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5 key factors for governance success from the Qantas Governance Review

In the wake of some serious governance issues and failings over the past few years, the findings of the Qantas Governance Review contain important insights for directors and senior executives. The reputational damage stemming from executive remuneration, legal proceedings in relation to cancelled flights and disputes around outsourced ground handling services led to around 30 recommendations for governance and risk, people and culture, stakeholders, customers, remuneration and reward, and safety.

The review examined the actions of the board and the leadership team during the 12-month period before the appointment of an independent business advisor in October 2023 and found:

  • The board could have more actively sought information regarding developing operational and customer difficulties
  • There was too much deference to a long-tenured CEO
  • The board and senior management did not always facilitate robust challenge on some issues
  • Board members were collegiate in their approach but that this should have been complemented by more “tough but fair” debate and challenge
  • The board would benefit from drawing more upon external expertise and insights when needed and more informal interaction with stakeholders
  • Benefits of past board reviews were not maximised
  • Board and board-management culture was not an explicit topic of conversation and there was no shared view of desired culture.

While the Qantas board and leadership team have committed to implementing the recommendations in full, learnings from the report can be distilled around some key governance success factors:

  1. Knowing your business, its key drivers of success, and how internal operational practices affect external outcomes
    Focus intensively on your business, its workplace safety, security, cyber, health, quality and environment from top to bottom. Where appropriate, use cultural frameworks and strengths as a catalyst for change in other areas of your organisation
  1. Knowing your customers, what is important to them and consider how decisions may affect trust and loyalty
    Invest more time to understand customers better and the value of trust and loyalty. Ensure customer needs are better reflected in planning, decision-making and governance
  1. Connect deeply with staff and engage the power of culture
    Make staff a priority and energise culture so your organisation is a ‘great place to work’ where everyone feels trusted to deliver on your promise for customers.Align remuneration and benefits policies to reflect a balanced scorecard and best practice, particularly including shareholding and trading guidelines. Use variable remuneration adjustment tools, including clawbacks, to ensure there are consequences for serious risk issues or misconduct.
  1. Know your stakeholders, what is important to them and how best to connect with them
    Understand the full array of stakeholders impacting your business, hear their ‘voices’ and adopt open and empathetic two-way communications – including a commitment to strong governance for decision-making on disclosures.
  1. Be a board that aligns its processes, meeting cycles, deliberations and culture with its customers, people and stakeholders
    Use comprehensive risk identification, analysis, debate and mitigation, and include non-financial criteria in decision-making.Ensure your board has the time and attention for important matters, including to challenge management effectively within a framework of agreed interaction norms (focused on sharing and collaboration, accountability and challenge, and respect and support).Commit to formal feedback mechanisms and development cycles covering skills and behaviours for board and management effectiveness. Capture lessons learned from any significant matter for future use.

If you want to stay on top of all the key governance and risk management issues, become a member of the Governance Institute of Australia and receive access to all of our Good Governance Guides and resources.

You can also hone your governance skills and knowledge with the Governance Academy. Check out our extensive range of short courses and postgraduate studies, with our new micro-credentials released next month for delivery in 2025.

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