Pittwater Life January 2024 Issue

epeated at the following year’s
AGM, it prepares the ground for
a board spill.
Another iconic Australian
company to suffer a similar fate
at its AGM was Qantas. Qantas
copped a massive 83% vote
against its remuneration report
caused by their spat with the
media and Federal government
and the subsequent brand damage
as former CEO Alan Joyce
exited the company.
Both Woolworths and Qantas
also received criticism from a
range of stakeholders for entering
the ‘Voice’ debate as highprofile
supporters of the ‘Yes’
side. Of course, they weren’t
alone and were joined in this endeavour
by companies such as
BHP, Rio and Wesfarmers who
each contributed $2 million to
the cause. It’s a tricky business
for companies to pick sides in
what is essentially a question of
conscience with a binary win or
lose outcome; you run the risk
of upsetting a substantial portion
of your customer base.
Why spend millions on
sponsorships, charities and
causes? According to GivingLarge,
a research provider
in the area of corporate philanthropy
(whose reports ironically
are not free), the top 50 corporate
philanthropists have for the
first time topped $1.5 billion in
donations.
According to their report
dated 30 November which
also appeared in the AFR:
“Woolworths says philanthropy
is also a focus for directors.
Woolworths recorded a near
tripling of its giving program
this year, to $122 million. ‘Our
board takes a very keen interest
in our philanthropic agenda
as it is a key part of the wider
group’s purpose, in which everyone
at Woolworths Group has
a part to play. Food relief activity
is discussed regularly with
the board,’ says Woolworths
chief sustainability officer Alex
Holt. Woolworths attributes the
surge in giving mainly to the
ability, for the first time, to accurately
value the amount of
food donated to its food rescue
partners, such as OzHarvest,
Foodbank and FareShare. The
value of food donated accounted
for $76 million of the increase,
while the remainder came from
a rise in financial contributions,
Holt notes.”
Elsewhere in the report there
was insight into what moti-
The Local Voice Since 1991
vates some companies over
and above the pure marketing
effect: “The rise in corporate
giving comes as surveys show
younger employees increasingly
want to work at companies
whose values are aligned with
theirs. [Our giving program] is...
a retention tool.”
So, it’s a feel-good factor for
the staff and management. Putting
some humanity over the
top of the cold corporate bones,
so to speak. The only problem,
and it was a big problem for
both Woolworths and Qantas,
is that all the causes, philanthropic
endeavours and corporate
giving are worth nothing to
your brand when you are vulnerable
to claims that you have
been diddling your suppliers,
staff and customers for years.
Eventually, the public does
get around to seeing these feelgood
efforts by big companies
behaving badly for what they
are worth and that’s very little
unless you happen to be the
direct beneficiary of the donation
or cause.
Unless they are very large,
shareholders – ultimate owners
of the business – have little or
no access to management or
directors of corporations. In
the main they must resort to
the angry email or voting at
the annual general meeting. If
last year was anything to go
by the scorecard for corporate
Australia this reporting season
was bad, as Sumeyya Ilanbey
noted in The SMH on 15 December:
“Australian investors have
made history this year, issuing
a strike against the remuneration
reports of 32 companies,
the highest ever backlash. They
didn’t believe the performance
of companies they had invested
in justified the exorbitant wages
and bonuses of executives.”
Brian Hrnjak B Bus CPA (FPS) is
a Director of GHR Accounting
Group Pty Ltd, Certified Practising
Accountants. Office: Suite 12,
Ground Floor, 20 Bungan Street
Mona Vale NSW.
Phone: 02 9979-4300.
Web: ghr.com.au and altre.com.au
Email: brian@ghr.com.au
These comments are general
advice only and are not intended as
a substitute for professional advice.
This article is not an offer or
recommendation of any securities
or other financial products offered
by any company or person.
JANUARY 2024 59
Business Life