Cover image courtesy of Qantas
Governance failures rarely arrive all at once. More often, they build slowly through weak oversight, concentrated power and boards that stop asking the questions they are there to ask. That is part of why Qantas surfaced so often as a case study while I was completing the Australian Institute of Company Directors Course recently: it offered a vivid, contemporary example of what can happen when board oversight weakens.
Governance is also especially relevant in racing right now. Across Australia, three state frameworks - Western Australia, New South Wales and Queensland - are either under active review or are implementing reforms, placing renewed focus on how the industry is structured, regulated and overseen.
At the centre of those statutory frameworks sit governance: boards and controlling bodies established under legislation, entrusted with administering and regulating, acting in the interests of the industry as a whole and safeguarding integrity, sustainability and public confidence.
Qantas is an interesting corporate governance case study because, for years, the airline appeared untouchable as one of Australia’s strongest brands. Under chief executive Alan Joyce, Qantas delivered strong profits and returns to shareholders, navigated global crises and maintained an image as one of the country’s most strategically important corporations.
Alan Joyce | Image courtesy of The Pinnacle Foundation
Yet beneath that success, a different narrative was quietly building - one documented extensively in the reporting of Joe Aston via the Australian Financial Review and later compiled in his book The Chairman’s Lounge.
It is a narrative about power, governance and the slow erosion of institutional accountability, that any organisation or industry can learn from.
The Qantas journey
For much of Joyce’s tenure, Qantas was treated as a corporate success story. He became chief executive in 2008 and remained in the role for almost 15 years, an unusually long run for the head of a major listed company. But by the final phase of that era, the story had shifted from strategic dominance to institutional strain.
The pressure points were not abstract. Qantas was running an ageing fleet - about 15 years on average by 2023 - while still presenting finances reflecting top-quartile shareholder returns. Its own disclosures showed the A330 fleet would be about 21 years old by the time replacement began in FY27. That is what deferred investment looks like in practice: the annual reports can still read well, returns can still be emphasised and executive incentives can still be defended, even as the asset base and infrastructure ages.
Its treatment of people had also become a major part of the Qantas story. In 2023, the High Court unanimously upheld findings that Qantas had unlawfully outsourced around 1,700 ground handling jobs - a decision that contravened workplace protections. Then in 2025, the Federal Court imposed a $90 million penalty over that conduct.
Customers, meanwhile, had their own reason to revolt. The ACCC’s “ghost flights” case alleged Qantas sold seats on more than 8,000 flights it had already decided to cancel and failed to promptly notify affected passengers. The Federal Court later imposed $100 million in penalties, plus about $20 million in remediation. Even complaint handling became a symbol of the decline, with Qantas taking almost 100 days on average to resolve customer concerns in 2023.
There was also the question of influence and narrative control. The airline’s role in the Qatar Airways capacity saga triggered a Senate inquiry and sharpened public scrutiny of Qantas’ lobbying power, political access and ability to shape the national conversation around aviation policy.
By that point, the issue was no longer simply whether Qantas had made some bad calls. It was whether a company that had become highly effective at managing its position publicly had been far less disciplined in confronting the underlying weaknesses building inside the institution.
That is what makes Qantas such a potent corporate governance case study. The board’s 2024 governance review later acknowledged failings by both management and the board, including that customer, people and reputational issues had not been sufficiently prioritised. It also described a leadership environment shaped by an “experienced and dominant CEO”.
What looked for years like strong leadership and message discipline came to be seen, in hindsight, as a period in which oversight softened while strains deepened. The board itself later acknowledged it had needed to respond more quickly to the early warning signs.
The rise of the untouchable Joyce
Strong chief executives are not unusual in corporate Australia - in many organisations they are essential.
Governance frameworks are designed to ensure that executive power sits inside oversight. Boards exist precisely so that no single individual becomes the centre of gravity for an entire institution. When that balance shifts, warning signs tend to follow.
In the Qantas case, critics increasingly pointed to a leadership culture where the chief executive’s authority appeared to eclipse the independence of the board. Strategic decisions, media positioning and political engagement became closely associated with the personality and influence of the CEO himself - a dynamic later echoed in the board’s own governance review, which found a ‘command and control’ leadership style.
The review found that this top-down culture affected empowerment and a willingness to challenge or ‘speak up’ on issues of concern.
Over time, the public identity of the airline began to merge with the personal authority of its chief executive. That dynamic can be powerful when things are going well, but it carries a structural risk: institutions built around personalities become vulnerable when scrutiny intensifies.
At Qantas, Alan Joyce served as chief executive for almost fifteen years - in modern corporate governance terms, that is exceptionally long. Recent Australia data has the average CEO tenure at about 6.3 years.
