Former Qantas chief executive Alan Joyce has resigned amid a flurry of negative news reports.
It comes as Qantas and Joyce faced increasingly hostile criticism of how the airline is run and the seemingly generous treatment given by both sides of government.
But while Qantas has been dominating the news headlines, is it just one more business and leadership that is failing to live up to a moral code?
There was the scandal of PwC lining its pockets at taxpayers’ expense, Optus’s spectacular data breach, News Corp’s phone hacking and Coles and Woolworths underpaying their staff to the tune of millions of dollars.
This list goes on – and let’s not forget our politicians.
Never been more distrusting
Barnaby Joyce charged the government $675,000 in expenses while a ‘drought envoy’. He never produced the final report, although apparently there was a text message.
Well, maybe that’s all come home to roost.
Roy Morgan research has found that Australians ‘have never been more distrusting’ of corporate Australia since the survey group began polling on the issue in 2017.
“The poor behaviour of many of the economy’s corporate leaders reveals a moral blindness to what is ethical and in the community’s interest rather than solely in the shareholders’ interest,” the report states.
Roy Morgan chief executive Michele Levine says this alarming increase in distrust following major scandals shows the importance of ethics in business.
“From the onset of COVID, corporate leaders had to respond with agility, often sidestepping the checks and balances. This got many of them through the pandemic recession,” she says.
Moral blindness
“But once the crisis had passed, they found the new freedoms they had enjoyed under the cover of COVID hard to relinquish, and a kind of moral blindness became endemic.
“The pandemic made it easier for leaders to look the other way, to avoid facing the ethical repercussions of their behaviour.
“Fundamentally, we need to arrest this trend and embrace a decency principle while at the same time ensuring company directors put distrust on their boards’ risk registers.”
One of the main bugbears is corporate pay.
Every time the government increases the minimum wage, corporate Australia is up in arms about how it will fundamentally harm the economy, yet their own pay continues to escalate.
According to the Australian Council of Superannuation Investors (ACSI), chief executives at Australia’s biggest companies are earning 55 times more than a typical worker.
This is a fall from 98 times adult earnings in 2021.
ACSI found CEO pay at the 100 largest listed firms averaged $5.2m in the 2022 financial year.
This is a ‘restrained’ level of pay, according to ACSI.
“It is good to see more restraint on executive pay in Australian companies over the past year, but there is still an ‘everyone wins a prize’ attitude in some parts of the market,” said Ed John, an executive manager at ACSI.
Welcome trend
Griffith Business School Professor Nick Barter told the Sydney Morning Herald the pay drop was a welcome trend.
“There may be some humility coming back where people are starting to take a more systemic perspective of businesses and realise this notion of hero CEOs doing everything themselves is nonsense,” he said.
“But also there may be some broader trends, like we are experiencing a slowdown, we’re all feeling a bit poor and, consequently, it’s a bit unsavoury and unseemly to pay CEOs excessive amounts,” he says.
Australia’s highest paid CEO is Mick Farrell, who runs ResMed, a medical supply company. Mr Farrell earns $47,138,147 a year.
Do you think there is some ‘moral blindness’ in Australia’s leadership? What would you do to curb it? Why not share your opinion in the comments section below?
Also read: Adviser shares five ways to improve your financial fitness
You are being too kind to call it “Moral blindness”. Too many executives are being deliberate in their actions knowing that if they get court they will get a slap over the wrist with a wet lettuce. Tighten the regulations so that these culprits could face jail.
A. Joyce walks away with millions so is rewarded for poor behaviour (shocking evasive performance at the Senate enquiry). Board members collect their pay without having a clue about what’s going on. How about suing them for obtaining money under false presences?
Bazaar. Agree with you. They walk away with no Jail. But I’m guessing Alan Joyce won’t get a job elsewhere now. He’s so disliked by the community.
What Alan Joyce did was illegal. He should personally be charged. And the board too. How much suffering have they caused. Suicides? Personally I think what he has done is very serious.
Why would he want another job, take the money and run is his motto, slug!
It’s not moral blindness in most cases it’s shear greed. CEOs are the first to complain that a mediocre pay rise for workers would wreck the economy but when was the last time we heard the same about CEO bonuses of $millions? Besides Joyce of Qantas, the CEO of Westpac sailed along after the banks massive money laundering charges and fines; Coles and Woolies underpaid staff tens of millions; the CEO of Medibank received a $2 million bonus the same year that it released over nine million customer’s personal details to the world. The list goes on.
What is notable is that the bigger the company and CEO pay, the lower the level of customer service. I have been told by several large companies that (despite their massive resources and cashflows) they can’t compete with the smaller competitors on answering their phones and providing customer service. Why because they are greedy. I have moved to smaller banks, a smaller electricity supplier and a smaller Telco and more to come. All offer better prices and service and a local human answers the phone promptly. Oh, and no big noting CEO to support.
What Alan Joyce has done is more serious than anyone could imagine. It may not entirely his fault, but corporate greed has been here with us since the accounting profession discovered shareholder’s value in the 1980s, so called the bottom-line. Cost cuttings at the customers’ expenses are the modus operands. The next step is to outsource human resources through hiring companies, a main assault to enterprise agreements. in the last decade salary theft has been the practice. They have done it under the defence of capitalism. In realty, they are abuse the true model of capitalism. Its true definition is surely the ownership of the means of production for a profit with the pay wage of hire helps, in a perfect demand and supply market. The modern corporations play around with pay-wage and perfect market to achieve maximum shareholder’s value. Government should restore the true meaning of capitalism through competitions or regulations, or both.
I think the lack of honesty is world wide from major businesses to Politicians, Banks.
These people are not held accountable look at Albanese, Anastasia whatever her surname travelling the world first class with their partners all paid for by the hard working Taxpayers, they can do what they like as they are not held accountable, can’t see the value in these unprincipled people. Banks making huge profits while Australians are struggling to live trying to pay exorbitant interest rates again not held accountable. As for the horrible Alan Joyce he got paid huge amounts to wreck Qantas. We are all to blame as we allow this to happen.