JUDY SLATYER ON LEADING THE RED CROSS THROUGH CRISIS - SHAREHOLDER DEATH OF - Mercer
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EDITION THREE
STORIES TOLD DIFFERENTLY
JUDY SLATYER ON LEADING
THE RED CROSS THROUGH CRISIS
SHAREHOLDER ARTHUR DEATH OF
ACTIVISM SINODINOS THE MBA?
Strategy for change Australia’s new How it’s adapting
or media stunt? US Ambassador to stay relevant
06
12
WELCOME TO THIS EDITION OF FIRESIDE
The decade began with a tough start for many Australians – bushfires, extreme
weather events and the coronavirus have made life feel uncertain and intense. It’s at
these times especially that we look to our leaders to guide the way.
Leadership is about making decisions under pressure, about acting in a way that in-
spires confidence in others to follow and about being open to different perspectives.
Take the Australian Red Cross’ CEO Judy Slatyer, who has been steadily at the helm
of the organisation leading the bushfire relief and recovery efforts. She made time to
talk to Fireside about how she handles the pressure of her job.
We also talked leadership with former Senator Arthur Sinodinos who has recently arrived
in the US as our new Ambassador. He shared his plans and his approach to the new job.
And what about that official symbol of leadership - the MBA? Is it still regarded as
meaningful? We discovered that far from being dead, it’s evolved to become more
industry responsive and reflective of current business scenarios.
This edition of Fireside also investigates the rise of shareholder activism, which is
seeing an increased dialogue between companies and their most powerful investors.
We continue to appreciate your feedback and hope you enjoy this edition.
Simon Eagleton
Institutional Wealth Leader
Mercer Australia
2 | FIRESIDE
16
20
04 LOOKING FORWARD 20 IS THE MBA DEAD?
CONTENTS
Change will continue to be a key theme Has the proliferation of MBA degrees
throughout 2020, with further regulatory lost the lustre of those once
upheaval and review on the way. highly-prized letters?
06 COVER STORY 24 INCLUSIVE LEADERSHIP
Red Cross CEO Judy Slatyer on leading How the changing face of leadership
during a time of national crisis. is reaping social and financial rewards
for businesses.
12 SHAREHOLDER ACTIVISM
Is shareholder activism an increasing 26 Q&A
trend that effects change, or a media Tobacco Free Portfolios founder and
stunt to push an agenda? CEO Dr Bronwyn King talks about an
ethical investment.
16 OUR MAN IN THE US
Australia’s new US Ambassador,
former Senator Arthur Sinodinos,
opens up about his new role.
COVER IMAGE: Judy Slatyer PHOTO CREDIT: Mathew Lynn Mercer.com.au/Fireside
FIRESIDE Magazine is published by Mercer (“Publisher”). All rights reserved. Copyright is reserved throughout. While the Publisher has
taken all reasonable precautions and effort to ensure the accuracy of material contained in the magazine at the time of publishing,
no responsibility or liability for any loss or damage will be assumed by the Publisher or its employees.
3
LOOKING
FORWARD
Change will continue to be a key
theme throughout 2020, with
further regulatory change and
review on the way. Organisations ESG IN FOCUS
across industries will be In the investment world, momentum
for ESG considerations in portfolios has
impacted, with a particular focus been gathering pace as the demand for
on the financial services industry responsible investment increases. The
year began with catastrophic bushfires
and superannuation. already raging across Australia, which
put a focus on climate change and
its impacts, not only on people and
the environment, but also businesses
and the economy. Smart investors
are rethinking their portfolios to not
only ensure they are ready to face
potential impacts of a warmer climate,
but also ensuring they are meeting the
changing expectations of consumers
with regards to ESG. The example of
a member taking legal action against
super fund Rest is a case in point,
and serves as a warning to other
businesses that the time to act is now.
BEAR to FAR
The Banking Executive Accountability Regime (BEAR) is set be replaced by the Financial
Accountability Regime (FAR), expanding to cover all APRA-regulated entities, including general
insurance, life insurance and Registerable Superannuation Entity Licensees, in addition to
authorised deposit-taking Institutions previously impacted by BEAR. There will be an expansion
in its scope too, adding a variety of requirements regarding accountability, remuneration
and notification, with penalties imposed for breaches. While it’s not known exactly when this
regulation will come into effect, lessons learned from the introduction of BEAR show that
impacted organisations should start preparing now to ensure they meet the timelines.
4 | FIRESIDE
INSURANCE IN
SUPERANNUATION
Regulators and government
continue to focus on ensuring
insurance provided in
superannuation is fair, equitable
and transparent. The Putting
Members’ Interests First bill
comes into effect on April 1,
requiring that insurance through POST-HAYNE
super funds must be offered on
an opt-in basis for new members
REGULATORY
under 25 years of age or those CHANGE
with balances of less than $6000. ACCELERATES
In addition, APRA intends to
expand its heatmap to include Regulation stemming from the royal
insurance in MySuper products commission recommendations had
as well as Choice products. a significant impact on super funds
and the wider financial services
sector in 2019, and 2020 will be
no different. New regulations are
coming at pace, with demanding
timelines for implementation. A
draft prudential standard, CPS511,
was announced by APRA in July
2019, which will impose further
regulations on remuneration for
financial services organisations,
extending far beyond the scope
of FAR. The standard is expected
to be finalised in 2020 and
implemented July 1, 2021.
THE RETIREMENT INCOME SYSTEM ON REPORT
The Retirement Income Review will examine the three pillars of Australia’s retirement
income system: the age pension, compulsory superannuation and voluntary savings.
The objective of the review is to understand whether this system ensures Australians
are well supported during retirement. Participants across the superannuation industry
have made submissions to the Panel, raising questions about adequacy, coverage
and sustainability of the system, as well as ensuring fair outcomes for groups such
as women and the Indigenous population. The Panel’s final report, due in June
2020, will comprise observations about the system, without recommendations. ■
5
ON RED
ALERT
With bushfires ravaging Australia throughout summer 2019-20,
Judy Slatyer found herself at the centre of a national crisis and, as head
of the Australian Red Cross, needing to draw from her natural empathy
and nuts-and-bolts pragmatism. She sat down with Peter Wilmoth.
