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Thirty-five of the country's leading chief executives have singled out the nation's incoherent energy policy as one of their main concerns. Many are concerned about the threat to Australia's AAA credit rating, confused about the impact of a Trump presidency and agree that big business needs to do a better job explaining itself to the wider community. The annual Chanticleer CEO outlook poll surveyed the bosses of the country's biggest banks, miners, retailers, media firms and industrial giants on the burning issues in 2016 and their thoughts on the year ahead.
The chief executives who participated are:
Shayne Elliott, ANZ; Mick McCormack, APA; Dominic Stevens, ASX; Mike Hirst, Bendigo; Adelaide Bank; Andrew Mackenzie, BHP Billiton; Mike Kane, Boral; Emilio Gonzalez, BT Investment Management; Ian Narev, CBA; Brian Benari, Challenger; Darren Steinberg, DEXUS Property Group; Greg Hywood, Fairfax Media; Nev Power, Fortescue Metals Group; Peter Harmer, IAG; Christopher Kelaher, IOOF; Richard Umbers, Myer; Andrew Thorburn, NAB; Mark Fitzgibbon, NIB; Alberto Calderon, Orica; Frank Calabria, Origin Energy; Alan Joyce, Qantas; John Neal, QBE; Jean-Sebastien Jacques, Rio Tinto; Andrew Bassat, Seek; Ryan Stokes, Seven Group; Tim Worner; Seven West Media; Mark Steinert, Stockland; Michael Cameron, Suncorp; Kerrie Mather, Sydney Airport; David Attenborough, Tabcorp; Andy Penn, Telstra; John Borghetti, Virgin Australia; Richard Goyder, Wesfarmers, Brian Hartzer, Westpac; Richard White, WiseTech Global; Peter Coleman; Woodside Petroleum.
Here are their complete answers to the survey.
Shayne Elliott, ANZ
How is the world of low returns impacting on your business and your decision making? Are you more or less likely to invest overseas in 2017?
We are in a low growth world, that's a fact. So our responsibility is to structure our business in a way that it's successful irrespective of the environment.
The world changed pretty rapidly and many businesses, and even some households, were caught off guard as they were lulled into a sense of predictability that quickly disappeared.
Given this subdued environment, we're working with our customers to help them manage the impact and help them mitigate increased risk.
We see our role in helping customers manage for the times as a really critical role. Given the current global volatility we are currently experiencing, this becomes even more important.
And while I expect growth to still track along reasonably well, we are starting to see emerging signs of stress in some parts of the economy. Ongoing volatility and uncertainty around the world will only serve to further restrict confidence and growth.
As for our own investment plans, we will continue to invest in our Institutional business in Asia. This remains a very important part of our international network.
Do you consider that China is a more or less an attractive market for your business as its growing middle class comes with questions about the economy's debt buildup and rising political and regulatory risks?
Like the rest of our Asian markets, China remains absolutely critical to our strategy.
We're focussed on building the best bank to capture the trade and investment flows between Australia, New Zealand and the rest of the region. A strong business in China is vital and we remain Australia's biggest investor into China.
We know that China will go through peaks and troughs but we also know it will remain one of the biggest and fastest growing economies in the world.
However, to put our business in China into perspective, of a total group exposure at default of around $900 billion, our China exposure is $22 billion. More than half of this is to the Central Bank and its top four banks.
We expect to be able to prudently manage any risk should things deteriorate quicker than expected, given around 90 per cent of our China exposure is at a tenor of less than-year.
How concerned are you about Australia losing its AAA credit rating? What, in your opinion, are the implications for your business of a cut in the rating?
As a net importer of capital of course it would be better to have a triple A rating than to lose it.
With the significant work done to ensure capital levels of the major banks are in the top quartile of globally, I'd expect we would be able to navigate a small downgrade to the national rating.
Are you worried about the chaos and dysfunction in Canberra? What policy reforms do you think should be prioritised in the interests of the nation in 2017?
Political instability has become the 'new normal' in many parts of the world, despite both Germany and New Zealand showing that the public will support well-articulated and balanced reform.
The job of big business today is to manage the impact political instability has on confidence and investment given it is the current reality.
Reforms in Australia should be focussed on helping the continued transition from the mining and residential construction boom to a modern services economy focussed on innovation. This is even more important given we are starting to see the effects of under-employment in the economy.
What do business leaders need to do in response to the anti-business sentiment on both sides of politics and in the broader community?
As a big business we need to be much clearer about our purpose in society at large. We've spent a lot of time on this in the last year at ANZ as we recognise that we've made mistakes, that our industry has lost touch with the community and we're not talking about the things that people care about.
We've now repositioned our purpose to be much more about shaping a future where communities can thrive and we need to really work hard to help all our people connect with that vision.
Are you more or less likely to invest in automation this year than last year? If so what type of automation? Also, what are the specific measures you are taking to digitise your business?
Absolutely. We have a really clear path forward on how we can become the best bank in the world and a big part of this is a focus on digital technology.
This year we created a new digital banking division led by Maile Carnegie and I'm really pleased with the progress we have already made, particularly in the mobile space. Highlights include the introduction of ApplePay, Android Pay and more recently BladePay.
For me the ApplePay decision demonstrated we're willing to partner if it means a better outcome for our customers and while we've seen a significant lift in customer numbers, we've also been surprised by the positive impact the decision had on the engagement with existing customers.
How much risk of power interruptions and cost increases do you assess for your business as baseload coal power generation is phased out and the electricity system becomes more reliant on renewables such as wind power?
A consistent and reliable power source is critical for all industries including banking, as is the transition to lower a lower carbon future.
As a major financier to both the energy and renewables sector, we will continue to work closely with our customers and Government as the nation looks to lower its emissions.
Do you think the RBA will raise or lower interest rates next year?
While history would suggest they are more likely to rise than fall given the starting position, what the RBA will or won't do doesn't keep me up at night and I've given up trying to guess.
We are more focussed on making sure we are prepared for either scenario and this includes ensuring any lending done today is prudent with a significant buffer to account for rising rates.
Do you feel positive or negative about a Trump presidency and why?
The global shift to protectionism will be a challenge for an export-led Australian economy and a Trump presidency will only add to the challenges of the global economy over the next 12 months.
What are the challenges, if any, to increasing the percentage of female leadership at your firm? What are the numbers and percentage of women who are direct reports to the CEO at your firm?
We've been working hard to increase the number of women in management for many years, with our current performance sitting at 41.5 per cent with an FY17 target of 42.5 per cent. There are four women on ANZ's executive committee (CFO, HR, Digital and Wealth). This is the highest number ever and it is already making a positive impact on how EXCO make decisions. From my perspective, the key challenges include making sure we are doing enough to identify suitably qualified women candidates and that we are giving our existing women the opportunity to broaden their experience. To help address this we now ensure we have a female candidate interviewed for every role, and all interview panels contain at least one women. We have also introduced rotational program for female managers to develop broad-based banking careers and both these programs are delivering incredibly positive results.
Mick McCormack, APA
How is the world of low returns impacting on your business and your decision making? Are you more or less likely to invest overseas in 2017?
As the owner and operator of energy infrastructure, we are a long term business. Our decision making process reflects our long term vision to deliver sustainable growth and to continue to grow returns to securityholders.This will continue in 2017, as we continue to execute on around $1.5 billion of organic growth opportunities we have identified over the next three years. Looking further out to 2030, we see growth capex opportunities of around $5 billion in our core gas transmission business alone. Additionally, we are also looking to develop further our renewable energy portfolio as Australia moves towards a more renewable and cleaner energy future.In terms of offshore markets, we are continuing to conduct due diligence on the North American market generally. It is a well-developed and low-risk market, with strong long-term gas supply/demand fundamentals. We see potential opportunities following the unprecedented growth in shale gas and increasing financial pressures driven by the ~65 per cent decline in gas prices since 2014. Any future decision to invest would remain consistent with our strategy of investing in energy infrastructure underwritten by long term contracts with highly creditworthy counterparties.
Do you consider that China is a more or less an attractive market for your business as its growing middle class comes with questions about the economy's debt buildup and rising political and regulatory risks?There is no doubt that rising energy demand from China will continue to see it, as well as other Asian markets, play an increasingly important role in the development of the energy sector globally.APA's strategy remains focused on supporting our customers in meeting the rising need for energy. Our low-risk business model requires any investments to be in established markets with well-developed and stable business, legal and regulatory environments.
How concerned are you about Australia losing its AAA credit rating? What, in your opinion, are the implications for your business of a cut in the rating?Like any successful long-term business, APA believes in the importance of maintaining strong and stable credit ratings. APA is committed to maintaining our stable BBB and Baa2 credit ratings which support the continued delivery of sustainable future growth and provide access to global capital markets to fund such growth.Our ratings are underpinned by a solid financial foundation: a strong balance sheet; a diverse range of funding sources; and long-dated spread of maturities, all underpinned by long-term contracts with creditworthy counterparts. We don't believe that a change to Australia's sovereign rating will have any impact on our own rating.We will continue to look to the broad range of highly liquid global debt capital markets to fund our business and in that regard we have more interest in rates in those markets that we do with the AAA rating for the Australian government.
Are you worried about the chaos and dysfunction in Canberra? What policy reforms do you think should be prioritised in the interests of the nation in 2017?
Uncertainty of any sort, and regulatory risks in particular, are not good for business or investment. There is no doubt that everyone is keen to see more streamlined and consistent policy decision making coming out of Canberra.During 2016, the South Australia power crises meant businesses and households experienced first-hand the significant costs of the continued inconsistent approach in energy policy. APA supports the Federal government's move, through COAG, towards a national approach to energy and renewables policy. We believe harmonising the differing state-based energy and renewables policies is key to ensuring the reliability, efficiency, security and affordability of energy across the nation.The east coast gas market was also high on the government agenda during 2016. There were various reviews, under the auspices of the COAG Energy Council, where APA presented views of how current regulations have underpinned some $30 billion in pipeline investment since 2000. We are encouraged by the recent industry consultation process conducted by the Gas Market Reform Group, led by Dr Vertigan, and are hopeful that 2017 will see recommendations that support continuing investment and innovation by industry participants.
What do business leaders need to do in response to the anti-business sentiment on both sides of politics and in the broader community?
There needs to be clearer communication from business about the private sector's contribution to nation-building, job creation and economic development for all. The provision of energy is an essential service and we take our obligations to our stakeholders and the nation seriously.We need to continue to communicate our mutual successes. APA is an Australian infrastructure success story and we are proud of our achievements in building a unique gas transmission grid that delivers cleaner and more reliable energy to Australia, and is supporting the exponential growth of the gas industry in this country.APA has invested some $10 billion in its East Coast Grid and services have revolutionised gas supply to customers by connecting great distances between production and end-users.We believe our good corporate reputation is an integral part of our growth as a long term sustainable business. We are also mindful that we have a responsibility to give back to the communities within which we operate. This is why we have a dedicated community investment program that has continued to support the future prospects of vulnerable Australians since 2010. Moving forward, we are expanding this program to allow our employees to volunteer and to further support diversity and inclusion in our community.
Are you more or less likely to invest in automation this year than last year? If so what type of automation? Also, what are the specific measures you are taking to digitise your business?
We are always looking at ways to develop our systems and improve our efficiencies through process enhancements and IT investment so that we might bring more optionality, reliability and flexibility to our customers and the market as a whole.As a leading innovator, we have invested over $12 billion in the past 16 years to develop infrastructure and innovate to meet customer requirements and market needs. In 2016, we launched our Integrated Operations Centre which is the result of tens of millions of investment in innovative systems and state of the art technology, offering customers more flexibility and opportunities when managing their energy portfolio across all APA assets.
How much risk of power interruptions and cost increases do you assess for your business as baseload coal power generation is phased out and the electricity system becomes more reliant on renewables such as wind power?
We believe gas is ideally placed to be the transition fuel to Australia's cleaner energy future, through managing peak energy requirements in a reliable and secure fashion. The real problem here is the disjoint state-based energy policies. This has led to detrimental impacts for businesses and consumers alike, such as the recent power crises in South Australia. APA supports the Federal government's actions to develop a national approach to energy and renewables policy, in order to prevent a repeat of such issues.From APA's perspective, we have always believed in gas as the transition fuel to Australia's cleaner energy future, shifting it away from reliance on black & brown coal fired generation, whilst sustaining Australia's economy. We therefore see opportunities in this shift, but believe that it needs to be done in a way that makes economic sense as nation-wide solution.
Do you think the RBA will raise or lower interest rates next year?
APA believes that the RBA is best suited to determine any decisions with respect to interest rates. At APA, we are focused on building on the long term success of our business irrespective of the interest rate environment. We do this through maintaining our solid financial foundation and our low-risk business model, underpinned by our long-term contracts with highly creditworthy counterparts. We remain confident we are well placed to continue to deliver on our growth strategy and long-term investment decisions that are based on long term considerations rather than short term economic indicators.
Do you feel positive or negative about a Trump presidency and why?
As one of the largest owners and operators of energy infrastructure in Australia, our business is not in the first instance directly affected by who sits in the White House. However as we continue our due diligence on the North American markets, we are watching this space closely.Based on the indications sent to the market following Trump's acceptance speech, my initial thought is that he is pro-business, keen to streamline regulations and looking to invest in infrastructure developments. This is supportive of growth in our existing business and the due diligence process we are currently doing on the US, the largest gas transmission market in the world.
What are the challenges, if any, to increasing the percentage of female leadership at your firm? What are the numbers and percentage of women who are direct reports to the CEO at your firm?
Female representation at APA in senior leadership roles (direct reports to CEO) is at 29 per cent (2 of the 7 direct reports are women).We know that to become a leading innovator and to continue our strong performance and growth, we need to find creative ways to enhance our people capabilities and we do that by encouraging inclusion and diversity of thought, gender, ethnicity and age. There are challenges, especially in terms of increasing the number of women in our operational and technical areas, but we are looking at ways to address this in how we recruit, arrangements and opportunities we offer at work and ensuring we have a positive culture. We have a Diversity and Inclusion Committee to help drive a number of initiatives to increase diversity within the organisation.
![ASX CEO Dominic Stevens](http://web.archive.org./web/20161210140042im_/http://www.smh.com.au/content/dam/images/g/r/q/5/l/c/image.imgtype.articleLeadwide.620x349.png/1481277885829.png)
Dominic Stevens, ASX
How is the world of low returns impacting on your business and your decision making? Are you more or less likely to invest overseas in 2017?
In a world of low returns underlying growth is harder to come by. We are focussed on a number of new business initiatives that are additive to revenue. Our focus geographically remains on being the heart of the A$ and NZ$ markets.
Do you consider that China is a more or less an attractive market for your business as its growing middle class comes with questions about the economy's debt buildup and rising political and regulatory risks?
