And current Qantas chairman John Mullen, who was appointed on the reformist ticket, is receiving a lesson that replacing key leaders isn’t an instantaneous recipe for resetting culture. You can’t just add water and stir.
Fixing Qantas’ culture will take time, and Mullen can’t simply draw a line under the Joyce and then-chairman Richard Goyder regime, and the Mullen and Hudson reign that replaced it, and call it a cultural revolution.
Qantas boss Vanessa Hudson, her predecessor Alan Joyce, and former chairman Richard Goyder.Credit: Bloomberg
For his part, Mullen is now put in the position of needing to argue that Hudson’s cultural bona fides are sound – despite her previously being part of Alan Joyce’s executive team.
But the major proxy advisory outfit the Australian Council of Superannuation Investors is carefully signalling that someone needs to pay for the embarrassing $90 million fine imposed on Qantas by Lee and management does not avoid any pecuniary consequences. This represented 75 per cent of the maximum penalty that could have been imposed and is almost nine times greater than the highest previous penalty, which was imposed on the Commonwealth Bank last year.
So this will be a serious test for Mullen, who is generally considered an A-list director with a particular talent for reading the room.
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When he took the chairman’s role at Qantas, he was generous in his acknowledgement of the mistakes made by the airline and took on the challenge of clawing back $9.3 million in bonuses awarded to Joyce.
A review of Qantas’ governance had found that while Joyce was the chief executive, the board had failed to challenge an all-powerful chief, leading to a “command and control” approach from Joyce that left the airline with “significant reputational and customer service issues”.
But it also comes at a time when Qantas is set to deliver a particularly strong profit for the 2025 financial year – which under normal corporate circumstances would give Hudson a performance halo.
The airline’s share price clearly reflects the positive financial outcomes of the past year – over which time the shares have risen 78 per cent.
Qantas has been the recipient of a seemingly relentless demand for air travel by Australians and a benign competitive environment allowing fares to remain elevated.
But it seems booming profit is not enough to protect Hudson from a judge who made her role in Qantas’ mistakes personal by questioning the real level of cultural change under her two-year leadership.
It says plenty about the depth of Qantas’ behavioral scars.