A S CEO of the Australian Red Cross
during a time of national crisis, Judy
Slatyer knew an important part of her
We’re talking on a cool Monday morning
in early February at the Red Cross office
in North Melbourne. It’s a long way
of agencies and government
departments working together to
co-ordinate a disaster response.
job was to be there for those suffering from the scenes Judy witnessed when
“Being there on the ground is very
through the long days of this tragic the fires were at their fiercest in early important,” she says. “Doing what I can
summer. But as she travelled through January. Accompanied by Red Cross do, engaging the whole system. While
bushfire ravaged areas in Victoria and staff, Judy drove through East Gipps- it was very important to see it first-hand
New South Wales, she didn’t know how land to Bairnsdale and other towns, I trust the knowledge of our volunteers
personal it would become. and then up to the New South Wales and staff in those areas and sometimes
towns of Cooma and Cobargo and onto what can be most important is that I
“These are communities I know well,”
Bateman’s Bay on the south coast. spend time with those who have con-
she says of the south coast of New South
“Seeing the impact on friends, on the tributed funding, with the Federal and
Wales, much of which was badly impact-
places we love, knowing the communities State Governments, talking to British
ed by the horrific bush fires in January.
in places like Mogo, Moruya, Batemans Red Cross and New Zealand Red
It’s where members of her family have
Bay, and understanding the impact. This Cross, Canadian Red Cross to get all
lived for more than 50 years, between
mix of no income, no tourism, fire damage their learnings.”
Bateman’s Bay and Moruya. “To see the
– these were big impacts.”
impact in Mogo (south of Bateman’s Bay), In the field, Judy wore her Red Cross
to see the amazing leather shop there, It doesn’t take long in Judy’s company jacket just like all her staff and the many
all these different leather goods they to witness the warmth, humanity and volunteers, just another person helping
make… completely (gone) - so it didn’t organisational skill a good leader requires. in a crisis. Most people she met didn’t
exist. To see the impact on the main street Her skills were needed on several levels: know she was the CEO of the Australian
and know just how dependent they are on listening to the stories of those affected, Red Cross. “I don’t tend to make a big
tourism, to see whole neighborhoods and some of whom had lost their homes or deal of me being the head of the Red
streets – and know the relationships on properties, ensuring that people received Cross so most people I spent time with
those streets – decimated. And to see the the financial support they needed as soon wouldn’t necessarily have known,”
unbelievable impact on nature.” as possible and being part of a chain she says.
6 | FIRESIDE
Photo credit: Mathew Lynn
Judy Slatyer with Lisa Keedle, in the Red Cross
Emergency Operations Centre in Victoria.
7
The spring of 2019 and the summer been enough, the heavy rains followed
of 2019/2020 were appalling. Bush- in February and, while extinguishing
fires described as “mega fires” raged several big fires and helping farmers, it
across the country, some so powerful brought the danger of floodwaters.
they created their own weather. Whole
The Red Cross has been at the heart
towns were destroyed and even the
of the response effort for all these
outskirts of cities threatened. Acrid
disasters. “We’ve been in emergency
smoke haze hung over first Sydney then
response mode since September… the
Melbourne and Canberra. More than
earliest it’s started in our (106-year)
30 people died in the tragedy, 6000
history (in terms of fires),” says Judy.
buildings were destroyed and, accord-
“We’ve been supporting evacuation
ing to scientist Tim Flannery writing in
centres, relief centres, having thou-
The Guardian, the fires burned an area
sands of volunteers out in community.
around the size of England. It was a time
We’re now in the process of getting
of national crisis, fear, loss and trauma.
those funds to those who most need
Then, in early January, the novel coro- them while also supporting evacua-
navirus began spreading across China tion centres and relief centres for fires,
from the city of Wuhan, and then across floods and now supporting those in
the world. As though the suffering hadn’t isolation because of coronavirus.
8 | FIRESIDE
“This is what Red Cross does. We
are there for Australians in times of
says. “We need to understand the map
and then say what’s the best we can do to “THIS IS WHAT
emergencies and disasters. I have to complement and not duplicate.” RED CROSS DOES.
say that this has been more relent-
less and more complicated and more
Once that ‘map’ is established, there WE ARE THERE
FOR AUSTRALIANS
are further complications in delivering
widespread than we’ve had to deal
support. While understanding it is the
with in the past.
“The social and environmental
worst time to ask those affected for
paperwork, there are processes that
IN TIMES OF
impact of the spread of the fires must be followed before funds are EMERGENCIES
in Queensland, New South Wales,
Victoria, South Australia, Western
released. “There are several checks that
need to be done,” she says. “For exam-
AND DISASTERS.”
Australia - the sheer geographical ple, a grant to someone whose home Judy Slatyer
spread, the on-going nature of the has been burned down. First we need to
trauma – with many more roads confirm the fact of the loss, and whether
closed, people not being able to live it was their primary place of residence,
their lives, (and the impact on busi- not a holiday house.