Right now, China as 'a market' is less applicable to our business. We would like to encourage further connections between Australia and China through direct Renminbi transfers via ASX's cash and securities settlement hub. Capital flows out of China are currently constrained by regulation. In the long run, once capital flows more freely, even a fraction of the investment wealth of the Chinese middle class allocated to the Australian capital markets will make China an attractive place from which to provide access to ASX.
How concerned are you about Australia losing its AAA credit rating? What, in your opinion, are the implications for your business of a cut in the rating?
I believe a strong fiscal position gives the economy significantly more flexibility to manage volatile and uncertain times, as in 2008-09. It is never positive for business if your country is downgraded. It is important to maintain credibility with the international financial community that our medium-term goal remains to bring Australia's fiscal position back to a more sustainable level.
Are you worried about the chaos and dysfunction in Canberra? What policy reforms do you think should be prioritised in the interests of the nation in 2017?
Business and community confidence is best served by governments able to make decisions and implement stated policies. I continue to believe that policies that encourage innovation - particularly in the technology sector - will bear significant fruit over the long-term.
What do business leaders need to do in response to the anti-business sentiment on both sides of politics and in the broader community?
All businesses – regardless of size – have a responsibility to listen and communicate meaningfully, transparently and respectfully to their community of stakeholders. This is broader than shareholders – but it makes good business sense for shareholders that companies do this. ASX plays an important role in the Australian economy and we have a responsibility to ensure that we communicate what we do.
Are you more or less likely to invest in automation this year than last year? If so what type of automation? Also, what are the specific measures you are taking to digitise your business?
ASX is in the midst of a program to upgrade its technology and better digitise its business. Current initiatives include the rollout of a new derivatives trading platform, improving our ability to access and manage data, and investigating blockchain technology.
How much risk of power interruptions and cost increases do you assess for your business as baseload coal power generation is phased out and the electricity system becomes more reliant on renewables such as wind power?
ASX's environmental footprint is small and mainly comprises the consumption of electricity at its offices, particularly the Australian Liquidity Centre. Due to the investments we have made in significant power backup and failover infrastructure we do not see this as a material risk at this stage.
Do you think the RBA will raise or lower interest rates next year?
Over the last two years we have seen around the globe that lowering rates much further than current levels has proved to add little or been counterproductive. As such, in the near term, I see Australian rates moving sideways to higher.
Do you feel positive or negative about a Trump presidency and why?
Certainty is good for business and at the moment it is hard to predict the direction of future US economic and foreign policy. I think the next 12 months will see increased volatility as the situation begins to unfold. Notwithstanding this, I generally feel positive about the prospects for ASX in Australia.
What are the challenges, if any, to increasing the percentage of female leadership at your firm? What are the numbers and percentage of women who are direct reports to the CEO at your firm?
We have seen increases in female leadership across the firm over the last 5 years. ASX continues to work towards its stated targets in this area and we have a range of initiatives in place to improve opportunities for senior women, including 'all roles flex' and policies that support working families. A third of the members of ASX's senior executive committee is female as are about 40 per cent of our managers and team leaders. We also have a strong pipeline of emerging female talent.
Mike Hirst, Bendigo and Adelaide Bank
How is the world of low returns impacting on your business and your decision making? Are you more or less likely to invest overseas in 2017?
The absolute low level of interest rates reduces margin and revenue meaning there is a strong focus on cost management and growing market share at profitable prices both organically and through acquisition. Offshore investment is not a core strategy of the business.
Do you consider that China is a more or less an attractive market for your business as its growing middle class comes with questions about the economy's debt buildup and rising political and regulatory risks?
See above
How concerned are you about Australia losing its AAA credit rating? What, in your opinion, are the implications for your business of a cut in the rating?
A credit rating is important for two reasons - it governs the price of debt borrowed and the amount of debt that can be borrowed. As Australia has always been a net borrower from overseas we need to have a rating that allows us to borrow the amount required to fund growth at a price that makes sense. In my view the AAA rating is preferable but not a necessity. After all, allocating investments is a relative game and there are not many AAA credits around, so it is questionable about how much of an imperative it is in my view.
Are you worried about the chaos and dysfunction in Canberra? What policy reforms do you think should be prioritised in the interests of the nation in 2017?
I'm more concerned that we end up with governments running agendas based on populism rather than developing a realistic vision for the future that the whole country can get behind.
What do business leaders need to do in response to the anti-business sentiment on both sides of politics and in the broader community?
Better communicate the importance of business to the economy and society and then deliver on the obligation business has to feed into prosperity and not off it.
Are you more or less likely to invest in automation this year than last year? If so what type of automation? Also, what are the specific measures you are taking to digitise your business?
Investment in continuous improvement is a not negotiable. In my industry that is driving digitalisation to reduce friction in the customer experience - making it easier for our customers to do business with us.
How much risk of power interruptions and cost increases do you assess for your business as baseload coal power generation is phased out and the electricity system becomes more reliant on renewables such as wind power?
I expect government and industry to learn as we move down this path and get better at mitigating disruptions so I don't have significant concerns about it being managed properly.
Do you think the RBA will raise or lower interest rates next year?
Leave them unchanged
Do you feel positive or negative about a Trump presidency and why?
I feel uncertain as I don't know what he really stands for.
What are the challenges, if any, to increasing the percentage of female leadership at your firm? What are the numbers and percentage of women who are direct reports to the CEO at your firm?
50 per cent of CEO direct reports are women. I think the greatest challenge is getting women to feel confident in their ability to take on promotions.
Andrew Mackenzie - BHP Billiton
How is the world of low returns impacting on your business and your decision making? Are you more or less likely to invest overseas in 2017?
We saw the signs early and accelerated the restructure of the company to prepare for a world of lower margins.Over the past several years, the divestment of over US$7 billion of assets at attractive prices and successful demerger of South32 has reshaped our portfolio. We are now a simpler company and it has allowed us to focus on 12 core operated assets.Earlier this year, we introduced a new, simpler Operating Model. It's made our functions truly global and collaborative, and freed up our assets to focus on safety, volume and cost.BHP Billiton has the right assets in the right commodities with the capability and culture to prosper. Next year we have two major investment options, one in oil (Mad Dog 2 project) in the Gulf of Mexico and the second in copper (Spence Growth Option) in Chile. In Australia we will further study key investment options which include the South Flank iron ore mine in Western Australia, a staged expansion of Olympic Dam in South Australia and a debottlenecking project at our Caval Ridge metallurgical coal mine in Queensland. This is on top of over US$40 billion we invested in Australia over the past decade.
Do you consider that China is a more or less an attractive market for your business as its growing middle class comes with questions about the economy's debt buildup and rising political and regulatory risks?
We are confident China's longer term outlook for commodities demand remains strong. Despite reductions in China's headline growth rates, the sheer size of its economy will underpin demand fundamentals well into the future.The Chinese government has an extensive agenda of reform to rebalance China's economy and transition from investment to consumption led growth. They have also set bold national goals for trade corridors, climate change action and innovation and technology to further growth.The evolution of the Chinese economy is broadly going to plan. The central government debt in China is at 20 per cent of GDP. That is very modest by global standards. As the central government's own balance sheet evolves the sorts of levers they choose will evolve as their economy transitions.China is more than a destination for our commodities. We work together with our Chinese partners to address the challenges faced by our industry and our countries. This year we partnered with Peking University in China to study the technology, economy and policy for carbon capture, use and storage for steel production.
How concerned are you about Australia losing its AAA credit rating? What, in your opinion, are the implications for your business of a cut in the rating?
We agree with the Government's efforts to address the deficit. If we are to improve Australia's competitiveness then we must get the fiscal settings right. As we return to more balanced commodity markets, there is widespread agreement that productivity and competitiveness are essential. The onus is on us to work smarter, be innovative and stay competitive. It is also on the government to make change so business can be productive and adapt to the changing world.
Are you worried about the chaos and dysfunction in Canberra? What policy reforms do you think should be prioritised in the interests of the nation in 2017?
There are a number of public policy areas that are critical to the future development of the Australian economy: trade, tax, workplace relations and regulatory efficiency. These go to the heart of Australia's future economic success. Although more remains to be done across these areas, we agree with the Government's reform agenda and we believe there is a high degree of consensus across the political spectrum on what must be achieved.Policy proposals that threaten business competitiveness are of great concern. The WA Nationals' proposal to increase taxes on iron ore producers, which would destroy jobs and undermine investment confidence in WA – is one example.The power issues in South Australia demonstrate that energy security should also be at the top of the national agenda. The market needs to supply affordable and reliable energy to households and businesses while seeking to reduce emissions.We will work with State and Federal Governments to improve Australia's competitiveness and make sure we are well placed to attract investment and the jobs and economic growth that goes with it.
What do business leaders need to do in response to the anti-business sentiment on both sides of politics and in the broader community?
We have a strong focus to improve community awareness of the contribution the industry makes to society. We will do more to demonstrate the benefits of a strong and healthy business sector in terms of jobs, economic development and social investment.Business must engage with politicians to make sure policy makers have the facts about the industry's contribution and the importance of policy settings to our industry's future.
Are you more or less likely to invest in automation this year than last year? If so what type of automation? Also, what are the specific measures you are taking to digitise your business?
Our investment in automation will increase. We see technology, and specifically automation, as key to meeting our safety, volume and cost targets.A large focus of automation will optimise logistics, production and maintenance processes. We are working to automate fixed and mobile plants and process control and improve our equipment performance through smart and predictive maintenance.Autonomous drills will be rolled out at all sites in our Western Australian iron ore business. We will also expand our Autonomous Haul Truck Fleet at Jimblebar to other sites and increase the current fleet numbers.There has been much success using drones for specific safety and planning purposes such as making sure a blast site is clear of people and equipment.We see digitalisation is a key component to connect our people across time zones, cultural divides and bring people closer together in 'virtual teams'. As we digitise our assets, we will integrate our IT and Operation Technology environments to leverage data and analytics. For example, the collection of better data from our equipment can predict, through analysis, when the maintenance is required. This is improves equipment availability and lowers maintenance costs.With the pace at which technology is evolving we will be a more digital, integrated and connected business. Our challenge is to develop and implement new, disruptive technologies faster. Our teams have the licence to innovate, to challenge convention and to bring forward new ideas.
How much risk of power interruptions and cost increases do you assess for your business as baseload coal power generation is phased out and the electricity system becomes more reliant on renewables such as wind power?
The power outages at Olympic Dam show stable and competitive supply is vital as governments transition to renewables. A considered energy policy should take into account a number of factors, including cost, stability of supply and lowest cost emissions reduction.There must be an acceleration of effort to drive energy efficiency, develop and deploy low emissions technology and adapt to the effects of climate change. However the challenge for Australia, and the world, is getting the balance between the pace of change in energy transition, economic growth and emissions reduction right.
Do you think the RBA will raise or lower interest rates next year?
The RBA will do what is required to do to foster economic stability and stimulus and I won't make a prediction on rate movements. I will say that we see many economies with low or negative rates and the decisions central banks make over the next few years is important for nations. We make our investment decisions over long time horizons – decades – so when we look at options in Australia we consider economic stability as well as competitive tax rates and the regulatory framework.
Do you feel positive or negative about a Trump presidency and why?
As a major investor and employer in the United States, we are committed to working constructively with the new Administration on all issues relevant to our business.We will advocate globally for the things we believe in, such as free trade, and actions to address climate change as economies grow. We share our perspectives in the US as part of our engagement with policy makers in all countries in which we operate.
What are the challenges, if any, to increasing the percentage of female leadership at your firm? What are the numbers and percentage of women who are direct reports to the CEO at your firm?
In October I announced our aspirational goal is to achieve gender balance across the Company by 2025.This is a huge leap for us – it makes us more accountable; it underpins the depth of our commitment and it lets the world know we are serious. Without new initiatives it would take us 30 years just to get to 30 per cent female representation.Our data shows that for the past three years, our most inclusive and diverse operations outperform the Company average on a range of safety, productivity and culture measures.We will work to remove the unconscious bias that, in my view, women have been disadvantaged by for a very long time in a male-dominated environment. We will challenge dated stereotypes about jobs in the resources industry.Each of our businesses and functions will undertake initiatives to improve workplace inclusion and diversity and achieve greater gender balance. For example, we link our managers' pay to their performance in this area.At a leadership level 27 per cent of my direct reports and 25 per cent of our Board of Directors are women. Female employees now make up 20.6 per cent of our 'senior leader' roles, in contrast with 14.8 per cent in financial year 2014.
![Boral boss Mike Kane](http://web.archive.org./web/20161210140042im_/http://www.smh.com.au/content/dam/images/g/n/k/4/h/m/image.imgtype.articleLeadwide.620x349.png/1479699275550.png)
Mike Kane, Boral
How is the world of low returns impacting on your business and your decision making? Are you more or less likely to invest overseas in 2017?
We have long identified Asia and America as our target growth markets. Three years ago we accelerated our growth in Asia with a joint venture with USG and last week we announced our largest ever acquisition in the US with Headwaters.
Do you consider that China is a more or less an attractive market for your business as its growing middle class comes with questions about the economy's debt buildup and rising political and regulatory risks?
China is too big a market to ignore. We are cautious about its near term profitability and confident that in the long run our over 15 years of trading and manufacturing experience in China will pay off.
How concerned are you about Australia losing its AAA credit rating? What, in your opinion, are the implications for your business of a cut in the rating?
Any credit rating deterioration can drive up the cost of infrastructure investment and dampen the upside of the current cycle of investment. High taxes and deficit spending in this sized economy stifles economic growth.
Are you worried about the chaos and dysfunction in Canberra? What policy reforms do you think should be prioritised in the interests of the nation in 2017?
Political grid lock in developed economy democracies is a global phenomena. However politically distasteful, a reduction in corporate tax rates to make Australia more globally competitive will come back to the country in GDP growth, more foreign direct investment and stimulate domestic capital investment.
What do business leaders need to do in response to the anti-business sentiment on both sides of politics and in the broader community?
Business leaders should be more confident to express pro-capitalist sentiments as a bulwark against anti-business rhetoric which misunderstands the engine that creates jobs and secures middle class incomes and business.
Are you more or less likely to invest in automation this year than last year? If so what type of automation? Also, what are the specific measures you are taking to digitise your business?
There are an amazing number of new technologies being deployed in traditional industries that run the gamut from simple automation to deployment of above ground, underground or inside equipment drone type machines. These drones can measure stock in outside storage, early detection of potential equipment failure using go pro technology and computer enhancement and the simple use of video surveillance in manufacturing operations to capture the instance of equipment failure to assist in preventative maintenance. On a much larger scale we are seeing the beginnings of autonomous vehicles in large scale mining and quarrying and the longer term promise of autonomous vehicles for over the road transport. In the meantime the mobile equipment itself is going through some dramatic redesign to make them safer, more efficient and durable.
How much risk of power interruptions and cost increases do you assess for your business as baseload coal power generation is phased out and the electricity system becomes more reliant on renewables such as wind power?
