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Bond Business Leaders Forum discusses role and accountability of board directors

March 3, 2020

L-R: John Massey, Chair of Transurban Queensland, Marion Charlton, Chief Operating Officer at Gold Coast Airport, and John Witheriff AM, Chair of Partners at MinterEllison Lawyers

Queensland business leaders have defended the role of board directors and employers in the wake of the “wage theft” scandals that have rocked several major companies.

High-profile organisations including Coles, Target, Bunnings and Woolworths have been thrust into the spotlight after admitting underpaying staff by millions of dollars.

Speaking at a Bond University Business Leaders Forum, Transurban Queensland Chair John Massey said the vast majority of boards tried very hard to do the right thing, but the current environment meant mistakes were amplified and there might also be a need for the existing industrial awards system to be reviewed.

“The problem is, the little mistakes are getting amplified, and with respect to the wage theft, it occurs to me, and I’m told, that the industrial awards are so complex, that no-one knows how to interpret them and therefore as well as shift work being a major problem, the way you define a person’s category and the way they fit within an award is causing major issues. It’s not good enough, obviously, but there may be a time to do a review of industrial awards and make them somewhat user friendly so that both parties, employer and the employee know what they’re meant to be paid.”

He added a recent study issued by the Australian Institute of Company Directors compared Australian director liability against a comparative group made up of the United States, United Kingdom, Hong Kong, New Zealand and Canada, and found that in director liability terms, Australia was uniquely burdensome, and was equally unique and extreme in respect to corporate criminal liability.

MinterEllison Lawyers (Gold Coast) Chair John Witheriff AM also felt there was disproportionate pressure on directors.

“I suspect, at least I’m feeling and my co-directors are feeling, with the amount of money we’re now paying for advisors and other people to ensure we don’t step wrongly, that the pendulum’s swung too far. One of the major expenses that we have now is advice from our professionals on how we manage compliance. It’s very important, and it’s only going to get a lot worse because regulators now are being told, they need to take a prosecutorial stance and we’re seeing it right across the board.

“Absolutely you’ve got to be accountable, absolutely you’ve got to have in place all the necessary things to properly manage it, but I think at the moment the pendulum has probably swung a fraction too far.”

However, Gold Coast Airport Chief Operating Officer Marion Charlton stressed the importance of accountability, citing the recent high-profile collapse of celebrity chef George Calombaris’s food empire after he underpaid staff $7.8 million in wages.

“There were no winners in that, 400 people lost their jobs. I know it’s complex, but there’s more complex things that we manage to overcome, you’ve got to pay your people, and I think we do need to hold ourselves to account and the people who should hold that account should be the people who own the company because they’re the ones that lose the money if you don’t nail it.”