The range of response efforts has
nesses). There were very different
“All of the data for this is hard to get, allowed for many learnings about further
social issues and challenges across
it might have disappeared. And there streamlining the response systems. “We
the whole community.”
need to be checks that a claim is not do a post-response review each time
She says the Red Cross was ade- fraudulent. Unfortunately there is always for learnings for every disaster and we
quately equipped. “That’s part of the best and worst of human behavior. embed those,” Judy says. “The learnings
our DNA and we spring into action. There are robot-designed claims – from Black Saturday were already embed-
We had thousands of Red Cross scams – that look incredibly real.” ded in our response this time. We might
volunteers trained and ready to go need time to think that through. I think the
It’s a matter of supporting people asking
into community. That hasn’t been the most important thing is that if people are
for least possible identification ”so it’s not
challenge. The challenge has been prepared, it’s much easier to recover. So
a hassle for them”. “Just to pay one
the need for funds, (needed) rather when people have their documents, and
person or one family means identifying
quickly. We’ve been working through they have their bushfire or flood plan they
all those things, walking with them, work-
how we manage that as fast as we can literally rock up and say ‘Here’s my ID,
ing with the bank to release the funds.”
can. This week we will have distrib- here’s my bank account, here’s my proof
uted $34 million to those who need It’s a multi-dimensional task. “Working of ownership’, and it’s really easy. Our
it, which is just fantastic. We’re doing with other agencies and State and well-developed research is that the more
everything we can with every bone in Federal Governments takes a lot of prepared the population is the faster it
our bodies to get additional support time. They’re all trying to coordinate, so recovers from crises.”
to those who need it.” everyone’s trying to get it right but it is
incredibly complex.” A key learning from the tragedies of last
Delivering funds to those affected is summer was the need to be prepared.
not a simple process, as the Red Cross Judy says state governments – partic-
works in concert with other charities ularly in Victoria and New South Wales “We have a goal of getting three million
and government agencies. “First we – have moved quickly to establish Australians prepared for disasters, and
need to understand where we fit versus working groups to co-ordinate the relief it’s a bit of a challenge,” she says. “It’s
what others are doing, State and Feder- response. “They are meeting almost a bit like Slip Slop Slap with (the) skin
al Government, Salvation Army, Vincent weekly, sharing information. The tricky cancer (campaign) - there’s initially a bit
de Paul, small businesses grants for bit is to be able to share people’s private of ‘It won’t happen to me’. And we have
people, for fencing for instance,” she data without breaching their privacy.” to somehow break through that.”
9
“OUR INTENTION...
WAS ALWAYS TO
SPEND THE VAST
MAJORITY OF
THE FUNDS ON
THE FIRES.”
Judy Slatyer
Photo credit: Mathew Lynn.
She said it was important that agencies
such as Red Cross made sure there was
“sufficient care in the system”. “It’s so
important for us to have our thousands
of volunteers out in communities, touch-
ing base, picking up where there’s vibes
and tensions, helping people if they see Judy Slatyer with Damien Moloney, Red Cross Commander.
someone traumatised or distressed,
walking in with them as they walk back
to their property. That physical face-to-
face, in and of community is a factor that “stockpiling” bushfire donations to because it can create real problems
is really critical.” earmark money for future disasters. It setting up a separate fund. Then of
was, according to Judy, a misreading course it all unexpectantly took off –
Judy has been CEO of the Red Cross
of Red Cross’s processes and, in some fires and funding – from about January.
since 2016 after stints in senior roles at
measure, a misunderstanding. We said ‘This is the fund to use’. And (the
Telstra, a start-up in Silicon Valley, the
fund) grew rapidly.
World Wide Fund for Nature and Lonely “Every year we launch a disaster and
Planet publishing. She sees her role as recovery fund on 1 July,” she says. “This “Obviously the community expectation
needing to learn quickly and to bring back is to support the work we’re doing was from about Christmas that all of
the best knowledge as well as to be there today – evacuation centres for the those funds would be used to support
for the people who are working hard. floods, phone calls to those isolated people in the bushfires, even though it
As a leader Judy knows the importance by coronavirus, cyclones - last year we was in the same fund. So from 4 January
of accessing the input and expertise of evacuated 2000 people in the Northern we said the first chunk of funds – the
the team. “The people here have way Territory in 24 hours. That fund is meant $5million – we’ll keep those to do our
more expertise than I do and the people to support our organisation in being evacuation work, but the rest of it will go
in the field (too),” she says. there when Australia needs us. to the bushfires. And because we kept
In recent times, the Red Cross has had “Between 1 July and early December calling it the disaster relief and recovery
its own internal issues to deal with – 2019 it had raised about $6 million. Then fund, even though we were committing
testing Judy’s steady leadership. In when the fires started in September we the rest of it for the bushfires, I think
late January it denied claims it was asked people to donate to this fund, that’s what caused the confusion.
10 | FIRESIDEJudy says the Red Cross operated under
a “complicated” structure of 18 employ-
ment awards and five enterprise agree-
ments. “When we realised we had people
on the wrong awards the first thing we
had to do was work out what awards they
should be on, which is when we realised
there were 18 employment awards and
five enterprise agreements. We moved
as fast as we could to get people on the
correct rate of pay… and give a big chunk
of the backpay.
“Now we are at the point of making sure
we get every cent correct and making
sure we are 100 per cent paying people
correctly from here on.” She said the
process should be finalised by July 2020.
Judy’s philosophy that confidence
and calm were crucial for a leader has
been challenged over the past few
months. “Calm I’m definitely focused on,
because I think that’s so important for
everybody for leadership to be calm in
circumstances like this because if you
“I feel it was a misinterpretation. I’m sure The negative media attention following have panicked leadership it has bad
those who felt it wasn’t wouldn’t believe this isn’t the only negativity the Red impacts across the organisation.
it, but our intention from late December Cross has faced in recent times under
when we realised how bad it was, was Judy’s leadership. In 2018 it was revealed “Confidence is about listening. It’s not
always to spend the vast majority of the that the Red Cross owed staff millions of knowing you have all the answers, but
funds on the fires. dollars in back pay. On discovering this knowing that listening and being in and
it immediately self-reported to the Fair of a community will guide you to the
“We were very clear about how the best way to solve a problem.”
funds would be used – very clear about Work Ombudsman and launched urgent
the $5 million for (other) emergencies investigations to fix the problem. What is she drawing on during these
and the rest for fires. We launched “We found we had made a mistake in our challenging times? “Love of being
that (on 20 January) and that was what payroll system that impacted everybody, curious, love of working with people to
was misunderstood. And that became which was not one of the things you want achieve things, a real connection to the
10 days of very negative media even to find,” says Judy. “It was a shock. We purpose and cause of the organisation,
though we felt we’d been really clear had started looking because we wanted a real belief in organisations like ours
and transparent that it was all going to to create a new whizbang 21st century re- that can really help make the world a
the bushfires except for this $5 million. muneration system and thought ‘Let’s look better place. Being a happy and optimis-
at what we have a bit more deeply’. I’d tic person is pretty important.”
