From Eddie McGuire to James Packer: No longer ‘too big to fail’ on power?

From Eddie McGuire to James Packer: No longer ‘too big to fail’ on power?

Within hours of each other yesterday, two major news events occurred that hinted at a long awaited shift in how we view power in Australia. 

The first came from Eddie McGuire, who announced he was standing down from his high profile position as president of Collingwood Football, following a report released last week highlighting systemic racism at the club. 

He resigns after 22 years in the position. And after multiple gaffes and scandals. He conceded that while he tries his best, he “doesn’t always get it right”. He said people had “latched on” to his opening line regarding the report last week (he described the release as a “proud and historic day for the club”) and that he had become a “lightning rod for vitriol”.

“I have placed the club in a position where it is hard to move forward with our plans,” he said. 

The second event occurred as we learnt that the James Packer-backed Crown Resorts had been found by an independent inquiry as unfit to hold a casino licence in NSW.

In her findings, Former Supreme Court Judge Patricia Bergin took aim at James Packer who she described as the “real power” of Crown with “disastrous consequences”, as well as Crown chief executive Ken Barton, noting his inexplicable decisions on money laundering and other matters, and describing him as “no match for what’s needed at the helm of a casino” whose problem will “not be cured” by appointing experts around him. 

These news events are unrelated — but they both happen to involve some of the most powerful and wealthy men in Australia finally being asked to answer for their failings on leadership. 

Packer’s fate came as more of a surprise, with Commissioner Bergin’s report confirming much of what was exposed by media outlets including the Herald, The Age and 60 Minutes back in 2019: including that Crown had “facilitated money laundering”, had “disregarded the welfare” of staff in China and had done business with individuals linked to organised crime groups.

It wasn’t just that. Justice Bergin also highlighted significant corporate governance issues at Crown, a poor corporate culture and “deficient risk management structures”. She said the “real power” of the company sat with James Packer, the 36 percent shareholder. And she recommended NSW implement an ownership cap so no one investor can acquire more than 10 per cent of a casino operator without the regulator’s approval. 

The entire board is up for an overhaul, with director Andrew Demetriou also admonished for his “unedifying performance” as well as long-term Packer loyalist Michael Johnston. 

The Crown board is chaired by Helen Coonan, with The Australian today declaring she will drive a “fresh start” for Crown and the Herald Sun saying the future of the business “Rests on shoulders of one woman”. 

Commissioner Bergin said Coonan was “exquisitely aware of the depths of the problem of the company of which she is now chairman.” 

She said her review of Coonan’s evidence showed that Coonan’s “character, honesty and integrity [have] not been and could not be called into question.” 

Commissioner Bergin noted Coonan’s evidence that she said it’s important that Crown is a “compliant, ethical and responsible business”, saying that it was obvious these matters were clearly important to her personally. 

She added that Coonan “demonstrated the qualities that are necessary to have taken her into the leadership role of Crown”. But she said her “heavy reliance on Mr Barton” (the CEO described as making “inexplicable” decision was “misplaced”. “However, this misplaced reliance should not be seen as a flas in the Chairman.”

So Coonan, it seems, is very much the future of Crown.

It’s now up to the NSW Independent Liquor and Gaming Authority to determine how and whether it will act on the recommendations — meaning Crown could still receive it’s casino licence. 

But for now, it means the controversial casino building in Sydney — who actually wanted it there, aside from those who could profit from it? — remains empty of its intended purpose: gambling. It is, for now, the tallest building in Sydney, and a reminder that you can never be too big to fail. 

And over at Collingwood, there’s an opening for a new kind of leader. 

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