Qantas domestic - mopping up the blood

The board’s fanatic support for the ATM bid raises important questions: did the board engage in due deliberations? Assuming Ms Jackson doesn’t disembark forthwith; will her continued tenure and her strong identification with the bid, conflict with shareholders’ interests in the event that a rival bid is made before her planned resignation at the AGM? How does the flying Monopolistic Marsupial plan to deal with the perception that Ms Jackson is the ATM’s woman on the spot? Was the Grant Samuel report (which said the bid was “fair and reasonable”) nothing more that the board vaccinating itself by obtaining an independent opinion? (Note that such exercises do not provide any reliable guarantee that the transaction will benefit shareholders. Fairness opinions of investment bankers - like government consultants’ reports - often reflect the wishes of those commissioning it.)

Ms Jackson’s continued tenure on the board hangs like a toilet seat around her neck. The sooner she disembarks the more integrity she’ll walk off with. And the sooner the shareholders can flush the collective chain and refill the boardroom cistern with fresh talent.

Ms Jackson’s exit and the two other empty chairs on the board - being Mr Packer’s and another unfilled vacancy - affords the Monopolistic Marsupial a chance to redeem itself.

While there is talk of Mr James Strong (a current director on the board) swapping his seat and becoming chairman, two issues come to mind.

First, former CEOs are forbidden from becoming chairmen. And while some commentators are flagging a repeal of that requirement so as to shoehorn in Mr Strong into the role, I question if shareholders are open to yet more boardroom shenanigans. Somehow I doubt it.

Second, I wonder just how starry-eyed are Qantas shareholders about having an experienced aviation industry veteran in the chairman’s seat as many in the media are. Surely it is enough that a chairman has sufficient boardroom experience. Any absence of technical aviation industry knowledge is not necessarily a liability, given that any future chairman can expect to mine knowledge and advice from the CEO, Mr Geoff Dixon as well as former CEO, Mr James Strong. Both of whom will still be sitting around the board table.

That said Mr Strong would no doubt prove tobe an able deputy chairman.

If one was to look outside the Qantas hangar for a chairman, one external candidate with a wealth professional and academic experience, not to mention a person held in high regard by both corporate Australia and by politicians, readily comes to mind.

At less than 5km - as the forthcoming Boeing 787 Dreamliner flies - from Qantas head office in Mascot lies the University of New South Wales in Kensington. Professor Fred Hilmer is currently at work there as the vice-chancellor. He is also the Deputy-Chairman of Westfield. Previously he was the Chairman of (New South Wales utility) Pacific Power and Deputy Chairman of Foster's Group.

He is no doubt best remembered for his reign from 1998-2005 as CEO of John Fairfax Holdings, and before that he was Dean and Director of the Australian Graduate School of Management. He also ran management consulting firm McKinsey’s Australian offices, he chaired the Business Council of Australia's Employee Relations Study Group and in 1992-1993 he oversaw the National Competition Policy Review Committee.

If not Professor Hilmer, Qantas could look towards federal and state government boards and choose someone from that pool. After all, most government corporations are monopolist or quasi-monopolists, and operate in a customer (and shareholder) derisive manner, so a transition from a government board to Qantas should be a walk in the park for any candidate.

One serious candidate must be Mr Philip Higginson.