“We are doing our best to make it very
clear. The panel meets every week to been here a year. It’s not one of the things Is it about head and heart? “Definitely,”
discuss funding decisions, how best to you want to lift up, but when you lift it up she says. “And that’s part of being out in
get funds to those most in need.” you can’t put the rock back down.” the community - feeling it, seeing it.” ■
11STUNT OR
STRATEGY?
Is shareholder activism an increasing
trend which effects change, or a media stunt
to push an agenda with a corporation?
Lahra Carey reports.
12 | FIRESIDEIf there is any doubt that investors
know their rights and are not afraid to
use them, the activity of shareholders
“There were some fund managers who
bravely stood up in individual cases, but
it was really hard because the Australian
at BHP’s annual general meeting late business establishment is really cosy and
last year was enough to make even there was retribution,” he explained.
the sceptics sit up and take notice.
Lawrence says it was within this environment
At that meeting, the activist investor that institutional investors were galvanised
group Australasian Centre for Corporate to become more involved, realising they
Responsibility (ACCR) introduced a needed to take it seriously and start asking
resolution calling on the mining giant to questions of their fund managers.
suspend its membership of industry bodies
“What’s lost,” says Lawrence “is that
- such as the Minerals Association - which
companies know who votes against
don’t support the company’s policy of
them. It’s not an anonymous vote – they
emissions reduction. The proposal was co-
actually have a list and can work it out.”
sponsored by Australian superannuation
fund Vision Super, highlighting how According to Lawrence there’s a genuine fear
mainstream this approach is becoming. of payback for fund managers who dissent.
Notably, 27% of BHP’s shareholders “I know of one very large company where a
voted in favour of the resolution fund manager - who is a pillar of conservatism
at its Australian AGM in 2019, - voted against a remuneration report because
despite the Board recommending they thought that the company was timing
shareholders vote against it. things at year-end to make bonus numbers.
And I know this fund manager – they would
According to corporate governance advisor
have been incredibly polite and courteous. That
Ownership Matters, the groundswell
CEO refused to meet them again,” he says.
leading to this type of activity has been
building for the past couple of decades. “There are real penalties.”
“By and large institutional investors have Lawrence says activism was traditionally
become increasingly active over the taken up mostly by institutional shareholders
past 20 years in exercising the rights putting pressure on a company to
attached to their shares,” explained improve its financial performance.
Research Director Martin Lawrence.
“The Australian activism story is actually
The business is retained by institutional a real cry for common sense because
investors to provide advice as to how almost all shareholder activism in
they should vote their shares. Australia happens behind closed doors
or in conversation,” said Lawrence.
“We meet with more than 200 boards
a year who talk to us in the lead up to Currently there is significant global
meetings about something they’re doing, activism around climate change, and
so we can communicate what our clients it is now moving into shareholder
have told us and we can say ‘we’re activism, both retail and institutional.
hearing a lot of chatter about this’.”
“I think one of the things people
Lawrence accredits the rise in shareholder don’t really understand in this space
activism to the corporate collapses is how sensitive to embarrassment
of the early 2000s, coupled with the companies are” Lawrence explained.
institutional shareholders’ growing scale
Mercer Partner and Head of Responsible
and understanding of the potential
Investment for Australia and New Zealand,
power their voices could wield.
Alexis Cheang, has a different view.
13“BY AND LARGE “The global rise of responsible
investment has really raised the bar
aware of their duties and the need to act
for a proper purpose in the company’s
INSTITUTIONAL on what is expected of investors.
Principle two of the Principles for
best interests, while complying with
continuous disclosure obligations.
INVESTORS Responsible Investment requires
However, she says shareholder
HAVE BECOME signatories to demonstrate ‘active
activists can have a simpler
ownership’ through constructive
objective - driving change on an
INCREASINGLY engagement with companies and
informed voting. The difference
issue they are passionate about.
ACTIVE OVER between ‘shareholder activism’
and ‘active ownership’ is subtle
“The Australian regulatory environment
is activist-friendly. For example,
THE PAST but important,” she said. just 100 shareholders have a right
20 YEARS IN “In my view, ‘activists’ typically have a
specific and near-term goal they are
to put resolutions to a general
meeting, requiring a lot of attention
EXERCISING seeking with companies. By contrast,
on proposals that can have very little
shareholder support,” Petschler said.
THE RIGHTS ‘active owners’ are really looking to
drive long-term sustainable value The Australian Council of
ATTACHED TO creation, by working with companies
to address material environmental,
Superannuation Investors describes
the current climate as a rise in activity
THEIR SHARES” social and governance issues.” driven by increasing expectations
both by investors and regulators.
Research Director Martin Lawrence. According to Cheang, most
companies are hungry for The Council’s Executive Manager,
shareholder engagement. Governance and Engagement, Ed John
advises members that it’s valuable to
“The ASX Corporate Governance
have engagement between investors
guidelines require companies
and the companies they invest in.
to disclose material risks around
environmental, social and governance “Our members own on average 10%
(ESG) issues. And ASIC has really of most ASX companies - there’s
increased the heat on companies’ a shared interest by investors and
obligations to respond to and report on executives in the issues. It’s not
actions in response to climate change.” combative,” John explained.
“However, many listed companies tell Previously, boards would be the
me investors aren’t asking them about last to find out about the issues
these issues, or they are not clear on and concerns of their shareholders.
what information is most valuable to However today, it would be hard
investors. So communicating clearly to plead ignorance given last year
with companies on what information John held around 300 meetings with
is ‘decision-useful’ to investors representatives of over 200 companies.
is critical,” Cheang explained.