For a nation that is a world leader in coal production it is unfortunate that we don't first focus our attention on clean coal burning innovation rather than assuming that domestic power generation is somehow going to be met with renewables.
Do you think the RBA will raise or lower interest rates next year?
Unclear what the RBA will do.
Do you feel positive or negative about a Trump presidency and why?
Cautiously optimistic about the economic impact of a Trump Presidency. Tax cuts, stimulus spending on productivity enhancing infrastructure and increases to defence budgets should drive growth, investment and with it inflation all of which may dampen any accelerated effort to significantly raise interest rates. It is clear that Trump is less afraid of inflation and more concerned about deflation and a lack of GDP growth. So if he wants to double GDP growth and the Fed is dampening with rate rises expect changes at the top of the house.
What are the challenges, if any, to increasing the percentage of female leadership at your firm? What are the numbers and percentage of women who are direct reports to the CEO at your firm?
At Boral 50 per cent of our Board is female. Three of my direct reports, representing 27 per cent of our Executive Committee are female including our CFO. More needs to be done. We are continually seeking and identifying high potential females with executive potential and preparing them for senior management roles. This can only improve our decision making capability.
Emilio Gonzalez, BT Investment Management
How is the world of low returns impacting on your business and your decision making? Are you more or less likely to invest overseas in 2017?
Low returns means that every basis point counts. It should re-inforce the importance of active management in adding value to a lower absolute outcome. We are strongly committed to our overseas business and will continue to look at how we invest our capital on a global basis.
Do you consider that China is a more or less an attractive market for your business as its growing middle class comes with questions about the economy's debt buildup and rising political and regulatory risks?
China in terms of size and growth will continue to rate highly and outscore many other regions but this needs to be balanced against black swan events as a result of political and regulatory risks that can quickly reverse a business model.
How concerned are you about Australia losing its AAA credit rating? What, in your opinion, are the implications for your business of a cut in the rating?
Australia losing its credit rating is a question of when not if. Key implication is the rating of Australian banks which cannot be higher than the sovereign and the flow effects of this on the banks funding and line of credit we may have with the banks.
Are you worried about the chaos and dysfunction in Canberra? What policy reforms do you think should be prioritised in the interests of the nation in 2017?
If I was to be worried about chaos and dysfunction in Canberra then I will never get out of that state. Unfortunately, it is part of the process and the better approach is to learn to work within the constraints. Biggest policy reform is around tax, dealing with an ageing population and the strains that will put on the economy and the short term decision making of governments that is made in the vacuum of any clear long term goals
What do business leaders need to do in response to the anti-business sentiment on both sides of politics and in the broader community?
It requires a position on long term goals that most key stakeholders can agree to. Business should map out a clear long term strategic goal in terms of their role and priority to assist in building a growing economy that will create jobs, and deal with equality. Business needs to regain the trust of the community and that people at the top are also looking after the "ordinary person". It will come down to clear goal setting that is real and achievable, education, training and creating opportunity.
Are you more or less likely to invest in automation this year than last year? If so what type of automation? Also, what are the specific measures you are taking to digitise your business?
Automation is not a big part of what we do. As a business that is reliant on people most of our focus is on creating an environment that fosters diverse views, challenges conventional thinking, focus on excellence and processes that allows the business to make the right decisions.
How much risk of power interruptions and cost increases do you assess for your business as baseload coal power generation is phased out and the electricity system becomes more reliant on renewables such as wind power?
With 75 per cent of our business offshore it is not clear what the full implications would be.
Do you think the RBA will raise or lower interest rates next year?
Still room for further cuts particularly if the Australian Dollar continues its rise
Do you feel positive or negative about a Trump presidency and why?
Negative. Creates a very high level of uncertainty around policy setting and potential for ad-hoc outcomes which could lead to unintended outcomes.
What are the challenges, if any, to increasing the percentage of female leadership at your firm? What are the numbers and percentage of women who are direct reports to the CEO at your firm?
Tapping into a limited pool of talent given the growing deamnd for skilled females. Of the senior management team there are 17 people including the CEO which consists of 29 per cent females.
Ian Narev, CBA
How is the world of low returns impacting on your business and your decision making? Are you more or less likely to invest overseas in 2017?
We continue to see geo-political volatility, and therefore market volatility. People adopt new mantras such as "lower for longer" and then situations change quickly. We believe firmly in sticking to long term strategies, and not knee-jerking, but making sure we understand the impact of volatility on those strategies.
Do you consider that China is a more or less an attractive market for your business as its growing middle class comes with questions about the economy's debt buildup and rising political and regulatory risks?
China is vast, complex and opaque. We have no expert insight, and therefore no grand strategies for the Chinese market.
How concerned are you about Australia losing its AAA credit rating? What, in your opinion, are the implications for your business of a cut in the rating?
If Australia were to lose the AAA rating, the question is why, and for how long. For example, if it is lost temporarily to fund productive infrastructure, that could be good for our long term economic future. If it is lost because current revenue cannot cover current expenditure, that would be a bad outcome. We need to separate our scrutiny between capital account and current account.
Are you worried about the chaos and dysfunction in Canberra? What policy reforms do you think should be prioritised in the interests of the nation in 2017?
Governing is hard everywhere. Just take a look at the world around us. That won't change any time soon. The question is how to get good long-term policy done within that environment, rather than arguing naively for political nirvana. Priority should be given to job creation, and the combination of skill-building and investment policies that can give firms the confidence to create jobs, and people the critical training to help adapt their skills for where jobs will be created in the future.
What do business leaders need to do in response to the anti-business sentiment on both sides of politics and in the broader community?
We need to listen openly and non-defensively. We need to be prepared to change to reflect changing expectations. And we also need to communicate simply about the important contribution that business makes to economic and social prosperity, in particular job creation.
Are you more or less likely to invest in automation this year than last year? If so what type of automation? Also, what are the specific measures you are taking to digitise your business?
Our commitment to technology has been going for many years, and will continue for many more. Innovating at the customer interface, and innovating for productivity, have equal footing and are both critical for survival.
How much risk of power interruptions and cost increases do you assess for your business as baseload coal power generation is phased out and the electricity system becomes more reliant on renewables such as wind power?
The reliable, efficient and sustainable supply of energy is critical for the economy. We have our part to play particularly in the funding of renewables, which has a great deal of focus within the bank.
Do you think the RBA will raise or lower interest rates next year?
We expect global volatility, which leads to interest rate volatility. Our economists suggest that the rate cutting cycle is over, and that is the most likely scenario. But things change.
Do you feel positive or negative about a Trump presidency and why?
It is extraordinary how many points being made by commentators on all sides of the political and economic spectrum now are put down to "lessons from Trump's election". Let's just wait and see.
What are the challenges, if any, to increasing the percentage of female leadership at your firm? What are the numbers and percentage of women who are direct reports to the CEO at your firm?
Half my direct reports are women. We have worked hard at this and will continue to, along with other aspects of diversity that are important for long term business success.
![Brian Benari, CEO Challenger](http://web.archive.org./web/20161210140042im_/http://www.smh.com.au/content/dam/images/g/q/t/s/8/b/image.imgtype.articleLeadwide.620x349.png/1481279132046.png)
Brian Roland Benari, Challenger
How is the world of low returns impacting on your business and your decision making? Are you more or less likely to invest overseas in 2017?
In a lower return environment with uncertain outcomes retirees are seeking guaranteed income streams and this has driven our annuity sales, which have risen 22 per cent this year.Investing is a global business and we will continue to invest overseas appropriately through our European funds management business. Our relationship with MS Primary Life Insurance of Japan, whereby we use our risk management and investment capabilities to support AUD annuities for Japan, will continue to be a focus for Challenger.
Do you consider that China is a more or less an attractive market for your business as its growing middle class comes with questions about the economy's debt buildup and rising political and regulatory risks?
Our domestic growth and opportunities coupled with our recently announced relationship with MS Primary Life Insurance of Japan means we have no plans to invest in China.
How concerned are you about Australia losing its AAA credit rating? What, in your opinion, are the implications for your business of a cut in the rating?
A cut in the credit rating would have an impact on all Australians and hence we expect all sides of politics to take steps necessary to strengthen Australia's fiscal position.
Are you worried about the chaos and dysfunction in Canberra? What policy reforms do you think should be prioritised in the interests of the nation in 2017?
Our superannuation system is seen internationally as a leader in generating savings in the run up to retirement but it lags when it comes to converting those savings into sustainable lifetime income. That has an impact on the livelihoods of retirees, a great many of whom are worried they will outlive their savings.The Government has recognised this weakness and is moving ahead with legislation that will ensure superannuation is focused on providing income in retirement with a wider range of products available. With the fast rising numbers of people moving into retirement in Australia, there's a real urgency to complete this reform through legislation for Comprehensive Income Products for Retirement.
What do business leaders need to do in response to the anti-business sentiment on both sides of politics and in the broader community?
Businesses need to work harder to connect to people and to be very clear about their purpose as a business. To do that they need to have a well understood sense of purpose and to be very transparent about how they contribute positively to the economy and society.In Challenger's case our purpose is to provide customers with financial security for retirement. That clear sense of purpose makes it easier for us when we are communicating with policymakers, the superannuation industry and the broader community.
Are you more or less likely to invest in automation this year than last year? If so what type of automation? Also, what are the specific measures you are taking to digitise your business?
We are continuing to invest in digital distribution technology with retail superannuation platforms and superannuation industry funds to make our products more readily available to today's retirees.
How much risk of power interruptions and cost increases do you assess for your business as baseload coal power generation is phased out and the electricity system becomes more reliant on renewables such as wind power?
This is not currently a concern.
Do you think the RBA will raise or lower interest rates next year?
Bond markets are suggesting the next interest rate movement is likely to be up but we're not predicting the timing.
Do you feel positive or negative about a Trump presidency and why?
No point in being positive or negative about a Trump presidency. Australia is going to have to work with the new US administration and be aware of the impacts from a rise in populism in many countries.
What are the challenges, if any, to increasing the percentage of female leadership at your firm? What are the numbers and percentage of women who are direct reports to the CEO at your firm?
The CEO has two direct reports (22 per cent of direct reports). Of senior leadership, 27 per cent are female. We are actively looking to increase the number of female leaders and have published targets to increase this to 32 per cent by the end of 2017 and 38 per cent by 2020.
Darren Steinberg, Dexus Property Group
How is the world of low returns impacting on your business and your decision making? Are you more or less likely to invest overseas in 2017?
Lower yields on a variety of assets is reducing the required yields on real estate investments and increasing the demand for real estate. This makes the transaction market more competitive leading us to be selective with investments and seek assets where we can apply our expertise to add value over and above the current income yield. This situation is global, but it doesn't by itself make us more likely to invest offshore. We are committed to remaining solely invested in Australian property.
Do you consider that China is a more or less an attractive market for your business as its growing middle class comes with questions about the economy's debt buildup and rising political and regulatory risks?
Our focus is domestic, but we do see the influence of growth in the Chinese middle class positively impacting the Australian property market through higher levels of foreign investment in real estate, rising levels of tourism and growth in the education sector. The various risks around China are predominantly a concern from a macro-economic view point and for cross border capital flows. However we are confident in the ability of China's leadership to manage their economy effectively to avert any major downturns.
How concerned are you about Australia losing its AAA credit rating? What, in your opinion, are the implications for your business of a cut in the rating?
I don't think it would have a substantial impact. Australia is one of only a few nations with AAA rating (the US is AA+ and the Japan A+). It would mildly increase the cost of funding for governments and banks, which have an implicit government guarantee on deposits. If these higher costs were passed to consumers and business, then we expect market rates may stay lower for longer with little net change to funding costs.
Are you worried about the chaos and dysfunction in Canberra? What policy reforms do you think should be prioritised in the interests of the nation in 2017?
Businesses need consistency, continuity and direction in policy. If Australia is to prosper in a rapidly changing and competitive world, then we need to keep improving our tax system, superannuation system, labour market, education/health sectors and State/Federal relations. We need an effective system for countering climate change and need Governments to truly help foster an innovative economy. An internationally competitive tax regime would be my priority to ensure we continue to attract and retain those businesses and individuals who have chosen Australia to locate themselves.
What do business leaders need to do in response to the anti-business sentiment on both sides of politics and in the broader community?
Anti-business sentiment appears linked to a general sense of inequality and a lessening of trust that people place in institutions of all types whether it be government or business. Clearly businesses need to behave responsibly, pay their share of tax, contribute to their community, be environmentally responsible, and be ready to articulate the value they add to the country either through employment or investment.
Are you more or less likely to invest in automation this year than last year? If so what type of automation? Also, what are the specific measures you are taking to digitise your business?
In the past 18 months we have invested in a major technology and automation program to improve our customer and leasing experience and drive operational efficiency across financial processes and management reporting. Next year we intend to continue our investment at a similar level with further automation of our core office processes. From a digitisation perspective, we've made a significant investment in our online presence, digitising the communications and providing an online concierge medium for our customers, and improving their sales and on-boarding experience.Every platform we develop is mobile enabled to provide flexibility for our customers and make it easy for them to do business with us. We also recognise data and customer insights as an asset for our business, and effective management and digitisation of this resource is key to future business success.
How much risk of power interruptions and cost increases do you assess for your business as baseload coal power generation is phased out and the electricity system becomes more reliant on renewables such as wind power?
It is inevitable that over time new, less carbon intensive fuel sources will slowly replace some of the traditional coal power capacity. This is the clear trend worldwide and we've been supporting the renewables sector for many years through the purchase of Green Power. The challenge for business and governments is to handle that transition so that the system remains reliable. Distributed generation or power storage may both have roles to play. We've driven down emissions by 40 per cent since 2008 through investing in new technology, tuning for efficiency.
Do you think the RBA will raise or lower interest rates next year?
Despite employment growth and retail spending in Australia being positive, they are both softening, and the residential construction cycle may be peaking. So we expect the next move in interest rates will be more likely down rather than up next year, however I am anticipating a year of relatively flat interest rates.
Do you feel positive or negative about a Trump presidency and why?
It is still too early to tell what affect the new US Administration will have on the world economy, and it is not clear how much of the Trump pre-election platform will implemented. Markets have been buoyed by the possibility of a short term stimulus to the US economy and bond yields have risen accordingly, but this may settle down as the dust settles. The main sensitivities for Australia are a prolonged lift in global interest rates, slowing of trade volumes in Asia Pacific region due to trade barriers or rise in geo-political risk which affects confidence. The biggest risk is Australia getting caught in a trade war between the US and China.
What are the challenges, if any, to increasing the percentage of female leadership at your firm? What are the numbers and percentage of women who are direct reports to the CEO at your firm?
When I joined the property industry, the leadership was the domain of men. One of our current challenges we face remains improving our gender diversity at the leadership level. We have focused on creating a workplace that cultivates diverse views and an inclusive mindset, which has been assisted by more than half of our workforce being female and diverse in other ways. Two of our executive management team and three of our Directors are female. We've had a strong and encouraging response from females to our two year graduate program and we aim to use this as a springboard for the future leaders of the industry. Through this and other initiatives we are building a pipeline of future female talent.
