The myths of David Gonski
No matter how ludicrous the words that fall from Gonski's lips, everyone nods along as if some papal edict has just been uttered.
On Thursday evening, the godhead of company directors, David Gonski, received a lifetime achievement award at the Australian Financial Review's inaugural director awards.
Gonski's career is a triumph in the eyes of fellow company directors, all of whom aspire to emulate him, but certainly not to public company shareholders. Objectively, his track record is not great. Westfield has been the great success, which had sweet FA to do with him. On the contrary, shortly after joining Westfield's board in 1985, Gonski tipped it into a disastrous Ten Network investment that cost Frank Lowy several hundred million dollars.
Hey, we all make mistakes – but that was nothing! Gonski joined the board of Fairfax in 1993 and, in 1998, was instrumental in installing his Westfield board colleague Fred Hilmer as Fairfax's chief executive.[[For the full story, I commend to you Pamela Williams' 2013 book, Killing Fairfax.]] To say that Hilmer was the worst CEO ever would be to engage in melodramatic understatement. Hilmer and his board decided to disinvest in online jobs, homes and cars at a time when Fairfax enjoyed online market leadership in all three.[[Hilmer also bought News Corp's New Zealand newspaper assets in 2003 for $1.1 billion. In 2020, Nine sold those newspapers to their staff for $1. That was a New Zealand dollar by the way, so more of a peso than a dollar.]] This was arguably the most catastrophic strategic blunder in the history of corporate Australia. Had they taken the opposite tack, as they were being urged to by many people in the organisation, Fairfax might be a $55 billion company today rather than a subsidiary of a sinking TV network.[[Take the market capitalisations of Carsales, REA and SEEK today and, crudely, it was a $55 billion mistake.]] In the end (and much later), all Fairfax could semi-salvage was Domain, which is in itself another sad story.
Joe Aston
The irony of Fairfax's pre-eminent newspaper now handing Gonski a lifetime achievement award appears to have been lost on my good friends at the AFR.