“Most (companies) value the dialogue
According to the Australian Institute and input when dealing with long-
of Company Directors, shareholder term investors. I think there’s
activism is on the rise in Australia increased interest by the funds to
and in comparable jurisdictions, engage, and a greater interest from
representing an important issue for boards to understand shareholders
listed company directors.The Institutes’ better. So it goes both ways.”
General Manager, Advocacy Louise
Petschler says directors are very
14 | FIRESIDEJohn is convinced this kind of
active dialogue is an effective
way to achieve results.
“The fundamental thing is how
companies are addressing the issues;
are positive changes being made?
ADVICE TO
Are the risks being dealt with?” INSTITUTIONAL
The AICD’s advice to boards
is to engage in proactive and INVESTORS:
ongoing engagement with
shareholders and stakeholders.
“Having strong engagement VOTE YOUR
approaches and scans of emerging SHARES.
issues help boards plan and respond You have rights…
to different stakeholder and activist
interests,” Petschler advises.
use them.
“The most important thing for
boards is to maintain a considered,
informed and reasoned view – BE PREPARED TO
consistent with the high expectations VOTE AGAINST
and duties the community (and MANAGEMENT.
law) place on directors. “ Especially if you’ve
But Lawrence says corporates aren’t communicated
the only ones having to change
your concerns.
the way they communicate with
their shareholders – the same
applies to the super funds.
“Be prepared for scrutiny - it’s
COMMUNICATE
coming. If you are already looking WITH THE
at this stuff in a genuine way - start COMPANY WHEN
telling people about it. If you’re YOU VOTE AGAINST
not looking at it – either have the
courage to say we don’t care – or SOMETHING.
start. Don’t attempt to treat it as a The next time
marketing problem,” he advised. they come around
“If you’re a super fund that gets maybe and talk to their
5 member queries a week that are shareholders, they
outside general questions about
will put you on the
specific accounts, and suddenly you
get 300… Be prepared to answer list of who to talk to.
questions from your investors and
yourself about what you’re doing
around climate change.” ■
F I R E SI D E | 15
15OUR MAN IN
AMERICA
Former Senator Arthur Sinodinos
is Australia’s new US Ambassador.
Lahra Carey spoke with the
influential Australian about
how he plans to tackle
this new challenge.
16 | FIRESIDEA fter four decades working in politics
and Government, Arthur Sinodinos isn’t
fazed by the idea of negotiating his way
Bush) got everybody to hold hands and
Condoleezza Rice said Grace. And she
prepared the margaritas. I think I only had
around Washington. For the career public one because you don’t want to get drunk at
servant-turned politician, working out how the presidential retreat.”
to get a deal done is second nature.
To get to Texas, Sinodinos flew with the
“I think part of it is working out who are the Presidential team aboard Air Force One.
influencers. Who are the people who can
“If you’ve ever seen the Harrison Ford
push buttons and get things done?” he said.
movie Air Force One, it’s exactly like that.
“The jobs I’ve had over time have often
“The plane had its own version of presiden-
been jobs where I’ve needed to work out
tial mints and other sorts of memorabilia,
what are the crunch-points. Who needs to
a lot of which is sitting around various
be persuaded to do this? What is their agen-
people’s homes in Australia with the
da? And by listening intently, (I can) work out
Presidential seal on it,” Sinodinos revealed.
exactly what it is that someone wants and
what it is that we can do for them.” To prepare for his new challenge, Sinodinos
attended some intensive Ambassador
He’s had plenty of support, primarily from
training and stakeholder consultations
former US Ambassador Joe Hockey whose
across Australia where he was taught how to
advice to his replacement was: “You can’t
run a mission and how to look after his staff.
do everything, so prioritise and particularly
put a focus on the relationship with the “One of the more interesting things we did
senior players in Washington, whether it’s was work out the protocol when you’ve
in the White House or the Congress.” invited a senior person from the host
country to dinner, and we have visitors from
Similarly, Australian Prime Minister Scott
Australia, and you work out exactly who
Morrison – who has a good personal rela-
to put next to who. It was reminder that a
tionship with US President Donald Trump
lot of diplomacy is about protocol and how
- reminded Sinodinos that the job of a
you relate to people, how you conduct a
diplomat is all about personal relationships.
relationship.”
“That also means being able to deal
Sinodinos refers to himself as an “acciden-
with people in a social setting – to have
tal politician” who studied economics at
the network and get people in a setting
university in Newcastle, and ended up in
where it’s not formal, it’s not all based on
Canberra where there were more jobs
regurgitating a set of talking points, but it’s
for economists.
developing a relationship and making clear
that for us, this is not a one-night stand.” “I didn’t spend my teens dreaming about
becoming Prime Minister, and at universi-
Sinodinos got to witness this philosophy
ty I didn’t get much involved in university
firsthand while working with former Prime
politics. I just wanted to get my degree, and
Minister John Howard, when the pair were
get into the workforce. But I did like news,
Photo credit: Toby Peet
invited to stay with former US President
current affairs and politics. And when the
George W Bush at his Texan ranch.
opportunity came up at the finish of my
“We had dinner with him - Condoleezza degree, I actually wanted to apply what I
Rice was there – there was only about 10 learnt to solving real-world problems, and
of us at the dinner. He (former President public policy was a good way to do that.”
17“YOU CAN Sinodinos’ career saw him become one
of those rare politicians who went from
“I think what’s happened over the
summer here (in Australia) has been
BE FOCUSED back-room advisor to front-line politician, a bit of a tipping point for people in
ON HIGH- initially as Tony Abbott’s shadow the sense that it’s brought the issue of
parliamentary secretary in opposition – climate change, resilience, and mitiga-
LEVEL THINGS and then the country’s assistant treasurer,
and even later, the Minister for Industry,
tion, front of mind because it’s had an
impact not just in isolated areas, but in
BUT THEN A Innovation and Science under Malcom a more national sense, and it’s had an
PARTICULAR Turnbull’s leadership. international dimension,” he observed.
