Qantas brings in BCG veteran Colin Carter for governance review
Qantas has called in Boston Consulting Group co-founder Colin Carter to investigate the airline’s recent failings, with former CEO Alan Joyce’s $16 million in bonuses reportedly up in the air.
According to The Australian, Carter has been tasked by the Qantas board to advise on the pay-out, and is currently interviewing Joyce and other senior executives on the series of scandals which occurred under the ex-CEO’s watch.
The transgressions saw the departure of Joyce in September, with his successor Vanessa Hudson calling in BCG itself to assist in repairing the airline’s reputational damage. McKinsey & Company has also recently been on the scene.
Carter is one of the most senior consultants in the country, having established BCG’s local predecessor PCEK in 1979 after working at McKinsey in Australia and the UK. He is also considered one of the foremost experts on corporate governance, having conducted possibly the first board review in the country at BHP back in 1995, and was more recently engaged by Westpac.
In the incestuous world of big business and consulting, Carter’s appointment at Qantas comes as chairman Richard Goyder prepares to step down, with the two men having worked closely together for many years at Westfarmers and through the AFL. Goyder’s incoming replacement, John Mullen, was also last year appointed as the inaugural chair of PwC public sector breakaway Scyne Advisory.
As pointed out by the Sydney Morning Herald, the public relations benefit of an attempted claw-back is worth more than the money itself (the cynic again noting here that BCG has been serving Qantas in this specific area), with the appointment of an outside consultant also providing the board with an “insurance policy” should Carter conclude that the $16 million bonus can’t be withheld.
From an outsider’s perspective, it’s imagined the exercise should otherwise be a relatively straightforward one from a contractual standpoint. Despite the egregious bungles, Qantas made a record $2.5 billion profit over its last financial year, and its likely the bulk of Joyce’s bonus structure is dependent on meeting certain financial performance targets.
In a statement to The Australian, Qantas said it had withheld 20 percent of incentives for senior executives for its past financial year and would await the outcome of ongoing court action before deciding what to do next; “An independent review into these matters and a broader review of governance was commissioned by the board. These will be considered in the coming months.”