Greg Hywood, Fairfax Media
How is the world of low returns impacting on your business and your decision making? Are you more or less likely to invest overseas in 2017?
Any business that is not looking at offshore opportunities, particularly in Asia, is not fulfilling its responsibilities to shareholders.
Do you consider that China is a more or less an attractive market for your business as its growing middle class comes with questions about the economy's debt buildup and rising political and regulatory risks?
China is the powerhouse of the world economy and is likely to be so for the foreseeable future. A more certain regulatory environment would encourage investment into that market.
How concerned are you about Australia losing its AAA credit rating? What, in your opinion, are the implications for your business of a cut in the rating?
In a period of excessive debt, it is important that the government does all that it can to retain the AAA rating, especially its efforts in delivering budget rigour.
Are you worried about the chaos and dysfunction in Canberra? What policy reforms do you think should be prioritised in the interests of the nation in 2017?
A lack of majority in both houses has meant successive governments have failed to deliver sustained economic reform. Our business has an interest in seeing media ownership law reform passed next year, but the bigger issue for the nation is budget repair and a deliverable growth agenda.
What do business leaders need to do in response to the anti-business sentiment on both sides of politics and in the broader community?
The business community generally lacks understanding of the complexity of government, particularly the demands of multi-layered stakeholder management. Simplistic proposals to government which smacks of self interest does business no good in its efforts to garner community respect. More thought needs to go into both the development and communication of a growth agenda that deals with the stresses many in the community are undergoing through rapid economic adjustment.
Are you more or less likely to invest in automation this year than last year? If so what type of automation? Also, what are the specific measures you are taking to digitise your business?
Automation, artificial intelligence, virtual reality - you name it - technological advances provide risk and reward for all business. Our responsibility to shareholders is to make the right choices.
How much risk of power interruptions and cost increases do you assess for your business as baseload coal power generation is phased out and the electricity system becomes more reliant on renewables such as wind power?
Certainty of supply is a critical issue for all businesses with substantial manufacturing infrastructure, e.g. printing presses. Any transition of power source has to keep supply guaranteed as a core requirement of change.
Do you think the RBA will raise or lower interest rates next year?
That largely depends on whether the Trump administration adds significantly to global demand through its promises of fiscal expansion.
Do you feel positive or negative about a Trump presidency and why?
Like everyone, confused. There is already major discrepancies between campaign promises and the President Elect's subsequent statements. We really don't know what we will get.
What are the challenges, if any, to increasing the percentage of female leadership at your firm? What are the numbers and percentage of women who are direct reports to the CEO at your firm?
At Fairfax, more women than men were appointed to senior management roles in 2016; with women in 34 per cent of senior roles overall. Clearly we need to do more.
Nev Power, Fortescue Metals Group
How is the world of low returns impacting on your business and your decision making? Are you more or less likely to invest overseas in 2017?
For 2017, we'll be continuing our drive on improving productivity and efficiency to further reduce our costs, with strong cash flows allowing us to continue debt repayment.
Future investment will focus on maintaining mine life and sustaining product quality in our core iron ore business in the Pilbara, with low cost future options being explored in Australia and internationally.
Do you consider that China is a more or less an attractive market for your business as its growing middle class comes with questions about the economy's debt buildup and rising political and regulatory risks?
We remain confident in both the short and long-term fundamentals of the Chinese market with urbanisation and development set to continue at current underlying rates, sustaining steady demand for steel.
The effectiveness of the Chinese Government's policy settings will be a critical factor in determining ongoing rates of growth.
How concerned are you about Australia losing its AAA credit rating? What, in your opinion, are the implications for your business of a cut in the rating?
The corporate sector will be looking for policy decisions which create a strong environment for business to encourage investment, jobs and positive growth. In these circumstances, the ratings should then take care of themselves.
It's important to have a strong rating which supports domestic borrowing rates and therefore the cost of debt sourced in Australia.
Are you worried about the chaos and dysfunction in Canberra? What policy reforms do you think should be prioritised in the interests of the nation in 2017?
It is imperative that Government, Opposition and cross benchers work constructively within the Parliament to ensure stability and build business and community confidence. There are significant benefits for the economy if a clear policy environment and positive investment climate for business can be assured.
Closing the gap for Aboriginal people remains a major challenge for our generation. The success of the Vocational Training and Employment Centre (VTEC) model for Fortescue and the Australian Government shows the value of guaranteed jobs and training for Aboriginal people, rather than simply replacing government welfare with mining royalty welfare.
What do business leaders need to do in response to the anti-business sentiment on both sides of politics and in the broader community?
It is the responsibility of business to engage more with our politicians both in government and in opposition to ensure a clear understanding of each other's priorities.
Moving to the extreme left or extreme right of the political spectrum in a chase for votes does not create a sustainable, productive situation for economic growth. Governments need to provide the stability and policy environment that encourages business investment and the resulting economic growth, jobs and stronger communities.
Are you more or less likely to invest in automation this year than last year? If so what type of automation? Also, what are the specific measures you are taking to digitise your business?
Our focus remains firmly on continuing to improve productivity and efficiency for ongoing cost improvements, debt reduction and enhanced shareholder value.
Fortescue is adopting leading edge technology across our business. During 2016, we continued to expand our autonomous haulage fleet at the Solomon Hub and our Integrated Control Centre (IOC) in Perth. These projects will continue in 2017 as we maximise the benefits of technology and innovation to remain at the lowest end of the global cost curve.
How much risk of power interruptions and cost increases do you assess for your business as baseload coal power generation is phased out and the electricity system becomes more reliant on renewables such as wind power?
Australia has a rich endowment of natural energy sources, including natural gas which will provide a cost-competitive transition to a lower carbon outcome for our economy. Ensuring we have the right policy settings to enable this transition to take place will be very important.
Ultimately, energy security is paramount and we need a sustainable energy market to ensure future development.
Do you think the RBA will raise or lower interest rates next year?
The RBA will no doubt be watching the US with interest to assess the outcomes of their decisions. If US rates increase as anticipated we may see a decrease in our interest rates and in turn deflationary pressure on the Australian dollar.
Do you feel positive or negative about a Trump presidency and why?
Once Mr Trump has settled into his presidency, the opportunities for our industry and our country will become clearer.
Australia's relationship with the US is bigger than any one President. I am confident that Australia will continue to use its diplomacy to be a constructive voice internationally and to ensure Australia's interests are at the forefront.
What are the challenges, if any, to increasing the percentage of female leadership at your firm? What are the numbers and percentage of women who are direct reports to the CEO at your firm?
• Fortescue's focus on diversity in our workforce includes diversity of perspectives, experience, culture, gender and age. Gender diversity is an important element and it goes hand in hand with the other measures such as Aboriginal employment that are part of Fortescue's culture.
• We include performance on gender diversity in our quarterly reporting and internally focus on the issues that make a difference by ensuring that our workplaces are supportive of women, options for child care and flexible working arrangements are provided, and that we encourage those with families returning to the work force.
• Fortescue's Aboriginal employment rose to 15 per cent of the workforce by the end of the September quarter 2016, with Aboriginal women comprising 22 per cent of the Aboriginal workforce. Fortescue and its contractors employ more than 1,100 Aboriginal people across Fortescue sites.
• Fortescue's female participation rate in the workforce is now at 16 per cent. Of my direct reports, 20 per cent are female. Fortescue is proud to be a member of the 30 per cent Club and, following the announcement of two new Directors in November, Fortescue is the first ASX Top 20 Company with five female board members.
Peter Harmer, IAG
How is the world of low returns impacting on your business and your decision making? Are you more or less likely to invest overseas in 2017?
We've been operating in a low interest rate environment for a sustained period of
time so we've come to live with the challenges that brings. From an investment point of view, we need to continue to invest in quality assets rather than take on more risk simply to satisfy a desire for higher yield.
From a business point of view, we take a similar approach – invest where we see
value over the long term. This means we will continue to invest in our home markets of Australia and New Zealand, but we will also look for opportunities to further grow our presence in our existing markets in Asia where it makes sense.
Our overseas investment portfolio is diversified and the international environment presents a greater breadth of investment opportunities. Globally, the increasingly desynchronised growth and inflation environment will favour some assets and jurisdictions over others.
Do you consider that China is a more or less an attractive market for your business as its growing middle class comes with questions about the economy's debt buildup and rising political and regulatory risks?
While we believe in the fundamentals of China and the insurance market is well
developed there, our focus is on pursuing growth opportunities in our other Asian markets where it makes sense, and our core Australian and New Zealand businesses. Like many businesses, our current view is that while there is opportunity in China, the investment required to deliver a meaningful return exceeds our risk appetite.
How concerned are you about Australia losing its AAA credit rating? What, in your opinion, are the implications for your business of a cut in the rating?
A drop in Australia's AAA credit rating could see less demand for Australian bonds from offshore buyers and may see a change in the yield curve, but it's more likely to translate into a lower Australian dollar.
The cascading effect to any regulated entity such as insurance companies or the
banks, might require us to hold more capital, but as we are strongly capitalised, this is less of a concern for us.
Are you worried about the chaos and dysfunction in Canberra? What policy reforms do you think should be prioritised in the interests of the nation in 2017?
The business of government goes on, but difficult decisions are required and we are concerned that reform will be incremental. Politics has taken over policy and we need the focus to be on key policy reforms to advance the nation.
We need to clearly delineate the responsibilities between Federal and State
Governments and develop a tax regime that removes the vertical fiscal imbalance.
And irrespective of the US position on the Trans Pacific Partnership, we need to work with likeminded nations to make it happen and enable better trading outcomes for our economy.
What do business leaders need to do in response to the anti-business sentiment on both sides of politics and in the broader community?
Business leaders need to listen to what our customers and the community are telling us and act on it. We need to continue to engage with all sides of politics including the minor and micro parties. And we need to emphasise that business is about delivering better outcomes for customers and small business partners, while ensuring a reasonable return to the shareholders, and doing it a way that meets community expectations – it's not a zero sum game.
Are you more or less likely to invest in automation this year than last year? If so what type of automation? Also, what are the specific measures you are taking to digitise your business?
We are continuing our investment in automation this year as it will make our business simpler and more efficient, and more importantly, easier for our customers to deal with us.
We are bringing together human centred design principles and disruptive technologies as part of investing in automation across our business. Examples of this range from complex back-end technology processing, to simply digitising files. In one single digitisation project, we scanned 12.6 tonnes or about 2.5 million pages of case files to make it easier for our team to access claims information.
How much risk of power interruptions and cost increases do you assess for your business as baseload coal power generation is phased out and the electricity system becomes more reliant on renewables such as wind power?
N/A
Do you think the RBA will raise or lower interest rates next year?
Our view is that the RBA will continue to be very considered in what actions it takes.
We expect interest rates will remain low for some time as the Australian economy has withstood the testing global economy of recent years and the global economy is likely to turn a corner to grow moderately next year.
Do you feel positive or negative about a Trump presidency and why?
Some of the rhetoric throughout the election campaign was alarming, and while it's early days, it does seem to have moderated since then. Donald Trump's ascendancy to the position of President-elect of the United States provides a valuable lesson.
People are feeling disenfranchised with large institutions. Governments and businesses alike need to clearly articulate their vision including the need for reform, listen to their constituents or customers and address the needs of the people who feel they have been left behind.
What are the challenges, if any, to increasing the percentage of female leadership at your firm? What are the numbers and percentage of women who are direct reports to the CEO at your firm?
IAG and the general insurance industry, has traditionally been an industry as far
Christopher Kelaher, IOOF Holdings
How is the world of low returns impacting on your business and your decision making? Are you more or less likely to invest overseas in 2017?
In a world of low returns, a complex financial environment means that people are actively seeking quality advice to ensure they are meeting their financial goals.
As a Group, we have been domestically focussed which will remain the case during 2017. On behalf of our clients, we will continue to invest in diversified portfolios including in international markets to deliver the best outcomes and help them secure their long-term financial future.
Do you consider that China is a more or less an attractive market for your business as its growing middle class comes with questions about the economy's debt buildup and rising political and regulatory risks?
China remains a highly attractive market for the Australian economy in general. We also know that Chinese investors have a lot of interest in the Australian market as it is recognised for having one of the best superannuation systems in the world and ergo wealth management industries.
How concerned are you about Australia losing its AAA credit rating? What, in your opinion, are the implications for your business of a cut in the rating?
Although we are not heavily geared, we remain on prudent watch for anything that would affect interest rates as this could potentially increase our funding costs
Are you worried about the chaos and dysfunction in Canberra? What policy reforms do you think should be prioritised in the interests of the nation in 2017?
The nation and the business community crave certainty and stability. In particular, when it comes to changes to superannuation where long term planning is essential to the integrity of the system. We would exhort all politicians to ensure spending control protocols are a priority in the coming year.
What do business leaders need to do in response to the anti-business sentiment on both sides of politics and in the broader community?
We need to ensure that consumers are fully informed of the benefits that businesses bring to their communities. As one of the largest advice businesses in Australia, we remain committed to lifting and maintaining the high quality of advice available to Australians. IOOF was established 170 years ago to help people and contribute positively to the communities we operate in. We remain committed to this purpose through our IOOF Foundation and by providing financial support for various community initiatives particularly to help the aged, disadvantaged families, children and young people.
Are you more or less likely to invest in automation this year than last year? If so what type of automation? Also, what are the specific measures you are taking to digitise your business?
We will continue to successfully invest in automation of various business processes. Internally, we have an innovation program which taps into the many talents of our people to continue to identify ways, including using digitisation, to better serve our clients.
How much risk of power interruptions and cost increases do you assess for your business as baseload coal power generation is phased out and the electricity system becomes more reliant on renewables such as wind power?
We have comprehensive disaster recovery and business continuity plans in place, which are designed to prevent and/or manage with immediate effect any interruption. We are very cautious in safeguarding business continuity to ensure we can provide ongoing access to our products and services for our clients.
Do you think the RBA will raise or lower interest rates next year?
The risk is on the upside.
Do you feel positive or negative about a Trump presidency and why?
The US electorate system is a strong, robust, democratic system. Their democracy has been operating successfully with strong checks and balances for hundreds of years.
What are the challenges, if any, to increasing the percentage of female leadership at your firm? What are the numbers and percentage of women who are direct reports to the CEO at your firm?
I have 4 women reporting directly to me. On our Board, female representation is 33 per cent at 2 of 6. We look at diversity as more than just gender diversity and look to have a team of leaders who inspire based on a collection of various skills, experiences, backgrounds and ways of thinking.
Richard Umbers, Myer
How is the world of low returns impacting on your business and your decision making? Are you more or less likely to invest overseas in 2017?
Our investment is aligned with our New Myer strategy and focused on returns in Australia.
This is year two of our transformation and customers are already seeing Myer in a new light, as we shape the range and lift customer service.
