Watch Out

Among the many news stories this week the Australia Post watch saga caught my attention. My initial response was: “Why would anyone give a second thought to senior sales executives receiving a $3,000 bonus for landing three multi-million dollar, innovative, organisation-critical contracts?” ($5,000 as it turned out but no matter). Was it just that the bonus was paid in kind that afforded an opportunity for political posturing and front-page news coverage?

The media stories made me wonder whether there was more to it than this. Was this, as Greg Rayner, Communications Union National Secretary said, “just the tip of the iceberg when it comes to the problems”? The Prime Minister got involved extremely forcefully, saying directors of public enterprises will have got his message “with a rocket”.

This at a time when Australia Post, under Christine Holgate’s leadership appears to be executing a successful pivot from postie to parcelie. Coping with a huge ramp up in demand – because of COVID – and simultaneously looking after its staff, including in Victoria’s stage 4 lockdown. AP delivers about 50 million parcels per month, 2.3m parcels on August 17th alone. All this, while Toll Holdings – no full year profit since 2014 – is being divested by its Japanese owners after a $5bn write-down, with reportedly significant cultural issues, infiltration by organised crime and widespread corruption, with only limited press coverage.

Of course, what’s happening after the watch story is that we start to hear a little more about the inside workings of Australia Post. It turns out that there were also payments for hair and makeup. There was less coverage of a thank you payment to more than 33,000 AP frontline staff of $600 for their extra COVID work, or $20m of taxpayers’ money. Probably well deserved. And plans to retrain a quarter of the motorcycle posties as courier drivers in order to retain them as staff.

Christine Holgate’s managerial style is described in some articles as “quirky” or “flashy”. But doesn’t it take a quirky person to take on utterly transforming an organisation like Australia Post, while having a legislative obligation to remain profitable?

So, what are we to make of all this? Is it just typical political point scoring based on something that happened two years ago and click bait journalism, or is it parliamentary oversight and journalists calling out inappropriate behaviour in organisations which have a duty to all of us as taxpayers.

To read the AP Annual Report is to read about an organisation that appears to take its “social license” very seriously. Their staff is heavily weighted to the lower socio-economic end of the labour force and corporate failure will expose 35,000 staff and 40,000 self-employed branch people to high likelihood of poor outcomes.

In the emerging advice profession, we are giving a good deal of thought to what ethics and values mean. We think of these issues in terms of best interest and the FASEA Code of Ethics, which in our context are framed in terms of fiduciary obligations to individual clients. But the ethical issues of “what is right behaviour?” apply in other contexts as well. AP’s four core values Trust, Inclusivity, Empowerment and Safety are obviously appropriate to them, but like FASEA’s five values, provide a basis for management of the business.

It would be a shame if the confected outrage over the watches distorts the ongoing discussion about values and right behaviour and prevents the meaningful discussion of how organisations, Australia Post in this case, financial services businesses in ours, should conduct themselves and what duties they really do owe to their stakeholders.

A few Australia Post metrics (from the 2020 Annual Report): Staff 35,000; Extended workforce 75,000; Branches 4,300; Weekly wage bill $100 million; Revenue $7.5bn; Net margin (NPBT) 0.7%; Average staff tenure 12.5 years; Items delivered annually 3.1 billion; Business assets $6.8 billion; ROE 2.3%; Staff super fund $7.6 billion.