CONSULAR “The challenge when you go from back
room to front room is to remember that
“We’ve got to make it clear to people
that the fires are not ongoing and that
MATTER CAN when you’re in the back room, you give it’s going to be OK to visit the place
BECOME THE
people advice and it’s their responsibility and how we’re learning the lessons of
to take it. When you’re in the front room, what’s happened.
FOCUS OF MEDIA you’re the one who’s receiving the advice
and often you hesitate that one second
“I think part of my job is to explain to
ATTENTION, more before you open your mouth
other people that we are moving on –
that we’re going to be doing more, and
AND THAT THEN because you know once you’ve said it,
it’s out there, it’s gone, and you can’t get
this takes time,” he reasoned.
BECOMES A BIG it back.” Sinodinos is confident this narrative
THING THAT HAS As part of the Embassy’s function, Australia
will cut through.
“Americans like the story of redemp-
TO BE SORTED.”
has a major consular presence in the US to
provide consular services and assistance tion and regeneration and I think we
to Australian citizens. And this is where can demonstrate that.
Arthur Sinodinos Sinodinos hopes his experience on the
“It’s a matter of educating people
frontline of Australian politics has prepared
that we’re getting the message, we’re
him well for managing issues that can arise
getting on with things changing and
without warning.
it’s safe to come and see the country
“You can be focused on high-level things and we’ll look after you.”
but then a particular consular matter can
It is this same strategy of education
become the focus of media attention, and
Sinodinos plans to employ in relation
that then becomes a big thing that has to
to the triangular relationship between
be sorted.”
Australia, its alliance partner the US,
He’s confident he will be able to manage and its important trading partner, China.
these situations when the time comes.
“It’s a big relationship for Australia - we
“Conceptually I’m ready for it but don’t they get a lot out of it, and it’s how we bal-
say battle plans survive right up until the ance the two. It’s helping Americans in
stage that you actually go into battle – and positions of influence and power to
then you face the reality?” understand the more nuanced approach
that we take to these sorts of thing.”
Sinodinos may be tested sooner than he
expected, given the likely first item on the According to Sinodinos, playing
PR agenda is the issue of Australia’s per- favourites is a zero-sum game for
ceived inaction against climate change. Australia and the region.
18 | FIRESIDE“We don’t see this as an either/or.
We want a China that is prosperous.
We think that’s good for China and
good for the world and it’s important
for global stability.”
However, despite his confidence
that Australia can play a positive
role in enhancing understanding, he
accepts that it will be an enormous
challenge.
“It feels harder now because China
has made a more overt tilt towards
authoritarianism and taken the
system in a direction I don’t think
we were quite expecting. I think
there were some people who were
expecting China would evolve into
some form of Taiwan or Singapore on
steroids. But it’s developed in a
different way and whatever the ulti-
mate outcome of that, the challenge
for us is to keep engaging them.”
Sinodinos is a man who deeply un-
derstands the value of life after being
diagnosed with stage 4 non-Hod-
gkin lymphoma in 2017.
“When I was first diagnosed I tried
to be optimistic because the doctor
said the prognosis was good. It was
a stage 4 so it was pretty aggressive,
but I never at any stage that I thought
my life was about to end.”
He confessed that his main concern “He was a bit angry about the illness “Try your hand at things. Take risks
was not being around to see his two because he thought it might have been around jobs, around relationships.
younger children – now aged seven brought on by the stress of my job, or Don’t hold back. Don’t allow the voices
and nine - grow up. being in the public eye. He was the in your head to keep telling you, ‘don’t
“That was the toughest bit, feeling most sensitive about it and probably the do this’. Sometimes you’ve just got to
as if I’m not going to be around to one affected the most. But he’s pretty plunge in there and get on with it,”
support the family. That was hard. good now.” he urged.
I didn’t really think about my Sinodinos is moving the whole family “I think the other thing is to be able
achievements or what I’ve done.” with him to the US, taking his own to look back and say I had a go and
Sinodinos’ 18-year-old son Dion took advice to appreciate the precious and whether or not I succeeded, I’ve got the
the cancer diagnosis hardest. finite nature of life. satisfaction of saying that I had a go.“ ■
19IS THE
MBA
DEAD?
The proliferation of
MBA degrees has left
some in the industry
wondering if those once
highly-prized letters are
losing their lustre. Alison
McClelland speaks to
the experts to find out
what’s next for the MBA.
20 | FIRESIDEY ou know a seismic shift is
occurring in business education
when applications to the world’s
Developed in consultation with business
industry partners, the course continues
to offer traditional core subjects across
oldest and most prestigious MBA finance, marketing and human resources,
provider continue to fall. but focuses on technological disruptions
that are transforming modern business
Harvard Business School, birthplace
models.
of the Master of Business Administra-
tion and still the top-ranked institution Specialist teachers from the university’s
according to the Financial Times MBA engineering and IT faculties and indus-
global rankings, has lost more than try partners such as Amazon provide
1100 applicants for its two-year full-time experiential scenarios to teach students
course in the last two years, a fall of how to create value out of engaging with
more than 10 per cent. digital technologies such as AI, big data,
machine learning, robotics and drones.
It’s not alone. A large number of other
prestigious business schools are also And unlike traditional MBAs, the
reporting a drop in demand for MBA curriculum is reviewed and amended
courses, with some shuttering their every year to reflect students’ interests. Associate Professor Natalia Nikolova
doors on full-time MBA offerings and
“This is very new for the Australian MBA
joining the growing ranks of schools
market. There are some
going online.
leading universities in the US and things like the ability to solve complex
Associate Professor Natalia Europe that have gone down this path, problems, to think critically, think creative-
Nikolova believes the post-graduate such as Stanford and IMD in Switzerland, ly through challenges and opportunities,
masters education sector is ripe for but when we introduced the program it to lead teams and be a good collaborator,
disruption, and must modernise to was very new,” Professor Nikolova said. the ability to communicate to an audi-
remain relevant to both students and ence, to work in an inclusive way with
And while digital technology is now cen-
employers. a diverse group of people, and to lead
tral to MBA curriculum, Nikolova worries
teams and get buy-in for transformation.
