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Volatile mix? Big three join Virgin Australia board

July 7, 2014 Appointments, Headline News No Comments Email Email

egtmedia59Virgin Australia has formally brought the heads of its major shareholders, Air New Zealand, Etihad Airways and Singapore Airlines, onto its board.

Together, the three airlines own 79% of the shares of Virgin Australia Holdings.

The appointments of Christopher Luxon, James Hogan and Goh Choon Phong are effective immediately and analysts expect the mix to be “interesting” – and possibly  volatile.

Business commentator Stephen Bartholomeusz writes on the website: “Having the CEOs of three major airlines with competing aspirations and interests elsewhere on the board, as well as a representative of another airline group with its own interests to protect, could make for a combustible mix.”

Bartholomeusz continues: “There’s massive potential for conflicts of interest – and real conflict – around the new Virgin board table.”

Virgin Australia chairman Neil Chatfield put it more neutrally. In a statement issued Friday, he said Virgin Australia was “privileged to have such a strong and diverse group of leading international airlines as our major shareholders.

Welcoming  the new directors to the board, Chatfield said they brought “a wealth of global aviation experience which will further strengthen the Board. We have put in place strong protocols in relation to confidential information and any conflict of interest. The Board will continue to ensure it serves in the best interests of all shareholders.

“The Board will comprise of 10 directors, four of which represent the major shareholders including Air New Zealand, Etihad Airways, Singapore Airlines and the Virgin Group. The remaining six directors include five independent directors and one executive director. The Board will retain its overall independence given that I, as current Chairman, am an independent director and the company’s Constitution states that the Chairman has a casting vote if there is an equality of votes at a meeting of directors.

“The Board considers this balance of representation appropriate given that over 79% of the share register is held by Air New Zealand, Etihad Airways, Singapore Airlines and the Virgin Group which are, together with their nominated representatives, subject to the terms of the Protocol.”

The appointments, which took force last Friday, followed the adoption of a Nominee Director Protocol (Protocol) which sets out the procedures to be followed by the Board, its major shareholders and their nominated representatives on the Board, the airline said.

“The Protocol will assist the management of potential issues relating to conflicts of interest and confidential information and ensure the Board continues to serve the interests of all shareholders,” the airline stated.

Consultation on the Protocol was undertaken with the Australian Competition and Consumer Commission and Australia’s Department of Infrastructure and Regional Development prior to its finalisation. All major shareholders and their nominated representatives have provided their agreement in writing to the Protocol. A summary of the Protocol is attached to this announcement.

For those interested, a full copy of the Protocol is being made available on the company’s website.

Virgin Australia provided the following thumbnail sketches of the three directors:

  • Christopher Luxon is Chief Executive Officer of Air New Zealand. Prior to joining Air New Zealand, Mr Luxon was President and CEO of Unilever Canada, where he was responsible for leading Unilever’s $1.4 billion Canadian business and 1,500 employees. Mr Luxon has a Master of Commerce in Business Administration from the University of Canterbury.
  • James Hogan is the President and Chief Executive of Etihad Airways and brings more than 30 years of travel industry expertise to the Board. He started his career at Ansett Airlines and subsequently held senior positions with bmi, Hertz, Forte Hotels and Gulf Air, where he served as chief executive for four years. Mr Hogan is a fellow of the Royal Aeronautical Society and a former non-executive director, and member of the Board’s Audit Committee, of Gallaher Plc and the UBS Industrialisation Advisory Board . He currently serves as vice chairman on the Executive Committee of the World Travel and Tourism Council(WTTC) and is a member and the International Air Transport Association (IATA) Board of Governors. He serves as vice chairman of equity partners, airberlin plc and Jet Airways Board.
  • Goh Choon Phong is a Director and Chief Executive Officer of Singapore Airlines. Prior to his appointment as Chief Executive Officer, Mr Goh held senior management positions in various divisions in Singapore Airlines, ranging from marketing to information technology, finance and cargo. Mr Goh also served as President of Singapore Airlines Cargo Pte Ltd from 2006 to 2010. Mr Goh is also a director of SIA Engineering Company Limited, Mount Alvernia Hospital and is a member of the Board of Governors of the International Air Transport Association. Mr Goh has a Master of Science in Electrical Engineering and Computer Science as well as three Bachelor of Science degrees in Computer Science & Engineering, Management Science and Cognitive Science from the Massachusetts Institute of Technology.

Alternate directors have also been named for each.

Written by Peter Needham

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