Do you consider that China is a more or less an attractive market for your business as its growing middle class comes with questions about the economy's debt buildup and rising political and regulatory risks?
The majority of our Myer Exclusive Brands merchandise is sourced from China through our dedicated sourcing offices located in Hong Kong and Shanghai.
Myer is committed to sourcing merchandise that is produced in safe and fair working conditions, where the human rights of workers are respected.
How concerned are you about Australia losing its AAA credit rating? What, in your opinion, are the implications for your business of a cut in the rating?
It would be disappointing for Australia to lose our AAA credit rating. As a retailer, we welcome decisions that improve consumer confidence and stimulate discretionary spend.
Are you worried about the chaos and dysfunction in Canberra? What policy reforms do you think should be prioritised in the interests of the nation in 2017?
While changes to penalty rates and deregulated trading hours will help us provide better customer service, we are more focused on the changes we can make within our own business to the benefit of customers, team members, and shareholders.
What do business leaders need to do in response to the anti-business sentiment on both sides of politics and in the broader community?
Customers expect innovation. As business leaders, we need to embrace new technology and digital services to improve customer experiences, which is one of the priorities of our New Myer strategy.
Are you more or less likely to invest in automation this year than last year? If so what type of automation? Also, what are the specific measures you are taking to digitise your business?
Technology is a powerful tool to help us improve our customer service. Our store teams now have 2,500 iPads to assist customers in purchasing items from a range beyond that available in store, and to free up team members to spend more time with customers in the store.
How much risk of power interruptions and cost increases do you assess for your business as baseload coal power generation is phased out and the electricity system becomes more reliant on renewables such as wind power?
Productivity and reducing costs are a critical part of New Myer and we continue to review our costs on an ongoing basis.
Do you think the RBA will raise or lower interest rates next year?
Our business transformation is not dependent on higher or lower interest rates, however moves to stimulate discretionary spend and improve consumer confidence would be welcomed by retailers.
Do you feel positive or negative about a Trump presidency and why?
Myer is focused on what we can control, which means delivering our New Myer strategy and bringing the love of shopping to life for our customers. Our strategy is designed to build resilience against external factors that impact our customers and the broader economy.
What are the challenges, if any, to increasing the percentage of female leadership at your firm? What are the numbers and percentage of women who are direct reports to the CEO at your firm?
Myer has a strong record on diversity and we support diversity of gender, age, language, disability and cultural backgrounds through our Diversity Policy. 80 percent of our workforce is female and 50 percent of our Senior Leadership Team is female. In addition, 55 percent of our General Manager group is female including our two female General Managers at our Flagship Melbourne and Sydney City stores.
Andrew Thorburn, NAB
How is the world of low returns impacting on your business and your decision making? Are you more or less likely to invest overseas in 2017?
In our own business – and across our customer base – there's a strong focus on finding ways to do business smarter, easier and better. We continue to invest and innovate to serve our customers better - but we will be funding initiatives by finding efficiencies, targeting manual policies and processes that cost time and money.
Do you consider that China is a more or less an attractive market for your business as its growing middle class comes with questions about the economy's debt buildup and rising political and regulatory risks?
There continues to be huge growth potential for Australian services, particularly health and education, as well as agribusiness sectors with a growing market for premium Australian produce in China. As Australia's biggest business bank, we are focussed on helping these businesses to grow and do business in China and across Asia.
How concerned are you about Australia losing its AAA credit rating? What, in your opinion, are the implications for your business of a cut in the rating?
It is in all our interests that both sides of politics continue to focus on budget savings measures that support a strong sovereign rating for Australia. It directly influences the credit ratings of the banks – and currently, as some of the world's highest rated banks, we can access wholesale term funding at more competitive rates than other banks around the world.
Are you worried about the chaos and dysfunction in Canberra? What policy reforms do you think should be prioritised in the interests of the nation in 2017?
I spend a lot of time on the road visiting customers right across Australia and it is clear that our customers – small and big business owners, families, retirees – are looking for certainty. In an uncertain geopolitical landscape, Australians want to have confidence in the future, that there will be jobs and opportunities for them and for their children.
Australia's economy is fundamentally sound but we need leadership and long term thinking from business and government - to help build greater confidence, to encourage investment and growth, to create jobs and boost spending.
Our fast-growing population creates economic opportunity but is putting pressure on housing, schools, hospitals, roads and public transport - and we are seeing the strain in Melbourne and Sydney in particular. Through urban planning and infrastructure investment, there is an opportunity to develop Australia's regional hubs – cities like Geelong, Newcastle and Toowoomba.
What do business leaders need to do in response to the anti-business sentiment on both sides of politics and in the broader community?
Australians rightly expect that large businesses contribute to the community – and it's our responsibility to do a better job at explaining what we do for our customers, our shareholders and the economy more broadly. NAB is proud to lend more than $2 billion a month to businesses that are starting, growing and creating jobs. And every month we lend $4 billion a month to homeowners wanting to buy or renovate a property. This year we returned 80 per cent of our profits, more than $5 billion, to over half a million Australian shareholders, plus those who are investors in NAB through their super.
In 30 years of banking, I have learnt that to build trust across the community, we first have to achieve the advocacy of our customers. That means helping them make good decisions with money, fixing problems when we find them, offering innovative new products and services and supporting them through the hard times. We know there's things we need to do better and remain committed to improving consumer outcomes.
Are you more or less likely to invest in automation this year than last year? If so what type of automation? Also, what are the specific measures you are taking to digitise your business?
We are making it faster and easier for customers to do business with us, by using technology to simplify our products and systems. This year we launched a new technology platform (called PBOP) which makes it much faster to apply for and to approve products for customers, including home loans and credit cards. Looking ahead we'll be finding ways to further innovate and automate processes where we can - but remembering that banking is a people business and there will always be a need for conversations between a customer and their banker.
How much risk of power interruptions and cost increases do you assess for your business as baseload coal power generation is phased out and the electricity system becomes more reliant on renewables such as wind power?
Australians need access to secure, reliable and affordable energy – and it's important that the transition to a low-carbon economy is well-considered and orderly. As Australia's leading lender to renewable energy projects, we would support greater policy certainty to give the sector confidence to invest.
Do you think the RBA will raise or lower interest rates next year?
NAB is forecasting the RBA will make two more interest rate cuts next year.
Do you feel positive or negative about a Trump presidency and why?
Many are rightly cautious about the US economy, given some of the uncertainty following the election. If the President-elect does reduce tax rates and invest in infrastructure, it could be a good thing for the economy for the next couple of years.
What are the challenges, if any, to increasing the percentage of female leadership at your firm? What are the numbers and percentage of women who are direct reports to the CEO at your firm?
Banking is traditionally male-dominated and we need to actively create an inclusive environment, if we want to a strong pipeline of diverse talent - women, men, people of all ages, backgrounds and sexual preferences. In particular, flexibility needs to be a normal part of how we do business – for all of our people, at all stages of life.
I'm pleased to see an increase in the proportion of talented women in our Executive Management ranks – the top three layers reporting to me – now 38 per cent, against our target of 34 per cent for the year. Specifically, Angela Mentis, Cathryn Carver and Lorraine Murphy sit on my Executive Leadership Team, running critical parts of our business – they are strong leaders and role models for all NAB people.
Mark Fitzgibbon, NIB
How is the world of low returns impacting on your business and your decision making? Are you more or less likely to invest overseas in 2017?
Not a lot. We're focused upon growing our Group top line and the world of investment returns are what they are. Cheaper debt has certainly made investment opportunities more doable.
Do you consider that China is a more or less an attractive market for your business as its growing middle class comes with questions about the economy's debt buildup and rising political and regulatory risks?
China's positive influence on Australia's future is inestimable. Somehow we need to hitch a wagon to China. It sure wont be risk free but the potential rewards are enormous. Forget debt levels - there's 1.5 billion consumers.
How concerned are you about Australia losing its AAA credit rating? What, in your opinion, are the implications for your business of a cut in the rating?
Very concerned both in terms of cost of capital and international business standing. We just have to improve productivity.
Are you worried about the chaos and dysfunction in Canberra? What policy reforms do you think should be prioritised in the interests of the nation in 2017?
I think we over rate the importance of Government. Good policy and regulation are important but generally don't hold back creativity, innovation, continuous improvement and sensible investment. we desperately need another round of contestability of public expenditure like Hilmer delivered.
What do business leaders need to do in response to the anti-business sentiment on both sides of politics and in the broader community?
Get even better at whatever need the business is satisfying for people.
Are you more or less likely to invest in automation this year than last year? If so what type of automation? Also, what are the specific measures you are taking to digitise your business?
Yes. Ongoing development of transactional services but especially in putting information in the hands of consumers via mobile m make better choices around healthcare treatment and doctor/dentist/provider.
How much risk of power interruptions and cost increases do you assess for your business as baseload coal power generation is phased out and the electricity system becomes more reliant on renewables such as wind power?
We haven't. And believe in renewables.
Do you think the RBA will raise or lower interest rates next year?
Raise.
Do you feel positive or negative about a Trump presidency and why?
We always err on the sunny side. Only time will tell. I like the idea of having to repeal a law for everyone enacted.
What are the challenges, if any, to increasing the percentage of female leadership at your firm? What are the numbers and percentage of women who are direct reports to the CEO at your firm?
Only one direct report and we need to do better.
Alberto Calderon, Orica
How is the world of low returns impacting on your business and your decision making? Are you more or less likely to invest overseas in 2017?
Since the end of the commodities price boom in 2012, lower returns and increased market headwinds have been a challenge for the mining services industry generally. There has been some external optimism on market conditions and we have seen some stabilisation. While we are not prepared to call the bottom of the cycle at this stage, we do believe we are at a strategic inflection point.
In terms of investment, we have just emerged from a period of significant investment and our immediate focus is on transforming ourselves into a leaner and more efficient company and squeezing more out of the assets we have. We expect 'self-help' initiatives to offset the headwinds we will continue to face in FY17.Since the end of the commodities price boom in 2012, lower returns and increased market headwinds have been a challenge for the mining services industry generally. There has been some external optimism on market conditions and we have seen some stabilisation. While we are not prepared to call the bottom of the cycle at this stage, we do believe we are at a strategic inflection point.
In terms of investment, we have just emerged from a period of significant investment and our immediate focus is on transforming ourselves into a leaner and more efficient company and squeezing more out of the assets we have. We expect 'self-help' initiatives to offset the headwinds we will continue to face in FY17.
Do you consider that China is a more or less an attractive market for your business as its growing middle class comes with questions about the economy's debt buildup and rising political and regulatory risks?
The China explosives market is very complex. It is best viewed not as a whole but rather as 34 quasi-independent markets. Each of these provincial-led administrations requires licencing for the manufacture of explosives as well as separate licensing for the distribution of explosives. The ability to obtain these is difficult, particularly given the general decline in explosives consumption and that there are often province owned State owned enterprises operating in the explosives sector. From a licensing perspective, the ability to move product across provinces is also challenging.
There is, though, a significant opportunity to improve the productivity of mining in China, through the efficient use of Orica's products and blasting techniques. Orica does believe that regulatory change will eventuate at some point, at which time China will become a much more attractive explosive market.
How concerned are you about Australia losing its AAA credit rating? What, in your opinion, are the implications for your business of a cut in the rating?
We should not be complacent about this. We saw relatively recently during the global financial crisis how important a strong credit rating is to investor confidence generally.
More specifically, a downgrade could push up costs in critical parts of the economy. The banks source a large portion of their funding from international bond investors for example, and if they demand higher rates, the additional cost impost could inevitably be passed through to consumers.
Australia relies so heavily on foreign investment that anything that leads to investors judging Australia as a riskier proposition relative to other countries would be concerning. It's also important that Australia maintains its top credit rating given it helps contain the costs associated with servicing public debt.
Are you worried about the chaos and dysfunction in Canberra? What policy reforms do you think should be prioritised in the interests of the nation in 2017?
We need policy settings that attract global capital so we can create jobs and growth. A transparent and competitive tax system that promotes productivity and encourages business investment would be a big step forward.
Australia needs a pro-growth agenda that includes – but is not limited to – a growth tax structure. It is evident that the current tax structure, with one of the highest corporate taxes in the developed world and one of the lowest consumption taxes, is not conducive to private sector growth (and clearly public sector growth is not going to deliver what Australia needs).
What do business leaders need to do in response to the anti-business sentiment on both sides of politics and in the broader community?
Business leaders need to reconnect and re-engage with Australians. We're seeing an increased disconnect between established institutions and the communities they serve. We need to do more to recognise and respond to changing expectations and do a better job in explaining the role for business in driving social and economic inclusion, and in contributing to a better standard of living. It's incumbent on business to ensure that we press our case more effectively with all our constituents.
Are you more or less likely to invest in automation this year than last year? If so what type of automation? Also, what are the specific measures you are taking to digitise your business?
We are likely to invest in automation this year, as we did last year also. It's not a matter of more or less likely – it will be a continued, consistent approach to our investment in automation. This investment is focused on continued automation of our assembly and packaging processes. For example, we are leading the way in the development of detonator manufacturing. The next generation of fully automated detonator assembly equipment is being installed at our site at Gyttorp, Sweden. This includes the latest generation of sensitive robots. This investment in further automation will double productivity while at the same time improving safety, quality and ergonomics.
We also see opportunities to improve outcomes for our customers. We undertake around 1,500 blasts around the world very day. This means we have an expansive 'big data' collection and knowledge base that we can leverage to enable knowledge transfer. That's an exciting opportunity for us to improve productivity for our customers, through advanced blasting services, data recording management and analysis for optimal blasting results.
How much risk of power interruptions and cost increases do you assess for your business as baseload coal power generation is phased out and the electricity system becomes more reliant on renewables such as wind power?
The key concern for us in a transition from baseload coal to renewables isn't about power interruptions. It is more about the likelihood of increasing energy prices, given we have energy intensive processes (e.g. ammonium nitrate production). We also have choices about where we manufacture our AN, given our global footprint, so any significant increase in input costs could impact our ability to manufacture cost effectively in Australia.
Do you think the RBA will raise or lower interest rates next year?
That's a matter I'll leave to others to comment on.
Do you feel positive or negative about a Trump presidency and why?
From a pure business/commercial perspective, I'm ambivalent. Our base case is that a Trump Presidency won't impact our business interests either way, and in fact he has been pretty pro-coal to date. Certainly, if he fulfils his promise of increased investment in infrastructure and support for the coal sector, that would be a positive for Orica and we could satisfy additional demand without any additional capital investment.
The key risk is clearly around the anti–free trade agenda, and more broadly there is the risk of increased market volatility because of the uncertainty around the future policy agenda.
While I have private views about the President-elect's campaign, I'll adopt a wait and see approach to his Presidency.
What are the challenges, if any, to increasing the percentage of female leadership at your firm? What are the numbers and percentage of women who are direct reports to the CEO at your firm?