Professor Nikolova oversees one of that technological advances enabling a
Australia’s newest and most progres- proliferation of online-only MBAs will only “These skills can’t be developed in an
sive MBAs, a one-year Advanced further tarnish the MBA’s reputation. online environment because they are
MBA at the University of Technology human-based skills. You can only develop
“Online-only MBAs are just for the letters
Sydney offering a “blended learning them if you involve students in a human-
only,” Professor Nikolova said. “MBA
experience” of online study and class rich interaction with each other, and
programs that are fully about knowledge
workshops. industry partners coming into the class to
transfer without that human aspect are
run workshops.
“When we were designing the not delivering what an MBA is about. For
course we were thinking all the an MBA to continue to be relevant and “Even getting frustrated with each other,
MBAs seem to be very similar in the evolve, the program has to focus on the or getting excited – it’s the emotional
way they are structured and in terms skills development. Content is important, aspect that plays a really big part in
of the content they are providing. but you can get content from anywhere; learning.”
So we wanted to come up with an you can get content from Harvard without
While not ready to pronounce the MBA
innovative program focusing more on going to Harvard.
dead just yet, Professor Nikolova believes
future work skills, focusing more on
“What an MBA is really about is the ability the degree - particularly in its more
the changing needs of learners and
to do things. It’s all about skills, key skills traditional format – is edging closer to life
employers,” she said.
that are relevant for a manager or leader; support.
21“Looking to the future, I don’t think the
MBA will remain the critical degree that
it is today. I think we are moving to a
future where programs will be offered
in bite-sized chunks of micro-learnings
“A REPUTABLE
or micro-credentials; so you can go and MBA DOESN’T
do three or four micro-credentials and
then the next year you do a few more
SET YOU UP
and then the next year you put them FOR LIFE. IT
together and you end up with a bundle
that an institution then gives you a cer- MIGHT HELP
tificate that says you now have a certain TO INITIATE
YOUR NEXT
degree,” she said.
“And I don’t know whether it will even
be so important to have a degree. I CAREER
think what will be more important is to
demonstrate you are a lifelong learner,
MOVE BUT
that every year you are focusing on a YOU NEED
couple of new areas or skills that you
need to master for your current job or for
TO THINK
transitioning.” LONGER-TERM”
Mercer partner Ephraim Patrick says a
Ephraim Patrick
shake-up of the post-graduate sector is
welcome.
Working with clients globally and in
Australia in the areas of people strategy,
analytics and organisation design, Pat-
rick sees a need for MBA degrees to be
more nimble and reflect the disruption
being felt across many industry.
Like Professor Nikolova, he believes “A reputable MBA doesn’t set you up delineations now in the way MBAs are
there will be a shift away from a single for life. It might help to initiate your next designed and delivered, the degree
degree to more “targeted learning career move but you need to think itself becomes a little bit like the by-
interventions“ like micro-credentials to product. It’s actually about the learning
longer-term and understand inflection
create “stackable” degrees that better journey that people need to be able to
points in the future where you need to
reflect job requirements and an individ- leverage and essentially sell rather than
reenergise and reinvent yourself as part
ual’s need for continuous growth and a degree.”
learning throughout their lifetime. of a life-long learning journey. So I don’t
think it’s a once in a life kind of invest- And while no longer a “major differenti-
While the letters were nice to have, ment degree; I don’t see any structured ator”, Patrick, who lectures at the UTS’s
a demonstration of a commitment to Advanced MBA and holds an Executive
learning like that,” he said.
ongoing learning and applying skills MBA, believes the MBA still holds value
acquired in real world context are more “MBAs have been around for such forthose knocking on the executive
important, Patrick said. a long time and there are so many management door.
22 | FIRESIDE“If you look at corporate websites
and the About Us page, many of the
“It’s incredibly powerful when the re-
search you are studying validates your “I ALWAYS
executive leaders will have an MBA,” thinking and your reasoning. It gives SAY TO MBAS
I WORK WITH,
he said. you a confident voice around the
boardroom table, around a meeting
“I would say the degree doesn’t get
you there, but it can be a ticket that
table, and empowers people to back
their ideas, their solutions and their
DON’T TELL
helps you to belong to a club.”
approaches with evidence,” ME YOU’RE AN
Libby Marshall, managing director of
the Australia New Zealand MBA Direc-
Marshall said.
MBA, SHOW
tors Forum, says the democratisation
And just as graduates now must work
harder to differentiate their value in ME YOU’RE
of MBAs through the advent of online
study means graduates must now
the workplace, increased competition
among education providers is
AN MBA.”
work harder to separate themselves Libby Marshall
motivating schools to adapt at a
and stand out from the MBA pack.
faster rate.
Her business, Steam Capital, does just
“There is a need for MBA education to
that, coaching MBA, Masters and PhD
be nimble, be flexible, be attuned to
graduates so that they define their
the current trends in business and
unique value proposition and connect
I think that is one of the biggest
to a global network of employers.
challenges business schools around
MBAs in Australia
“I would never say that an MBA will the world are facing, with some • The Australian MBA market is
super-charge your career. The person moving faster than others,” she said. worth $500 million a year
who is doing the MBA, they are in • More than 35 universities and
Despite all the challenges and
charge of their career. The MBA will private providers offer an MBA
disruption, Marshall remains a strong
give you a competitive advantage, but degree
advocate for the MBA and doesn’t
only if you allow it to. The piece of pa-
believe it’s going anywhere just yet. • More than 30,000 students are
per is just that - you have got to make
currently completing an MBA
it work for you and only the individual “I always encourage people to do
can do that,” Marshall said. their MBA because it brings together • There are more than 110
the whole suite of disciplines and so different MBA courses
“I always say to MBAs I work with, available
much more. The analytical skills you
don’t tell me you’re an MBA, show me
learn and the in-depth learning on • The average cost of an MBA in
you’re an MBA; show me how you are
modern-day leadership approaches Australia is $58,384
thinking differently, show me how you
are highly sought in this day and age, • The most expensive degree is
are analysing differently, show me
particularly in a highly competitive, Melbourne University’s Senior
how you are coming up with solutions
global age,” she said. Executive MBA ($126,000)
that matter and that will have the out-
comes we are looking for.” “I would never say people can’t get and the least expensive is
to the top without an MBA, but in CQUniversity’s online MBA
Marshall, who holds an MBA from (Leadership) at $17,000
this world now, one that is rapidly
University of Queensland, believes the
changing with increased complexity • Up to 80 per cent of students
MBA experience creates valuable net-
and ambiguity, having an MBA in some MBA courses are from
works for students and provides unique
definitely gives you a competitive overseas.
learning experiences, giving them the
advantage, but only when you Source: MBA News
confidence to feel they qualify for a seat
allow it to.” ■
at the decision-making table.
