that Qantas didn’t actually ‘announce’ Joyce’s extension yesterday.

The only announcement was of some executive reshuffling beneath Joyce. This did carry a quote from Joyce that he looked forward to working with them “over the years ahead”.

Two ‘words’ to the chairman.

First, announcing a couple of subsidiary executive changes and NOT the extension of the CEO’s term is, to put it politely, not smart and indeed unacceptable.

Secondly, it’s probably not a bad idea to formally and publicly “own” the smartest decision you are likely to make as chairman.