The only way to get progress in this is to ensure it is part of everyone's thinking always, and taking the appropriate steps through training and development to ensure that progress isn't impeded by issues such as unconscious bias. You also need to make sure that leaders are consistently reminded that diversity should be a consideration for the short list of every senior role. While we still have a long way to go at Orica, we made great inroads in 2016. We've undertaken a comprehensive program to lift organisational capability over the past year and the number of women in senior leadership has increased from 14 per cent to 22 per cent as a result. Two of my 11 direct reports are female – so just under 20 per cent. We've also focused on cultural diversity, given the internationally dispersed nature of our business. As a result, 52 per cent of our senior leaders are now from countries other than Australia or New Zealand.
Frank Calabria, Origin Energy
How is the world of low returns impacting on your business and your decision making? Are you more or less likely to invest overseas in 2017?
We have announced a plan to focus on our energy markets business and onshore unconventional gas and LNG going forward, two areas where we have scale and where we see ourselves in terms of providing low carbon energy solutions both domestically and internationally via APLNG. Divesting our conventional gas business via IPO will allow us to pay down debt and restore our financial flexibility, at the same time retaining the benefits of the integrated model through long-term supply agreements with the new company.
Do you consider that China is a more or less an attractive market for your business as its growing middle class comes with questions about the economy's debt buildup and rising political and regulatory risks?
China's increasing actions to combat air pollution and address climate change has created a strong market for cleaner forms of energy. China is our major LNG customer and we expect demand from China and other Asian nations to grow as coal is progressively replaced with gas and renewables.
How concerned are you about Australia losing its AAA credit rating? What, in your opinion, are the implications for your business of a cut in the rating?
The focus should be more broadly on how to improve economic competitiveness, which would flow through to an improved fiscal position.
Are you worried about the chaos and dysfunction in Canberra? What policy reforms do you think should be prioritised in the interests of the nation in 2017?
Having a coherent and nationally consistent energy policy is absolutely imperative Australia is to achieve a reliable, affordable and sustainable supply of energy.
State-based targets have the potential to increase uncertainty and stifle investment right at the exact time we need to be laying out a national plan to progressively retire coal and replace it with renewables and gas.
What do business leaders need to do in response to the anti-business sentiment on both sides of politics and in the broader community?
Australians rightly have high expectations of businesses. As such, we should absolutely strive to do the right thing and be fully accountable and fix things when they go wrong. It's less about explaining and more about doing.
Are you more or less likely to invest in automation this year than last year? If so what type of automation? Also, what are the specific measures you are taking to digitise your business?
Automation is vital for our business. Our upstream LNG operations in Queensland are spread a huge geographical area and we can operate 15 gas plants, more than 1,400 wells and 900 km of pipelines remotely through our Brisbane Central Control Room.
In our retail business, we have invested significantly behind the meter in anticipation of growth in distributed generation. As battery and solar technology get better and start to make sense for the broader market, we will be there to help those households to make the transition.
How much risk of power interruptions and cost increases do you assess for your business as baseload coal power generation is phased out and the electricity system becomes more reliant on renewables such as wind power?
We work with industrial customers every day and are very conscious of impacts of pricing on them. The South Australian experience shows us that you cannot introduce renewables into the system without at the same time shoring up reliability, or prices are affected. We absolutely believe that renewables are the future, but that you also need gas to provide operational and price stability.
Do you think the RBA will raise or lower interest rates next year?
I'll leave speculating on interest rate movements to those better qualified to do so.
Do you feel positive or negative about a Trump presidency and why?
There has been a distinct change in the president-elect's tone post-election than during the campaign itself. As such, we really have to wait and see what happens when he assumes office.
What are the challenges, if any, to increasing the percentage of female leadership at your firm? What are the numbers and percentage of women who are direct reports to the CEO at your firm?
There is one female on the executive management team (out of eight), we need to do more. As I finalise my leadership team early next year, it's my intention to continue to focus on gender diversity.
Alan Joyce, Qantas
How is the world of low returns impacting on your business and your decision making? Are you more or less likely to invest overseas in 2017?
There are good returns to be had if you focus on the right areas - and the beauty of our business is that we have quite a lot of agility when it comes to deploying our assets. Right now there's really strong growth in inbound tourism out of Asia in particular, as well as intra-Asia travel. We also see good growth prospects in data-driven ventures that sit alongside to our core businesses, which is an area we'll be exploring more in 2017. Of course, your return is largely governed by your cost base, which is why we've put a lot of effort into making Qantas more efficient.
Do you consider that China is a more or less an attractive market for your business as its growing middle class comes with questions about the economy's debt build-up and rising political and regulatory risks?
We're upbeat on China; this is a market that's on track to generate one in four visitors to Australia by 2025. That's not to say there won't be challenges for the Chinese economy, but ultimately we don't see the fundamentals behind that travel demand changing. The new open skies agreement, which removes the cap on capacity on flights between Australia and China, is a fantastic opportunity.
While Chinese travel demand is likely to remain strong, the challenge is making sure Australia remains on the 'go to' list for the travellers themselves. It's about making Chinese visitors feel welcome. Two small examples are the fact we're recruiting more cabin crew with Chinese language skills and we've started a Chinese inflight magazine. These are the same gestures that help attract Australian visitors to other countries.
How concerned are you about Australia losing its AAA credit rating? What, in your opinion, are the implications for your business of a cut in the rating?
It's a concern, as much as a signal as in practical terms. It highlights the need for serious action on budget reform, which will mean some hard decisions. But what's the alternative?
Are you worried about the chaos and dysfunction in Canberra? What policy reforms do you think should be prioritised in the interests of the nation in 2017?
There was an outbreak of pragmatism towards the end of the year, which got the wheels moving again. That's a good sign. Hopefully that momentum continues into the new year, and we can have some mature debate on tax reform in particular.
What do business leaders need to do in response to the anti-business sentiment on both sides of politics and in the broader community?
There's a shared responsibility. Business needs to be out there explaining how what we do translates into jobs, investment and growth, and politicians need to avoid the temptation to demonise companies for the sake of a headline. Nobody wins when there's a perception that what's good for business is bad for the community. I also think it's important that big companies have a sense of public service and take a position on broader social issues; that's something that we know younger Australians in particular want to see.
Are you more or less likely to invest in automation this year than last year? If so what type of automation? Also, what are the specific measures you are taking to digitise your business?
We've singled out digital and data as one of the four most important long-term trends for our business, and it's a major focus for 2017. I prefer the term digitisation rather than automation, because in our view it's all about the tools you provide for your people and customers.
The big ticket item is high-speed in-flight wi-fi, which is going to open up a whole range of benefits for our customers, as well as behind the scenes for our operations teams. We've expanded our customer service via social media, we're upgrading our mobile platforms, and we're investing in systems and skills to make sure that we're maximising the data we generate across our business.
How much risk of power interruptions and cost increases do you assess for your business as baseload coal power generation is phased out and the electricity system becomes more reliant on renewables such as wind power?
It's obviously something that needs to be managed with care, but I think it would be a shame if we lost momentum on renewable energy given the resources we have in this country. We should back ourselves to handle the risks, rather than becoming risk-averse.
Do you think the RBA will raise or lower interest rates next year?
I expect they'll bide their time and I doubt there will be too much movement either way. Even if there is an increase, they will likely remain at very low levels historically.
Do you feel positive or negative about a Trump presidency and why?
It's the biggest example we've had yet of this geopolitical uncertainty that's now part of the new normal and that every business has to navigate. It would be a concern if the U.S. stepped back from leadership on issues like trade liberalisation and climate change, not to mention social issues, but time will tell on the policies that the next administration actually puts in place.
What are the challenges, if any, to increasing the percentage of female leadership at your firm? What are the numbers and percentage of women who are direct reports to the CEO at your firm?
The main challenge is to make sure we have the pipeline of female leaders flowing through, particularly in traditionally male dominated areas of engineering and operations. Inherent in that is the issue of unconscious bias. That's why cultural change is so important. It's not enough for the CEO to say they value diversity, you have to create an inclusive culture where people feel confident being themselves and bringing different ideas and perspectives to the table. And you have to make it clear that you're not going to tolerate behaviour that undermines that type of culture. That applies to all forms of diversity, not just gender.
Three of my 11 direct reports are women, including two of the CEOs of our four operating divisions and our group executive for marketing and corporate affairs. We also have an extremely strong group of women in the next executive level down, so that percentage will increase, and on merit.
John Neal, QBE Insurance
How is the world of low returns impacting on your business and your decision making? Are you more or less likely to invest overseas in 2017?
Low interest rates are a challenge for the insurance industry, but election of Trump may eliminate the "lower for longer" theme. 75 per cent of our business is overseas and our commitments to continued investment remain.
Do you consider that China is a more or less an attractive market for your business as its growing middle class comes with questions about the economy's debt buildup and rising political and regulatory risks?
QBE has no direct involvement in China or intention to do so.
How concerned are you about Australia losing its AAA credit rating? What, in your opinion, are the implications for your business of a cut in the rating?
AA or better is more than sufficient from our perspective.
Are you worried about the chaos and dysfunction in Canberra? What policy reforms do you think should be prioritised in the interests of the nation in 2017?
More long-term thinking is required to support future growth and infrastructure investment.
What do business leaders need to do in response to the anti-business sentiment on both sides of politics and in the broader community?
Visibility, openness and transparency is needed in all that we do.
Are you more or less likely to invest in automation this year than last year? If so what type of automation? Also, what are the specific measures you are taking to digitise your business?
Technology is critical to QBE's success. Almost 1/3 of our business costs are technology driven.
How much risk of power interruptions and cost increases do you assess for your business as baseload coal power generation is phased out and the electricity system becomes more reliant on renewables such as wind power?
Nominal risk for our business activities. This is more of a consideration as an insurance risk than business cost.
Do you think the RBA will raise or lower interest rates next year?
Flat or lower
Do you feel positive or negative about a Trump presidency and why?
Positive in the short term (promoting growth and consumption, reduced tax, investing in infrastructure). Medium term more challenging.
What are the challenges, if any, to increasing the percentage of female leadership at your firm? What are the numbers and percentage of women who are direct reports to the CEO at your firm?
Diversity & Inclusion is a continuing priority for us. 30 per cent of direct reports are women.
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Jean-Sebastien Jacques, Rio Tinto
How is the world of low returns impacting on your business and your decision making? Are you more or less likely to invest overseas in 2017?
Our aim at Rio Tinto is to deliver superior shareholder returns at all points of the cycle while making a contribution to economic and social development wherever we operate around the world.
In the era of challenging trading conditions and volatile commodity prices, we are focused on generating cash, and reinforcing capital discipline across the business. We are committed to delivering greater free cash flow of an extra US$5 billion ($6.7 billion) in productivity improvements over five years.
Our balance sheet strength means we are one of the few in the sector able to invest right now. On the investment front, Australia is central to our plans. We have three major growth projects around the world and two of them are in Australia. We are developing the Amrun bauxite project in far north Queensland and the Silvergrass iron ore project in the Pilbara, as well as the Oyu Tolgoi copper-gold project in Mongolia.
There is one primary consideration for us at Rio Tinto – to deliver value in a responsible way. This is what guides our decision making during tough and easy times.
Do you consider that China is a more or less an attractive market for your business as its growing middle class comes with questions about the economy's debt buildup and rising political and regulatory risks?
There is no doubt in my mind that China will remain a key strategic player in the mining sector and Australia's economy for many years to come. Given the pace of industrialisation and urbanisation, China's demand for commodities will continue, albeit at a slower rate.
We look at a number of scenarios when it comes to China but I remain cautiously optimistic. The pace of State Owned Enterprise (SoE) reform is unclear but our order books remain full.Our strong product offering and long-term customer relationships give us a strong position in the Chinese market.
How concerned are you about Australia losing its AAA credit rating? What, in your opinion, are the implications for your business of a cut in the rating?
We are confident the Australian Government will continue to do a good job managing the national economy and put in place the right economic policy settings. The benefit of having an AAA credit rating is that it brings stability and confidence around capital investment decisions in Australia. However, we are more focused on the nation's competitiveness as an investment destination rather than the credit rating per se.
Rio Tinto has been operating in Australia for over 140 years and we continue to invest in this country, with two of our three major growth projects here. However, Australia is now one of the most expensive places for us to do business and it is critical that a climate is created to encourage investment.
Are you worried about the chaos and dysfunction in Canberra? What policy reforms do you think should be prioritised in the interests of the nation in 2017?What is critically important is the need for a stable and globally-competitive policy environment to do business in Australia. Our biggest policy threat is unrelated to Canberra, it is the proposal by the WA Nationals' to add a new layer of iron ore taxation on top of royalties and company tax.
We want to continue to invest in Australia and to do this we need policy stability and a competitive environment.
What do business leaders need to do in response to the anti-business sentiment on both sides of politics and in the broader community?
There is no doubt in the increasingly complex and interconnected world we live in, society's expectation for greater transparency is only going to get higher.
Big business must do the right thing – socially and environmentally – to build trust. Above all, communities and governments will demand that companies are socially responsible and paying their fair share in tax. That is why at Rio Tinto we produce an annual Taxes Paid report, to let everyone know about our tax payments, no matter where we operate in the world.
To put it simply, big business must learn to communicate better about the benefit it brings to nations around the world. This is particularly important for an industry like ours. Mining is vital as we produce the materials used in everyday life – from the aluminium used in your iPhones, to the copper used to provide clean surfaces in hospitals, to the iron ore used to build the buildings we live in. The world needs a thriving business community, strong government and vibrant society – each has a critical role to play.
Are you more or less likely to invest in automation this year than last year? If so what type of automation? Also, what are the specific measures you are taking to digitise your business?
Rio Tinto has been a global leader in the mining industry in new technology and automation, introducing driverless haul trucks, autonomous drills, drones and we are trialling driverless trains in the Pilbara. This technology has made our world-class operations more productive and safe.
We are building a technical excellence centre in Brisbane to support our global operations and this will drive the development of our underground mine in Mongolia. We also have an exciting partnership with the University of Sydney as part of our Mine Automation System (MAS) development program, examining ways to increase mining autonomy and safety.
Automation will be an important part of our business and the mining industry for decades to come, but people will always remain at the forefront of mining. I think Australia has a real chance to position itself as a global centre of mining technology and operational excellence – a lot of very exciting work is happening in this country and we are keen to keep playing our part.
How much risk of power interruptions and cost increases do you assess for your business as baseload coal power generation is phased out and the electricity system becomes more reliant on renewables such as wind power?
Energy security is critically important for Australia's national economy. Businesses need access to an uninterrupted supply of power at an affordable price, and baseload coal generation currently provides the majority of power for businesses and households in Australia.
As Australia plays its part in tackling the global climate challenge, it is important that the focus is on technology neutral, least cost abatement. The transition of the electricity sector to lower emission generation has the potential to impact energy system security and energy costs. The speed and pathway of this transition needs to be carefully managed to take into account the flow-on implications for large electricity consumers and ensure there is no impact on industry competitiveness.
