Crikey published an excellent piece last week examining whether a corporate board would tolerate the ordinary performance being delivered by Scott Morrison and his underwhelming cabinet.
The comparison is not perfect given that corporate boards have a majority of independent non-executive directors holding the CEO to account, whereas the Morrison cabinet is effectively an excessively large board full of non-independent executive directors reporting to an overly powerful executive chair.
The Liberal Party gives its executive chairman prime minister all the power to hand-pick his cabinet, and he can be removed only by a majority vote of no confidence in the partyroom.
This is very different from a corporate board such as BHP or CSL where the independent part-time chairman can be replaced by the other directors by a simple majority vote at any board meeting. The board can fire the CEO at any time, subject to contractual terms, and shareholders can remove directors only when they come up for election every three years.
Another variation on the theme can be seen in the governance arrangements at Tennis Australia where all-powerful and long-serving CEO Craig Tiley is seemingly not being held to account by a part-time board comprising six democratically elected state- or territory-nominated directors, supplemented by three skill-based independent directors selected by the board.
TA’s governance arrangements are unique because Tiley started out as tournament director of the Australian Open but after then deputy chairman Harold Mitchell led a coup against long-serving CEO Steve Wood in 2013, he assumed both titles.
Tiley has lifted prize money from just $26 million in 2012 to a record $75 million this year, exceeding the 2021 US Open ($69 million), Wimbledon ($67 million) and Roland Garros ($59 million).
No wonder Tiley is popular with the players — and therefore perceived as risky to sack.
What if the South African was suddenly hired by the German Tennis Federation to coordinate a bid to have Germany attempt to lure the fourth grand slam away from Melbourne in a player-backed revolt led by Novak Djokovic, who raised the prospect of Australia losing the open in his legal correspondence with the Morrison government?
This would be an absolute long shot given the four grand slams have been played in Melbourne, London, Paris and New York for many decades.
The Victorian government has a contract to host the Australian Open until 2039, a deal which gave it the confidence to invest more than $1 billion into the publicly owned Melbourne Park facility — which is in stark contrast to the other three grand slams which are played at private clubs.
Tiley has often talked up the risk of Melbourne losing the Open or being hit by a sudden no-show of top players, although this has been discounted by the likes of The New York Times‘ tennis correspondent Ben Rothenberg.
Victorian Premier Dan Andrews is right that the Australian Open is far bigger than any individual, and in light of this it probably is time for Tiley to be relieved of his duties before the 2023 Australian Open given the mishandling of the Djokovic situation.
The nine-person TA board has been Kremlin-like with its minimalist media engagement over the past month but it does have enough heavy hitters sitting around the table to ensure a full, professional post mortem is conducted once the last player has left town.
This includes two American females who adopted Australia pursuing corporate careers — namely president Jayne Hrdlicka, who has the tough day job of CEO of the private equity-owned Virgin Australia, and Diane Grady, who sits on the Macquarie Group board and previously served Woolworths, Lendlease and Goodman Group. The other heavy hitter is former Perpetual CEO turned Australian Institute of Company Directors and Stockland chair Graham Bradley.
Hrdlicka has moved to Brisbane to run Virgin and after almost five years in the TA chair, probably should be considering handing over, although her predecessor Steve Healy did seven years and university statistics lecturer Geoff Pollard served 20 years before that.
Given that TA is now effectively in the hands of its state sponsors — courtesy of a $40 million loan from the Victorian government extended in February last year — the state government will be influential in determining the fate of both Tiley and Hrdlicka, who delivered a joint report at the front of last year’s annual report.
The financial report, starting on page 29, made for particularly stark reading as Tennis Australia depleted its $80 million in reserves and ran up $41 million in debt in 12 months.
Perhaps 2022 wasn’t the year to deliver a taxpayer-funded record prize money haul, especially with ticket sales limited to 50%.
Normally when a major crisis hits an institution, the CEO and chair depart in relatively quick succession, particularly if they have both served for a considerable time.
After a five-year double act at the top, the case for change is strong, but the new chair can only be selected from the ranks of the existing directors and it all depends if there is anyone else on this board who aspires to follow Hrdlicka’s lead and sit next to Rod Laver watching big matches and deliver the key thank-you speeches after both finals.
As things stand, she and Tiley have been largely missing in action over the past three weeks, strengthening the case for change at the top.
Should Craig Tiley move on? Let us know your thoughts by writing to letters@crikey.com.au. Please include your full name if you would like to be considered for publication in Crikey’s Your Say column. We reserve the right to edit for length and clarity.
