Dreamworld owner Ardent Leisure has completely botched its response to Tuesday's horrific accident that caused the
deaths of four people when their raft flipped on a ride at the theme park on the Gold Coast.
The board and management of Ardent, including chairman Neil Balnaves and
chief executive Deborah Thomas, have made five key mistakes in the 48 hours following the accident.
First, they
decided to push ahead with a scheduled annual general meeting, which included a resolution to approve an $860,000 bonus for Thomas. You don't need to be a journalism graduate to know how that is going to play out in the press.
There are legal requirements preventing companies from rescheduling annual general meetings, but the chairman does have the power to defer a vote on a particular resolution. In this case, Ardent could have postponed a vote on Thomas' pay and got it off the agenda at the very least.
Its second faux pas was deciding to re-open Dreamworld for a memorial day on Friday. That decision was made too soon and Ardent was later advised by police that the theme park was still a crime scene and was closed indefinitely. Dreamworld on Thursday had to cancel the memorial plan, adding to the public relations nightmare.
While the company did the right thing by fronting the media on Thursday to answer questions about the accident, the press conference did not go well. Thomas was caught out over questions about why the company had not contacted the
family of the victims after one of the parents texted a reporter saying she was furious about not having been contacted.
Ardent did, in fact, go through the correct channels by taking it to the police rather than contacting the relatives directly, but that is not how it will play out in the media.
Finally, there are questions around Balnaves retiring as chairman, as planned, when the company is going through a crisis. He has agreed to stay on in a consultancy role.
Ardent has foolishly gone down the rabbit hole of defending Thomas' bonus. It would have been wiser just to keep quiet about the whole thing, or offer to donate it to the families of the victims. It released an ASX statement saying Thomas was granted a short-term cash incentive of $167,500 and that references to an $860,000 bonus relate to long-term performance rights which cannot vest for another four years.
That is true, but the wider public does not understand how corporate remuneration works and does not care.
The lesson here for those running companies that find themselves in Ardent's position is to take the advice of people trained to deal with a crisis instead of stubbornly thinking you know how to handle things.
It is a delicate balancing act defending your company and its financial interests without appearing disrespectful when people have been killed.
The more serious issue around allegations of safety concerns raised in the lead-up to the accident and the significant financial impact are separate matters the company will also need to address over time.
Ardent has not exactly been firing on all cylinders over the last year and Thomas' appointment as chief executive last year was also badly managed.