23CHANGING
THE FACE OF
LEADERSHIP
The days of ‘my way or averaged stock price growth of
204 per cent and net income growth of
Her services are usually called upon
when organisations fail to see change
the highway’ leaders 841 per cent over 10 years. despite “ticking all the boxes”, or when
boards or executive teams need help
could be numbered, with So, if the numbers are in, why isn’t
adapting the approach among senior
everyone doing it?
more businesses seeing management, or as Murphy refers to it,
Lack of time, money and awareness are “the asbestos layer that can be resistant
the benefits of thinking just some of the reasons according to to change”.
outside the box, reports Dr Jess Murphy, who holds an Adjunct While many organisations claim to have
Professorship in Business Leadership
Alison McClelland. and provides consultancy services in
robust policies promoting inclusivity,
Murphy argues that they’re not worth
leadership, talent and inclusion domains. the paper they are written on if they are
If gender and cultural diversity were After carving out a successful career in a “tick and flick” approach that fails to
the business buzz words of the last banking, Murphy started her own con- effect meaningful behavioural change
decade, ‘inclusive leadership’ is shaping sultancy to help organisations globally throughout the organisation.
up to be the next focus for companies address leadership capability, with a “You might have difference sitting
looking to gain a competitive edge. focus on inclusion. Her inclusive leader- around table, but it’s not enough until
ship experience challenges senior you learn how to involve that difference,”
Data is gathering at pace to show that
leaders to step outside their comfort Murphy said. “What more mature organ-
organisations championing inclusivity
zone to foster talent with a difference. isations are realising is that to actually
from the top down are reaping the social
and financial rewards. “Statistically, if you look at corporate create the change required, you need
Australia it is predominantly led by Anglo, to engage leaders front and centre; they
Deloitte reports that teams with inclusive need to be actively involved, getting
older white men. What we are trying to
leaders were 17 per cent more likely to be their hands dirty so to speak, to believe
do is build their confidence and capability
high performing, 20 per cent more likely in this both with their head and their
to be able to spot talent who are differ-
to report making high-quality decisions, heart, rather than outsourcing to HR.”
ent to them in terms of background and
29 per cent more likely to behave collab-
experience, and build their capability to The inclusive leadership experience
oratively, and had lower absenteeism.
engage with them differently to how they typically starts at the executive level,
For bosses more interested in the would normally engage with someone involving a behavioural mapping
bottom line, research by Richard Roi with a similar background or similar tool and “listening and learning”
found leaders with inclusive attributes experiences to them,” Murphy said. feedback sessions with colleagues
24 | FIRESIDEand team members. The results can “It’s not a normal HR initiative; this can National managing partner David Lin-
be confronting. Participants receive be quite profound,” Walker said. “This ke, who is responsible for about 1600
feedback on how they are perceived has provided another lens for our partners and staff, said the high-pres-
by others and both conscious and leaders on some of the areas for sured and “transactional environment”
unconscious biases that exclude improvement, and how we can do of the business was often antithetical
different perspectives. that together.” to inclusiveness.
“It’s always mind blowing for leaders. Walker said the program had connect- “We needed to change in terms of how
You hear them say, ‘I had no idea that ed more than 200 people within the we get the best out of our people,”
people feel this way; this is stuff we can organisation through the “listen and Linke said. “We don’t lose talent if they
easily fix’,” Murphy said. learn” sessions held between leaders feel included and listened to and they
and staff. One common challenge get the opportunities they desire. It’s
“You don’t need to be an expert to be
raised in discussions was the need to not just important as a financial matter,
an inclusive leader, you just need to
improve connection with project teams it’s important to the overall health of
listen and ask questions, and walk in
working remotely on client sites. the business.”
there with no judgement and under-
stand that your perspective is just one As a result, the leadership team has Despite being met with some initial
of many that are equally valid.” improved its communication channels scepticism about yet “another HR
and committed to creating more “touch program”, Linke said the partners were
In an increasingly globalised business
points” with off-site project teams. quickly convinced after “some lightbulb
landscape, acquisitions are another
moments” regarding their impact
prompt for organisations to seek help “I think it’s a two-fold return. There is
on others.
in bridging competing cultures and the personal return of being a better
leadership styles. leader in the organisation, and sec- “You don’t appreciate in these
ondly, seeing improved engagement leadership roles, what a potentially
It was an issue that digital and cloud
and connection to our employees. long shadow you cast,” Linke said.
IT service provider Avanade faced
We‘re asking people to invest their “The lightbulb moment for our partners
after the recent acquisition of a
careers with us and we want them was realising the impact they can have
digital business.
to see Avanade as a progressive on both their team and on each other
Recognising there would be organisation that values inclusion and when they interact.
challenges in blending a highly-nimble diversity, and does something about
“Understanding different perspectives
boutique digital agency within a large it,” Walker said.
and awareness of our impact on others
multinational corporate culture,
Staff retention and wellbeing was is the first important step of building an
25 of the combined leadership group
also a factor for KPMG committing to inclusive leadership model.”■
undertook an inclusive leadership
inclusive leadership training for 160
experience, including Avanade Growth
partners across its deals advisory, tax
Markets Chief Operating Officer
and legal businesses.
Dion Walker.
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