AFR Boss Summit: Leadership has to be authentic, big bosses say

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Patrick Durkin, Joanne Gray and John Stensholt

The chief executives of National Australia Bank and AGL Energy are embracing a more inclusive and transparent leadership style to transform their business, deal with disruption and rebuild trust with the public and their customers.

Business leaders at the AFR BOSS Leadership Summit on Wednesday took heart that their backing of the successful same-sex marriage campaign showed Canberra’s politicians that business has a good understanding of public sentiment.

Qantas CEO Alan Joyce said it showed politicians were wrong to think business had to “stick to its knitting” and speak out only on economic and business issues.

The business leaders acknowledged a loss of public trust in business that could only be re-built through better behaviour and more open, transparent and authentic leadership.

“If you want to be trusted, you need to be trustworthy,” AGL Energy’s Andy Vesey told the Summit.

“It gets down to these fundamentals. You can’t be a leader if people don’t trust you. It is only through our behaviours that they are going to get this. What they say is what they do … and they hold themselves accountable and are transparent about it,” Mr Vesey said.

“Leadership is an art … with a bit of magic sometimes”.

NAB CEO Andrew Thorburn, who announced a net 4000 reduction in his workforce two weeks ago, said that being authentic and open was key and that “love, empathy and care” was crucial following the same-sex marriage postal vote and in the transformation of his workforce.

“Respect is one of the most important things that humans can convey,” Mr Thorburn said. “One of the the things that’s been lost in Australia is the opportunity to disagree respectfully.”

Politicians let us down

Qantas CEO Alan Joyce opened the Summit by saying the same-sex marriage postal survey showed a failure in political leadership and cleared the way for business to take a greater leadership role on other economic and social issues.

“I think politicians have let us down on this one and hopefully today people will show politicians that they were wrong”, he said.

It is bizarre that politicians want us out there talking about the tax debate and the industrial relations debate, which probably have less support in the community than issues like marriage equality,” he said.

The CEO of the Australian Bankers’ Association Anna Bligh also warned that the instability in Canberra was creating greater business risk, but each sector had to get out and tell its story.

“We are in an environment at the moment where major parties are being pulled towards populist policies by political extremes and minority government is a very difficult place to be,” Ms Bligh told the Summit.

The Property Council of Australia’s head of communications Paul Ritchie said the business sector employed 10 million people daily and “should be the hero every day”.

“We have got one of the highest standards of living in the world and business is not the hero … business needs to be more vocal,” he said. “Sometimes people are going say bad things on Twitter. Get over it.”

Ms Bligh said the ABA had launched a new “Banks Belong to You” advertising campaign to explain that the banks’ $30 billion in profits are largely going into people’s superannuation funds.

“Investing in brand bank is critical, we need to tell their story much more effectively,” Ms Bligh said. Banks also have to change the way they do business.

“You can’t just advertise your way out of this and one campaign is not going to solve a very complex problem,” Ms Bligh said. “Right now we are trying to have a conversation and to get people to take their hands off their ears.”

The ad campaign was prompted by a survey conducted by Utting Research for Westpac in June which found 72 per cent of people believed less than 25 per cent of bank profits are returned to shareholders via dividends and only 3 per cent of respondents said banks pay out 75 per cent or more of their profits.

In fact, almost 80 per cent of bank profits are paid back as dividends, representing about $25 billion in 2017.

“In politics … you can often do best by hanging a lantern on your problems and one of the problems banks face is people see very large profits and [have] very low understanding of what happens to those profits.”

“We are living through the transfer of power from institutions into the hands of customers … and that power is never going back”.

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