Do you think the RBA will raise or lower interest rates next year?
The continuing volatility of global markets is likely to have a major impact on interest rate decisions, but I won't make a prediction on movements next year.
Do you feel positive or negative about a Trump presidency and why?
We have a strong track record of working with all governments in the countries in which we operate. The permitting process in the US is very slow and if the Trump administration's intention is to cut through red tape there could be some significant benefits for the industry, both in terms of demand in the country and in terms of being able to build some world-class assets. It is early days for the Trump administration and we will continue to focus on building good relationships with all of our partners wherever we operate around the world.
What are the challenges, if any, to increasing the percentage of female leadership at your firm? What are the numbers and percentage of women who are direct reports to the CEO at your firm?
It is clear that business, governments and other institutions must be far more diverse. This is about gender diversity, it is about ethnic diversity and it is about inclusion – fostering an environment where diverse thought not only survives but thrives. Rio Tinto is a global company and for us to be effective our workforce needs to reflect the local communities in which we operate. For this reason, our diversity priorities vary by location but gender is a key focus for us in Australia and elsewhere across the globe. Joanne Farrell, who leads health, safety and environment, is on the Rio Tinto Executive Committee and reports to me. Today, about 18 per cent of our leaders across the group are female and we are building a stronger female talent pool for the future with women making up 43 per cent of our graduates.
Andrew Bassat, SEEK
How is the world of low returns impacting on your business and your decision making? Are you more or less likely to invest overseas in 2017?
The low interest rate environment does not change or impact our investment decision-making. Through the cycles we continue to invest where we see the opportunity to create long-term value and solve real problems for candidates, hirers and students.
We operate within a fast-moving, increasingly competitive marketplace and take a strong view that investment into technology, product and people is required in order to remain competitive on a global scale. If we do invest successfully in the big markets we operate in across ANZ, China, Latin America and South East Asia, we are confident of driving strong returns to shareholders over the medium to long-term.
Do you consider that China is a more or less an attractive market for your business as its growing middle class comes with questions about the economy's debt buildup and rising political and regulatory risks?
Zhaopin, SEEK's online employment marketplace in China is an important business for us. The size of the market, and the favourable structural trends we're exposed to including increasing internet penetration and good GDP growth relative to global levels gives us good reason to continue to invest in this market for long-term growth. We have reinvested heavily in product, technology, marketing and sales to successfully capture greater market-share and deliver strong year on year growth in online revenue and our key operational metrics. We have grown from a distant number two, to number one player in the market and feel confident of our future in China.
How concerned are you about Australia losing its AAA credit rating? What, in your opinion, are the implications for your business of a cut in the rating?
It would not be ideal. Household debt is at relatively high levels and if our banks had to absorb a higher cost of funding which would then be passed on to mortgage holders; this may lead to slow-down in growth. If this were to occur, this may lead to less new job creation which impacts our business.
Are you worried about the chaos and dysfunction in Canberra? What policy reforms do you think should be prioritised in the interests of the nation in 2017?
In general I worry about short-termism in politics and business. I would also like to see the innovation agenda expanded to incentivising companies to invest more in R&D; and innovation including increased collaboration across government and universities. And I would in general like to see government become more of an ally to business in the challenge we all face to be winners not losers in an era of global competition.
What do business leaders need to do in response to the anti-business sentiment on both sides of politics and in the broader community?
Business can do more to collaborate with government and demonstrate the value we are adding to the economy in regards to jobs creation, innovation and disruption. We have some great success stories - I would hope this could create some room for business leaders to take more risks and investments for the long-term.
Are you more or less likely to invest in automation this year than last year? If so what type of automation? Also, what are the specific measures you are taking to digitise your business?
We will continue to invest aggressively in product and technology; we have over 250 employees in Australia within these teams. We have made some significant headway with using Artificial Intelligence to deliver highly relevant job recommendations to candidates, which has resulted in more than 2 million quality job applications that otherwise wouldn't have happened. AI, and other technologies that unlock the value within the breadth and depth of our data will be a key focus for us.
How much risk of power interruptions and cost increases do you assess for your business as baseload coal power generation is phased out and the electricity system becomes more reliant on renewables such as wind power?
N/a
Do you think the RBA will raise or lower interest rates next year?
We are not experts here but are comfortable with SEEK's position in either scenario.
Do you feel positive or negative about a Trump presidency and why?
I am optimistic that the USA will continue to be a world leader in business and politics. I hope President-elect Trump will adopt an inclusive stance. From an economic perspective, I hope he will adopt a pro-business stance which will help contribute to global growth and economic stability.
What are the challenges, if any, to increasing the percentage of female leadership at your firm? What are the numbers and percentage of women who are direct reports to the CEO at your firm?
We currently have 25 per cent of females at senior management level. We are working hard to ensure strong diversity throughout the organisation including at senior levels.
Ryan Stokes, Seven Group Holdings
How is the world of low returns impacting on your business and your decision making? Are you more or less likely to invest overseas in 2017?
Our businesses are focusing on their cost base and providing customer-driven solutions to capture available opportunities. We continually assess potential investments both locally and abroad and have adjusted our view of the cost of capital to reflect prevailing factors.
Do you consider that China is a more or less an attractive market for your business as its growing middle class comes with questions about the economy's debt buildup and rising political and regulatory risks?
We have successfully operated in China for more than 20 years. Through that time the economic and business environment has changed considerably. The current changes to the Chinese economy are creating new opportunities for Australian businesses in areas exposed to the growing Chinese consumer including areas such as media and content development, and China also remains an attractive market for Australian commodity exports. There is confidence in the Chinese government's ability to manage its economy through fiscal and monetary policy and other reform measures. Growing requirements for services could also present interesting opportunities for Australian businesses to export expertise around health and aged care.
How concerned are you about Australia losing its AAA credit rating? What, in your opinion, are the implications for your business of a cut in the rating?
Australia will remain an attractive market for lenders regardless of whether it loses its AAA sovereign credit rating. Our banks are safe with a strong regulatory environment and corporate credit strength remains strong. Furthermore, the strength and quality of assets underpinning so many Australian businesses ensure that Australian corporates can raise long term debt effectively in global debt markets. In fact, it is more of a lost opportunity that we have not been able to develop a deeper domestic debt market to capture this opportunity rather than corporates funding via the USPP and Euro market given their attractive duration.
Are you worried about the chaos and dysfunction in Canberra? What policy reforms do you think should be prioritised in the interests of the nation in 2017?
The ability of the current government to pass legislation is a concern. The government should focus on initiatives that encourage investment, create new growth opportunities, employment and help the economy transition from the resource investment boom.
What do business leaders need to do in response to the anti-business sentiment on both sides of politics and in the broader community?
There isn't an anti-business sentiment in general. We are seeing a few sectors under additional pressures to ensure they are delivering fair outcomes to their customers and consumers. Businesses are ultimately run to benefit their shareholders while also providing employment and contributing to national income. One issue we are seeing is the creeping culture of over regulation in sectors as a primary response to an issue. Political leaders and regulatory bodies need to be supportive encouraging investment and providing an encouraging regulatory environment that is efficient and predictable.
Are you more or less likely to invest in automation this year than last year? If so what type of automation? Also, what are the specific measures you are taking to digitise your business?
Data and technology are increasingly important in our businesses to better serve our customers. Data interrogation is helping us build deeper customer relationships and extending the useful life of mining assets. Autonomous mining technology is helping customers improve safety and ensuring they remain at the forefront of the cost curve. We have been a leader in this and will continue to invest more.
How much risk of power interruptions and cost increases do you assess for your business as baseload coal power generation is phased out and the electricity system becomes more reliant on renewables such as wind power?
We hope for sensibility with government energy policies that don't create issues for business and consumers through chasing principals, this risk is particularly evident at a state level. We can't remove base load power production without an implication. We also see the east coast gas market starting to present challenges for all users as demand and supply imbalances are likely to push prices up.
Do you think the RBA will raise or lower interest rates next year?
Rates are likely to remain on a steady course for the foreseeable future. If labour market conditions deteriorate then the RBA could undertake further monetary stimulus but this would be at this risk of over-heating the housing market.
Do you feel positive or negative about a Trump presidency and why?
A positive sign is that market volatility has now settled post the election. Fiscal stimulus through new infrastructure spending could be positive for the US economy. It is also clear that monetary policy alone has not provided sufficient support to economies across the globe in recent times.
What are the challenges, if any, to increasing the percentage of female leadership at your firm? What are the numbers and percentage of women who are direct reports to the CEO at your firm?
The challenge is the available pool of suitably qualified candidates for our businesses particularly in industrial services where experience in the field is critical. Two direct reports or 22 per cent.
Tim Worner, Seven West Media
How is the world of low returns impacting on your business and your decision making? Are you more or less likely to invest overseas in 2017?
We continue to transform our company. We have an approach in here called "win smarter". Everything we do, or plan to do, is put through a rigorous analysis and that extends to our offshore activities as well. We continue to see significant opportunities in international markets for our content and our ideas and we have been able to grow that part of the television business steadily over the last few years. We intend to build on our production joint ventures in the United Kingdom and the US and we are already producing My Kitchen Rules in both those big markets. New ways of consuming are changing our business model and changing how we think and we see significant opportunities in all this disruption for our content here and in international markets.
Do you consider that China is a more or less an attractive market for your business as its growing middle class comes with questions about the economy's debt buildup and rising political and regulatory risks?
No answer
How concerned are you about Australia losing its AAA credit rating? What, in your opinion, are the implications for your business of a cut in the rating?
No answer
Are you worried about the chaos and dysfunction in Canberra? What policy reforms do you think should be prioritised in the interests of the nation in 2017?
I don't agree that there is chaos and dysfunction. There does seem to be a global trend towards voters thumbing their noses at political elites and established parties. Perhaps the message for all of us is we have not been as good as we need to be at listening to the audience.
In Australia this trend has been seen in greater support for independent candidates and a larger number of cross bench Senators. But in the last few weeks the government has shown that it has been able to adjust to this political reality and to negotiate and compromise to secure the passage of key legislation.
As far as policy reforms to be prioritised in 2017, for us the clear priority is to address outdated television licence fees so that we can effectively compete with non-tax paying foreign multinationals. In the UK the government identified the creative industries as a potential economic powerhouse some years ago and went about putting in place the policy settings to enhance the performance of the sector, including dropping television licence fees to almost zero.
Official UK government figures last month highlighted television and film production as one of the best performing sectors of the UK economy and helping to maintain growth in a time of post-Brexit vote uncertainty. We need to be looking to do the same here. We have the talent and the will in this country to become a film and television production powerhouse. This is a huge opportunity and hopefully it will be recognised and realised.
What do business leaders need to do in response to the anti-business sentiment on both sides of politics and in the broader community?
We need to get better at telling our own stories. Whether it be banks, television networks or whatever, we can do a lot better and we have the tools to do so. Very simply, as we as an industry are doing with the launch of ThinkTV, we need to communicate more effectively and energetically.
Broadly there needs to be a greater understanding in the community of our businesses and our respective industries and the role every business plays in the economy and life of Australia. Really sharp, emotional marketing is key and television is an unrivalled medium to tell those stories.
Are you more or less likely to invest in automation this year than last year? If so what type of automation? Also, what are the specific measures you are taking to digitise your business?
We don't see digital as a separate part of our business. We don't have a "digital department". We are a content company and we deliver content to huge audiences across every screen.
The Rio Olympics is a great example of how quickly this has changed. The last time we had the Olympics, we telecast it on one channel only. This time there were over 40 separate streams. That is the model for us now.
We are also investing in and developing automation and that is aimed at two key outcomes: delivering efficiencies and also allowing us to do undertake business with our clients more efficiently. It is all about reducing any friction between us and our customers, making that transaction process as smooth as possible. In the first quarter of 2017 we are introducing an automated sales platform that will be a huge step in that direction. And, we are continuing the rollout of studio automation across our news and public affairs programmes. We are adopting international best practice.
How much risk of power interruptions and cost increases do you assess for your business as baseload coal power generation is phased out and the electricity system becomes more reliant on renewables such as wind power?
No answer
Do you think the RBA will raise or lower interest rates next year?
I'm not into making predictions. There are highly paid economic forecasters for that. Any changes impact all of us. For us, we are concerned about consumer sentiment and demand. That sentiment plays a key role in defining ad spends across all media platforms.
Do you feel positive or negative about a Trump presidency and why?
Well purely from an entertainment perspective, I certainly feel positive about a Trump presidency as a media company. I do not think it is going to boring and has potential for great television.
Outside of the theatrics of a "reality television" programme in real-time, we wish the President-elect the best as he addresses a number of primary issues including the US economy. Those policy decisions and which lever he pulls will have a more lasting impact than the daily circus we currently see before he is sworn in as the next President of the United States.
What are the challenges, if any, to increasing the percentage of female leadership at your firm? What are the numbers and percentage of women who are direct reports to the CEO at your firm?
We constantly test ourselves on ensuring stronger leadership and finding and developing our leaders. As a media company, we reach out and reflect the lives of all Australians. That commitment extends to our company and how we manage the composition of our teams and our people generally. It is an ongoing process. On a pure statistical level, we currently employ 52 per cent female across our business. At the Group Executive level, reporting to the CEO, we have 25 per cent female, in senior management 33 per cent female and in other management 42 per cent female.
Mark Steinert, Stockland
How is the world of low returns impacting on your business and your decision making? Are you more or less likely to invest overseas in 2017?
Low interest rates globally have resulted in a lot of capital chasing yield. Whilst low rates have driven up prices for commercial real estate, we're fortunate in that we have a significant internally generated development pipeline, so we can continue to grow organically. We're targeting growth in FFO per security of 5 to 7 per cent in 2016-17 and we're currently trading on a distribution yield of around 6 per cent, assuming no material change in market conditions.
We're Australia's largest diversified real estate group and we will maintain our exclusive focus on the domestic market. We'll continue our disciplined approach to growing asset returns and our customer base, improving our capital strength and delivering operational excellence.
Do you consider that China is a more or less an attractive market for your business as its growing middle class comes with questions about the economy's debt buildup and rising political and regulatory risks?
There's no doubt that the rising Chinese middle class is presenting unprecedented opportunities across the Australian economy, not only in property, but across education, healthcare, tourism, retail and entertainment. We currently sell less than 3 per cent of our new residential property to overseas buyers, but rising political and regulatory risks within China are incentivising more Chinese nationals to seek safe investment havens in stable economies such as Australia.
How concerned are you about Australia losing its AAA credit rating? What, in your opinion, are the implications for your business of a cut in the rating?