Stability in leadership can be valuable. Long-serving executives accumulate deep institutional knowledge, strong stakeholder relationships and a clear understanding of the organisation’s strategic direction.
But tenure can also carry a subtle governance risk.
Over time, the relationship between boards and powerful chief executives can evolve as directors come and go. The executive, meanwhile, remains the constant presence - the institutional memory, the public face and often the dominant strategic voice.
That dynamic was visible at Qantas. By the final years of Joyce’s tenure, the airline’s strategy, public messaging and political engagement had become closely associated with the authority of the chief executive himself. Aston’s work describes an organisation where early habits of internal challenge - including the use of a ‘devil’s advocate’ in decision-making - had faded over time.
The board remained formally in charge, but the centre of gravity inside the organisation had clearly shifted.
When the controversies of 2023 began to converge - regulatory action, customer backlash and political scrutiny - the question was no longer simply about management decisions. It was whether the board had remained sufficiently independent to challenge a leader who had dominated the institution for well over a decade.
The quiet retreat of board oversight
Corporate governance theory assigns boards a clear role - directors are not there to run the organisation day-to-day, but to challenge it.
AICD teaches that boards ask uncomfortable questions, test assumptions, interrogate long-term strategy, capital allocation and organisational culture. When boards stop doing that, whether through loyalty, inertia or excessive confidence in management, accountability slowly weakens. As the Qantas governance review itself put it, what was needed was ‘more robust debate and deeper examination of options and risks’.
Qantas Board | Image courtesy of The Sydney Morning Herald
In the years leading up to the airline’s reputational crisis, critics increasingly questioned whether the board had become too deferential to management. Qantas continued to generate strong financial outcomes, but tensions were emerging elsewhere: operational complaints, public frustration with customer experience, and growing scrutiny from regulators.
None of these developments alone signalled institutional failure but collectively they hinted at a governance system that was becoming less willing, or less able, to apply internal pressure.
The warning signs
Institutional crises tend to be preceded by a cluster of signals that, in retrospect, appear strikingly obvious.
Among the most common are concentration of authority around a single executive, boards that publicly reinforce management rather than challenge it, aggressive management of media narratives, critics portrayed as “trolls” or hostile outsiders, and growing frustration among customers.
In the Qantas story, many of these elements were present long before the broader public backlash emerged.
Journalists, regulators and consumer advocates had begun raising questions about operational decisions and customer outcomes. Internally, the airline’s brand - once synonymous with reliability and national pride - was starting to face reputational strain.
Yet the institutional response often appeared focused less on confronting underlying issues than on managing the narrative surrounding them.
This is not unusual. Institutions under pressure frequently respond first through communication rather than structural reform. However, narrative control has limits.
Eventually, the protective narrative surrounding an institution can fracture. The Qantas saga reached this phase when legal action, consumer frustration and sustained media reporting converged to challenge the airline’s carefully maintained reputation.
When that happens, the shift in public perception tends to be sudden. Within a remarkably short period, the governance conversation shifted from admiration of executive leadership to questions about Qantas’ board responsibility.
Directors who had long stood behind management now faced a different question: whether they had exercised sufficient oversight in the years leading up to the crisis. Once that question took hold, the conversation moved rapidly from confidence to accountability.
The cost of passive governance
Corporate governance failures are rarely confined to reputational damage alone, instead, they reshape trust. Customers question the institution, employees question leadership and regulators begin examining structures that previously attracted little attention.
Most importantly, the credibility of the board itself becomes the focus of the story.
This is why governance scholars often describe board independence not as a technical requirement but as a cultural one. Effective oversight depends less on formal rules than on the willingness of directors to challenge power when necessary.
Where that willingness erodes, institutions can drift into a dangerous imbalance where strategic authority becomes concentrated in a single executive voice. History suggests that once that imbalance takes hold, the eventual correction can be abrupt.
The lesson from Qantas was not simply that one chief executive became too powerful, but that a board can slowly lose the habit of governing while still believing it is in control. It can defend the story while neglecting the structure beneath it, and reward performance while failing to interrogate the condition of the institution itself.
By the time the Qantas reckoning came, the question was no longer what management did, but why the board allowed it to become normal.
The reckoning eventually reached both the chief executive and the board. Alan Joyce departed Qantas abruptly in September 2023, bringing forward his retirement as the airline faced mounting regulatory action, customer backlash and political scrutiny.
In the months that followed, the company commissioned a governance review, cut millions from Joyce’s final remuneration and began a program of board renewal that saw chairman Richard Goyder step aside and new directors appointed. Qantas also broadened its remuneration framework to place greater weight on customer outcomes and reputation.
The Qantas case will now be studied for years in business schools and governance reviews as an example of how quickly the balance between leadership and oversight can shift.
