Beef CEO turnover: Is something sinister going on?

Beef CEO turnover: Is something sinister going on?


Commercial
AACo's Jason Strong at an industry conference in Darwin this year.

AACo's Jason Strong at an industry conference in Darwin this year.

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The unique challenges of an ag top executive role explored.

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THE TURNOVER of top executives in the beef industry of late is fuelling speculation about whether the unique challenges associated with heading up an agricultural outfit are causing an imbalance.

The experts, however, say a misperception has possibly been created given the high profile nature of the beef chief executive officer churn in the last six months and the fact several changeovers have coincided.

Cattle Council of Australia has now had three CEOs in just over six months, the Northern Territory Cattlemen’s Association last week announced Paul Burke would be it’s new leader, Agforce’s CEO steps down this month and Jason Strong’s parting from from Australian Agricultural Company, announced last week, has been the talk of the industry.

That is just a few of the more notable shifts. Amid them are plenty of breed society comings and goings, the most prominent being the decision of Herefords Australia’s Alex Ball to forego the CEO role less than 12 months in but then take up another managerial position with the organisation.

Academics and recruitment specialists say the resignations and appointments beef has seen are in sync with other sectors and are in fact a healthy and natural process.

The typical tenure length for a CEO or managing director is three to four years and certainly the beef industry is tracking in line with that, despite recent anomalies.

Agricultural economist and head of the University of New England’s business school Professor Alison Sheridan said the CEO role in any sector was difficult and complex and required enormous amounts of energy and attention.

Head of the University of New England’s business school Professor Alison Sheridan.

Head of the University of New England’s business school Professor Alison Sheridan.

“It’s accepted there are periods for which an individual will be able to contribute what they can and then a time will come for the next person to come through,” she said.

“We are seeing that cycle becoming shorter, mostly because competitive pressures and changes in trading environments are increasing.”

Tenures of vice chancellors were becoming shorter and CEO turnover in financial institutions were following the same trend, she said.

“Quite often it is not the case a CEO was moved on but rather their own decision,” Prof Sheridan said.

“Today it is a 24/7 job and 20 years ago that wasn’t the case.”

Patterns of behaviours in this area were relatively under explored, although an interesting theme appeared to be how quickly CEOs turn up in other roles after moving on, she said.

As an example, she pointed to former NSW premier Mike Baird, who resigned from politics, something he framed as a rejuvenation, then joined National Australia Bank as chief customer officer of the lender's corporate and institutional banking unit within months.

Their networks and connections allow this to occur, according to Prof Sheridan.

Research conducted by Dr Sheridan eight years ago showed about half the number of CEOs had university qualifications but she believes that is changing.

“We are seeing a more educated workforce generally and that is flowing through,” she said.

A Master of Business Administration was reasonably common across executive positions but certainly not a requirement, she said.

Increasingly those with CEO ambitions are doing specific training programs, such as the packages offered through the CEO Institute.

Ag’s unique challenges

IN agriculture, the greater cycles of uncertainty and the fact a CEO is typically answering to an extremely passionate and invested board, but one not always having a wide degree of corporate governance experience, could pose unique challenges.

Although, Prof Sheridan points out that latter characteristic is not unusual in other sectors either.

To address it, industries are placing more and more attention on the sorts of skills sets members on boards bring.

It’s generally called capacity building training and two of the red meat industry’s major bodies, Cattle Council and Meat and Livestock Australia, this week announced a major funding initiative aimed at driving industry upskilling.

Alison Penfold, who held what is arguably one of the toughest gigs in beef, CEO of the Australian Livestock Exporters Council, for four-and-a-half years, agrees leadership in the sector is relatively stable.

“The common challenge is the fact these associations are running on the smell of an oily rag and there are expectations of beef sector peak councils that are unique,” she said.

“But beyond that, there are no broader correlations - each CEO change reflects an individual set of circumstances.”

Ms Penfold stepped down from ALEC last year and is now working in the corporate sector in a government relations position.

It was her first CEO role, although she did come from being state director of The National Party, and she describes it as the best she has had.

“I got a lot from it, it’s an honour to work for producers and I’d encourage others to give it ago,” Ms Penfold said.

The biggest challenge?

Understanding members’ ideas of what their future looked like and aligning that with a future the community expected, she said.

“The job was about presenting a different way of engaging with the community and understanding their concerns about animal welfare. Taking the industry on that journey was part of the deal.

“The live-ex industry is in a stronger position because they’ve taken time to understand that.”

Tracey Hayes became the first female to lead the NTCA in its 33-year history when she took the role in May 2014.

NTCA chief executive officer Tracey Hayes.

NTCA chief executive officer Tracey Hayes.

She was previously NTCA’s executive officer and said that assisted the transition to what was also her first CEO job.

While she has opted to move on this year, she says the CEO path in agriculture is one she will pursue longer term.

What makes it hard to stay in these roles for any longer than a few years?

“In order to do the job well, you need to live and breathe it - that’s the reality and you can’t sustain that forever,” she said.

“I’ll be honest - I didn’t find the remedy for work life balance, although I did get better at it the longer I was in the role.

“A CEO skill set is one thing but with ag you need the capacity to connect with grassroots members, to listen to their needs and understand their requirements but also, at the same time, to operate at a state and increasingly federal government level and even in the international space.”

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