Few CEOs would describe a major acquisition requiring a five-year turnaround strategy as “fun”. And even fewer would advocate for the underling leading the move to take home a salary worth twice his own.
But that’s Richard Goyder: a low key, footy-mad, family man who heads up Australia’s largest conglomerate, Wesfarmers. He convinced his board to spend $22 billion purchasing the Coles Group back in 2007, and a further chunk of cash ensuring the man employed to make Australians load up their Coles supermarket trolley, Ian McLeod, would be handsomely rewarded for doing so.
Goyder’s now seeing the rewards. Coles is hot on the heels of Woolworths and its dominant market share of the Australian grocery spend, with the supermarket chain now responsible for a significant portion of Wesfarmers’ total earnings. And yet the unassuming Goyder, never one to be satisfied, wasn’t willing to concede they’d reached the pinnacle of success, even after declaring the process “good fun”.
“We’ll never put up a mission accomplished sign,” he tells The Power Index, “We’ll leave it to others to judge.”
Such judgments are seeing once naysayers doing a mea culpa. “A lot of people had their doubts,” star stockpicker John Sevior told the AFR last year. “He’s [Goyder] proven us wrong. It was a costly miss for us. We haven’t owned enough [stock].”
“Goyder provided Wesfarmers’ key defining moment,” corporate spinner John Connolly tells The Power Index, one that took it from being a Western Australian company to a major Australian company with exposure everywhere.
Richard Goyder’s no household name, but products purchased from the portfolio of businesses he oversees would be found in almost all Australian homes. In the kitchen alone you could find groceries from Coles, crockery from Target, grog from Liquorland and DIY from Bunnings.
The business reaches further than retail with investments in industrial supplies, resources and insurance — employing more than 220,000 people in the process. With no international offices, it’s got enough diversity to act as a “proxy for the Australian economy”, according to Forbes.
Not bad for a farming cooperative that started life in WA in 1914. Nor for its current key acquisition maker, Goyder, who grew up on a cattle and grain farm in a small town hundreds of kilometres south of Perth and was branded a “conservative choice” when he was appointed to replace Michael Chaney back in 2005.
Seven years later, it’s only natural that a born and bred West Australian should feature so highly on our list of powerful Business Bosses. “I keep telling business people in Sydney, if you want to feel good, come over to Perth for a few days,” Goyder quips.
Indeed, Goyder’s well-connected in Perth, having disappeared for long stints at a time to the eastern states only to return back home again. He has a former WA premier, Alan Carpenter, looking after his corporate affairs division and he likes to back his state in politics and sport.
Formerly on the board of the Fremantle Dockers, Goyder was appointed to the AFL’s nine-person commission last year where he’s promised to push for a fairer match schedule for WA’s two teams given their travel burden exceeds all other teams in the league.
Goyder bares all the usual trademarks of an average-looking CEO. Grey-haired and in his fifties, he’s described to The Power Index as “modest”, “down to earth” and the “complete antithesis of the normal chief executive” by those who know him.
But more importantly, he’s described as a family guy. During last year’s AGM his young daughter, Sophie, sat in the front row. He became an advisory council member on the Juvenile Diabetes Research Foundation when his youngest son was diagnosed with diabetes. He cites the fact his 19-year old plays a competitive level of footy as being one aspect of his love for the game, when telling us how thrilled he was to be appointed to the AFL commission.
Successfully leveraging a portfolio business — and having the nous to grow it at the same time — requires some serious multi-tasking. On the day we speak to Goyder we’re sandwiched between a meeting with his resources division and later with his Coles business.
“You couldn’t get two more different businesses then coal mining and retailing at the moment,” he laughs. There’s also a prime minister to meet and media interviews to give regarding the state of the economy and just why consumer confidence is still so low.
And in the current climate, there’s a need to defend his company’s own success and its right to get larger, as Goyder recently opined in The Australian. “I find some of the commentary implying that big business and wealth creation is bad to be off the mark,” he tells us. “Wesfarmers started life as a small business. Its success should be celebrated, as should Kylie Minogue for doing what she’s done.”
Goyder doesn’t take out the No. 1 spot on our list of Business Bosses because in order to keep across the portfolio, he relinquishes so much of his power to his managing directors.
The Goyder approach is to pick the right people and give them the autonomy they need. It’s about “rewards for good performance, consequences for poor performance”, he says. Such rewards saw Coles’ McLeod take home $15.33 million last year, a salary that made Goyder’s $7 million look like small change. But the man’s unfazed by the figure: “I’ve said many times to the board and to the broader community that I would be delighted if Ian earns considerably more money than me because it means the thing is running the way we want it to.”
Still, handing out autonomy and a fat paycheck doesn’t always go according to plan. Not all’s dandy in the portfolio, with some analysts accusing Goyder of spending too much time and energy on the Coles turnaround that Target has been left to languish. So much so that the discount department store’s in need of an expensive restructure.
And no amount of delegating can dismiss complaints made to the Australian Competition and Consumer Commission that Coles has too much market power. The ACCC is currently calling for evidence of market abuse, with ACCC chairman Rod Sims recently promising to protect Coles and Woolworths suppliers who speak out about alleged bullying tactics by the supermarket giants.
Despite a couple of lumps in need of smoothing out underneath the Wesfarmers rug, Goyder tells us he’s on the lookout for more acquisitions.
Next time, it should be an easier task than the Coles turnaround. “Your influence in these roles increases as you’ve been in them for a bit longer,” Goyder says. “People take me more seriously now than they might have five years ago.”
Let’s hope the next big thing is just as much fun.
This article first appeared on The Power Index.