Michael Pascoe: The buck really does stop with CEOs and other masters of the universe

These three organisation leaders have failed in their duties, writes Michael Pascoe.

These three organisation leaders have failed in their duties, writes Michael Pascoe. Photo: TND/Getty/AAP

Time and again it’s not the initial failure that brings those at the top of the corporate tree undone. It’s how they handle the mess.

Time and again the Masters of the Universe have trouble dealing with the buck when it stops with a bang on their desk – which indeed is where the buck halts.

Time and again they have trouble owning the trouble.

The people at the top are paid the big dollars because they are supposed to be responsible for whatever happens – the good or the bad.

The latest case in point is the Optus missed connection. CEO Kelly Bayer Rosmarin has suffered a greater pile on for how she was seen to immediately handle the equipment failure than the company has for not having redundancy built in for vital systems.

Of course it’s hard to communicate with your customers when the means you always use for communicating with your customers don’t work, but competent management is supposed to have crisis management plans for when they have a crisis. Whatever plan Optus had failed on the communications and government relations front.

The next test for the CEO is how she handles cleaning up the mess of double failures – the equipment/software and communications/PR.

Ms Bayer Rosmarin is not alone in such a predicament. The Qantas reputational crash focused the lasers on the board, the departed and current CEOs.

Qantas and what not to do

With Alan Joyce gone, the buck screeched to a halt on chairman Richard Goyder’s desk and found it wanting, first in Mr Goyder’s unwillingness to accept there indeed was a problem, then in finding a way out of the hole he had dug.

Off the top of my head, I can’t recall any major public company chairman receiving the slapdown from his or her shareholders at an annual general meeting that Mr Goyder copped earlier this month, when 83 per cent of votes were cast against the remuneration report – shareholders’ best way of saying “not happy, Jan” – when the chairman was not himself up for re-election.

And then there is the steady unravelling occurring at Rugby Australia where, again, it isn’t the immediate failure of Eddie Jones’ coaching at the Rugby World Cup that has me wondering, but how long Hamish McLennan can remain as chairman after the way he has handled the mess he created.

The Sydney Morning Herald’s Iain Payten and Tom Decent last week did a fine job on the inside story of Eddie Jones’ appointment, failure and departure.

In my opinion, it shoots holes in the picture Mr McLennan has been retailing since the Wallabies crashed and burned in France under a dysfunctional coaching regime.

Like Ms Bayer Rosmarin, Mr McLennan has apologised for the Wallabies’ performance – but also has blamed everyone else for Jones resigning, claimed sacking Dave Rennie as coach and appointing Jones was not a “captain’s pick”. Finally, and most astoundingly, he now says he has no regrets about hiring Jones and would make the same call again.

Former Qantas Group CEO Alan Joyce speaks during a press conference. Photo: Getty

That last bit is simply weird, yet it fits with a version of reality not dissimilar to Richard Goyder’s at Qantas – an inability to own the unvarnished version of events.

The story built up to justify the crudely handled dismissal of Dave Rennie was a smear job on the Wallabies’ actual record last year.

At first glance, five wins from 14 tests looks bad, but those bald numbers don’t tell the story for anyone who follows the game closely.

It included losing to the world’s no.1 rated team, Ireland, in Dublin by three points and the world’s no.2 rated, France, in Paris by one. If you’re ever betting on Ireland and France test matches, remember those teams playing at home is worth a five-point start.

Explanations, not excuses

It included the infamous French referee’s whistle in the last minute two-point loss to the All Blacks.

It included defeating Wales in Wales – the team that subsequently wiped the Lyon floor with gold jerseys in September, 40 to 6.

It overlooks the fact that the Wallabies were building, becoming more competitive despite a dreadful injury toll.

It overlooks that injury toll reducing Rennie to fielding something like a third-string side against Italy, resulting in the loss that sealed his fate when Mr McLennan had already been duchessing Eddie Jones.

As the SMH “inside” story reveals, the board and then CEO Andy Marinos were not all onside with the chairman’s Jones plan but Mr McLennan’s way prevailed.

The Rugby Australia board would not be the only one to be carried along by a forceful chairman with a big personality.

As the Jones disaster unfolded with piecemeal assisting coaching staff appointments, erratic playing aims, disclosure of a job interview with Japan and finally that Wales game, the chairman was pushing other aspects of his own performance.

He reminded rugby supporters Australia had won the right to host the 2027 Rugby World Cup.

What he did not remind people is that in 2019 there were only three countries bidding for the 2027 cup – Australia, Argentina and Russia.

Argentina pulled out in April 2020, the month before Mr McLennan became chairman, and Russia was banned by the Court of Arbitration for Sport from holding any major sporting event for two years.

We’re hosting the 2027 RWC the same way Brisbane is hosting the Olympics – by a Bradbury.

And Mr McLennan has reminded people that he donates his chairman’s salary to women’s and Indigenous rugby, which is a fine thing.

I’d remind Mr McLennan, though, that most people who love and work for rugby union do it for free anyway – and don’t get seats up the front of the plane and the best tickets for matches.

The chairman’s preferred view doesn’t seem to be getting accepted. It certainly isn’t at the Australian Financial Review, where Mark Di Stefano is picking up the blowtorch where Joe Aston left off in the Rear Window column.

Stories like “The self-pity party of Hamish McLennan”  and “Hamish McLennan’s REA took the board to Paris” won’t swing the financial support RA needs from the big end of town.

Whether Optus, Qantas or Rugby Australia, the stopped buck has a habit of enforcing its own story.

Disclosure #1: I’m an Optus customer but I’m not running a business and nothing urgent happened in my life on Wednesday, so I was merely inconvenienced a little. If I had been badly affected though, the offered compensation of more free data than I could use (at marginal cost to Optus) probably wouldn’t excite me.

Disclosure #2: I’m a rugby fan. Sympathies accepted.

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