Budget repair will be required for Australia to maintain its AAA credit rating. If Australia loses its AAA rating, it will impose a higher cost of wholesale funding, which will, of course, cause a ripple effect for the cost of borrowing throughout the economy. Stockland maintains a strong balance sheet and A-/stable credit rating, with gearing below the midpoint of our 20 to 30 per cent target range. The active debt management program that we've implemented in recent years has lowered our cost of debt and increased our weighted average debt maturity to 5.9 years, providing us with a reasonable buffer against any short to medium term movements in the cost of debt.
Are you worried about the chaos and dysfunction in Canberra? What policy reforms do you think should be prioritised in the interests of the nation in 2017?
We are pleased to see a national conversation about housing affordability, liveable cities and connected, healthy communities. We believe that the Federal Government can work successfully with the various state and local governments around the country to drive improvements in this area as illustrated by the SMART Cities policy which is driving productivity-enhancing infrastructure.
The City Deals model is an extremely important initiative that emulates world's best practice, and we are working with all levels of government to ensure this model helps create smart, healthy and connected communities across the country. The jobs growth in NSW is testament to the tremendous benefits that can accrue to communities when all levels of government work collaboratively and with decisive vision.
What do business leaders need to do in response to the anti-business sentiment on both sides of politics and in the broader community?
We see strong support and engagement from all levels of government in making our cities more efficient and liveable, amidst increasing urbanisation and continued population growth.
To strengthen trust in the broader community, we need to be accountable to customers and the community, as well as shareholders. Our business is about community creation, so we are very focused on ensuring the long-term liveability of our properties and communities, working together with governments and utilities to deliver the right infrastructure, services and access to employment to meet community expectations.
This is enhanced by using our scale to deliver broad community benefits including award winning playgrounds, great town centres, childcare, schools, open space, playing fields, walking and running trails, affordable housing - from first home ownership to retirement - and sustainability initiatives, which reduce household bills. A great example is our strategic partnership with Touched by Olivier, which specialises in designing playgrounds for children of all abilities.
Are you more or less likely to invest in automation this year than last year? If so what type of automation? Also, what are the specific measures you are taking to digitise your business?
New technology and digital automation present the greatest challenges and opportunities for our business, so we're absolutely embracing innovation and change at every touch point. We're investing in a dramatic transformation of our back end systems, with SAP, and we've rebuilt and streamlined our customer service systems, with Salesforce. Everything we do is geared towards improving our customers' experiences when they interact with Stockland, visit or live within the communities we create.
We are also excited about our co-investment with CBA in a social humanoid robot called 'Chip', which can be programmed to speak multiple languages, has facial recognition capabilities. Our involvement in this pilot is helping us to understand the possible practical applications of technology, with much longer term thinking about what the future may hold for our customers. We hope that in the future Chip may help find lost children in our shopping centres, assist elderly or disabled customers to carry their groceries, or provide assistance to residents within our retirement living communities.
How much risk of power interruptions and cost increases do you assess for your business as baseload coal power generation is phased out and the electricity system becomes more reliant on renewables such as wind power?
Stockland is proud to be recognised by multiple international agencies, including the Dow Jones Sustainability Index, as the global real estate leader in sustainability. We have led the industry in incorporating solar power generation in our retail portfolio, while at the same time designing and implementing electric vehicle recharge stations in many of our shopping centres. We are also incorporating more energy-efficient, sustainable design and construction into our residential and retirement living communities.
Do you think the RBA will raise or lower interest rates next year?
We see a relatively benign interest rate environment over the next 12 months, with interest rates maintained at or near current record low levels. It is worth highlighting what a great job the RBA has done in managing monetary policy to deliver a more competitive Australian dollar which has driven jobs growth right across the economy.
Do you feel positive or negative about a Trump presidency and why?
President-elect Trump has struck a chord with an increasingly disenfranchised middle class in America, but his mooted return to more protectionist policies is concerning. It remains to be seen how many of the campaign promises are delivered in government, but his plans to rebuild America's key infrastructure should have long term benefits for growth.
What are the challenges, if any, to increasing the percentage of female leadership at your firm? What are the numbers and percentage of women who are direct reports to the CEO at your firm?
We, as an industry, need to encourage more bright, enthusiastic people with diverse backgrounds - the next generation of up-and-coming real estate professionals - to choose to pursue a career in property.
Michael Cameron, Suncorp
How is the world of low returns impacting on your business and your decision making? Are you more or less likely to invest overseas in 2017?
Within Suncorp's investment portfolio, we are careful to strike the right risk-return balance. We will continue our focus on the diversification benefits of our portfolio which include investing internationally.
Do you consider that China is a more or less an attractive market for your business as its growing middle class comes with questions about the economy's debt buildup and rising political and regulatory risks?
Suncorp's core markets are Australia and New Zealand.
How concerned are you about Australia losing its AAA credit rating? What, in your opinion, are the implications for your business of a cut in the rating?
There is considerable risk to Australia's AAA credit rating. While lower unemployment and rising commodity prices are benefiting the Budget balance, soft wage and profit growth are offsets. Meanwhile, the current political environment is not conducive to Budget repair.
The consequences of a potential downgrade are uncertain and depend on both market and regulatory responses. For Suncorp, the impacts may include higher capital requirements, wider credit spreads in the Group's bond portfolios and an increased cost of funds.
Are you worried about the chaos and dysfunction in Canberra? What policy reforms do you think should be prioritised in the interests of the nation in 2017?
The global political environment continues to face challenges and Australia is certainly not immune from these. Closer to home, there is a long list of important reforms waiting to be implemented as the result of a raft of independent reviews, including recommendations from the Financial System Inquiry. We would like to see priority given to these, as well as a focus on tax reform to drive economic growth and promote investment.
In particular, Suncorp would encourage Parliament to prioritise revenue and expenditure measures to avoid a downgrade of the country's AAA credit rating.
What do business leaders need to do in response to the anti-business sentiment on both sides of politics and in the broader community?
In February 2016, Suncorp evolved its strategy and realigned its operating model to refocus the business on creating value for our customers, rather than extracting value from them. This is an important distinction and forms the centrepiece of Suncorp's marketplace strategy.
Suncorp takes the trust customers place in us seriously and we will continue to work with industry and regulators to drive positive change and update codes of practice while adhering to our own robust governance framework.
We have a long and proud history of delivering quality customer outcomes and will continue to build a culture where doing the right thing underpins our social licence to operate.
Community expectation is to deliver products and services of the type and quality that meet our customers' needs, and in the process, improve shareholder returns. We need to declutter and simplify our communication so that customers are empowered to make good decisions and we are doing this.
Are you more or less likely to invest in automation this year than last year? If so what type of automation? Also, what are the specific measures you are taking to digitise your business?
Digital disruption is giving rise to a number of trends globally. The use of smart sensor-based technologies, connected devices and robotics are becoming more widespread. Like most companies, Suncorp will continue to invest in this area, driven by our goal to provide a better experience for our customers across a range of areas. This includes increasing driver safety through the use of telematics and accident avoidance systems.
Suncorp has invested in consolidating its back-end systems. This has provided us with a solid platform to continue to digitise our front-end systems to create a better, faster experience for our customers. It is this investment that will enable the delivery of Suncorp's marketplace strategy.
How much risk of power interruptions and cost increases do you assess for your business as baseload coal power generation is phased out and the electricity system becomes more reliant on renewables such as wind power?
The cost of electricity is not a material issue for Suncorp. However, we do assess the risk that climate change poses to our business through our corporate risk management framework, and seek to monitor and control those risks throughout our business. Suncorp's own electricity consumption and greenhouse gas emissions have decreased every year for the past five years.
Do you think the RBA will raise or lower interest rates next year?
Neither. With the latest CPI report showing inflation having lifted slightly, and with RBA commentary indicating a degree of comfort with current monetary policy settings, we believe it's difficult to construct a compelling case for lower interest rates. Equally, however, we expect a rate increase to be at least 12 months away – as the RBA waits for clear signs that inflation is above the mid-point of its 2 to 3 per cent target range.
Do you feel positive or negative about a Trump presidency and why?
After a very brief period of risk aversion, the markets have adopted a 'benefit of the doubt' stance in relation to President-elect Trump. Certainly, policies to reinvigorate US growth are welcomed. However, it's in the area of international policy where we see considerable uncertainty, including a potential shift towards protectionism. For Australia, China's economy is critical and policies which negatively impact China's outlook would be worrying.
What are the challenges, if any, to increasing the percentage of female leadership at your firm? What are the numbers and percentage of women who are direct reports to the CEO at your firm?
Suncorp continues to make great progress in senior leadership gender diversity. Currently 40 per cent (four out of 10) of the CEO's direct reports are female. At the end of October 2016, females held 40.8 per cent of the senior leader roles at Suncorp. This slightly exceeds our 30 June 2017 target of 40 per cent. Suncorp supports a diverse and inclusive workforce including gender diversity and is working towards creating an inclusive environment where all employees can realise their potential. Our diversity and inclusion programs work towards addressing any potential barriers. Initiatives include:
- Ensuring that female talent are considered for roles through requiring at least one female and one male candidate on the short list for all senior leadership role
- Building support for upcoming female talent through sponsorship and mentoring programs; increasing visibility of female role models; and unconscious bias training for leaders
- Building career resilience among high potential women to encourage them to actively manage their careers and seek out leadership and promotional opportunities
- Increasing workplace flexibility so we can offer working arrangements that appeal to a more diverse pool of employees and potential employees.
Kerrie Mather, Sydney Airport Corporation
How is the world of low returns impacting on your business and your decision making? Are you more or less likely to invest overseas in 2017?
The macroeconomic environment remains supportive for our industry. Airline business models and partnerships are changing to create new service offerings, and next generation aircraft technology is improving the economics of aviation.
So, airfares have become even more affordable, making it easier for more people to travel and more often. Our passenger numbers have continued to grow in 2016, driven by additional seat capacity and new routes.Sydney Airport is investing in capacity and operational efficiency and creating a step change in customer experience, and we'll continue to do so in 2017 as part of our long term strategy. With more than 200 active projects underway, we're investing across the entire airport as we continue to support the Sydney and NSW economy as Australia's gateway.Sydney Airport has no intention to invest overseas.
Do you consider that China is a more or less an attractive market for your business as its growing middle class comes with questions about the economy's debt buildup and rising political and regulatory risks?
We've seen strong growth from China in 2016 and expect this to continue in 2017 with seven airlines serving 14 mainland Chinese cities from January. Australia's recent announcement of its historic agreement with China to allow unlimited flights between our countries, in time for Australia-China Year of Tourism next year, will further enhance this growth. Chinese passengers are now our largest group of foreign inbound passengers to Australia so we're seeing strong demand for these services, and have implemented a China ready strategy at our terminals to support this growing demand.We've worked closely with our Chinese airlines and tourism partners to support this growth, and position Sydney as an ideal destination.
How concerned are you about Australia losing its AAA credit rating? What, in your opinion, are the implications for your business of a cut in the rating?
Certainty and stability is essential for business confidence. Having said that, our capital structure offsets potential risks associated with external factors. Assuming a downgrade did not affect interest rates, we wouldn't expect any material impact to our borrowing costs or demand for corporate bonds.
Are you worried about the chaos and dysfunction in Canberra? What policy reforms do you think should be prioritised in the interests of the nation in 2017?
Domestic and international markets value political stability. Sydney Airport is one of the nation's largest infrastructure assets generating 9 per cent of NSW employment and contributing $31 billion to the national economy. It's critical that policy settings support growth from key infrastructure assets like Sydney Airport, to maximise productivity, jobs and economic growth. Improving the transport network and access to the airport is also vital to support that growth.
What do business leaders need to do in response to the anti-business sentiment on both sides of politics and in the broader community?
Our stakeholders expect real conversations and genuine engagement. As a business, we need to be transparent about what we stand for and open to working together with our stakeholders to achieve results. This is particularly important in an airport environment, where we have 29,000 people working across 800 businesses. Collaboration is key to our success, and so we must be willing to work alongside our stakeholders to achieve outcomes that benefit us all.
Are you more or less likely to invest in automation this year than last year? If so what type of automation? Also, what are the specific measures you are taking to digitise your business?
Technology is absolutely essential to our future and we're implementing a range of digital solutions across our operations. We're sharing data with our key stakeholders, so we can work together to make better decisions faster, in real time. This is improving collaboration, driving operational efficiencies and delivering better customer service and experiences.Our new Integrated Operations Centre (IOC) commenced operations in November. It's bringing together our landside, terminal and airside operations teams, along with our key stakeholders, in one location. Here, we're able to share data in real time, identify potential issues before they arise and respond to changing circumstances quickly and efficiently. The IOC is connecting every aspect of our airport, and in 2017 we expect to start seeing the benefits of this innovation and collaboration.
We're also using technology to improve the customer experience, with passengers able to access FIDs in one of 13 languages, see live information on queue wait times at security screening and pass through border processing is less time using SmartGates.
We'll continue to implement new technology across our operations in 2017, with a focus on providing more opportunities for real-time collaboration, and a more responsive approach to the needs of our passengers, staff and visitors.
How much risk of power interruptions and cost increases do you assess for your business as baseload coal power generation is phased out and the electricity system becomes more reliant on renewables such as wind power?
Stability of power supply is critical to our operations, and Sydney Airport has its own back-up power supplies to ensure continuity of operations at all times. We are also exploring the feasibility of on-site renewable energy.
Do you think the RBA will raise or lower interest rates next year?
We are in a historically low interest rate environment, and will wait to see what decisions the RBA takes in 2017. We are very highly hedged in the short term, and about 70 per cent hedged over the next five years, so we wouldn't expect any material impact on our business should interest rates increase.
Do you feel positive or negative about a Trump presidency and why?
Both Donald Trump and Hillary Clinton made a range of commitments during their long drawn out election campaign and I'm watching with interest, as we all are, which commitments will actually translate into policy and legislation.
What are the challenges, if any, to increasing the percentage of female leadership at your firm? What are the numbers and percentage of women who are direct reports to the CEO at your firm?
At Sydney Airport, we're seeing the benefits of a focus on diversity every day. Right now, 40 per cent of our executive team are women, and 36 per cent of all staff are female. In addition, 29 per cent of our board positions are held by women. This is helping us build a strong and diverse culture across the business, and is giving us the chance to benefit from different perspectives, experiences and points of view.
David Attenborough, Tabcorp
How is the world of low returns impacting on your business and your decision making? Are you more or less likely to invest overseas in 2017?
Our investment decisions have centred around creating the best possible experience for our customers through best-in-class product and technology.
Our focus in 2017 is progressing the combination of Tabcorp and Tatts, which will create a world-class, diversified gambling entertainment group. The combined group will be better placed to invest and compete in the global marketplace.
Do you consider that China is a more or less an attractive market for your business as its growing middle class comes with questions about the economy's debt buildup and rising political and regulatory risks?
China is largely a closed market in the gambling sector. We have close links with Hong Kong and other Asian racing industries through the merging of our betting pools and the reciprocation of racing vision.
How concerned are you about Australia losing its AAA credit rating? What, in your opinion, are the implications for your business of a cut in the rating?
We are a business that relies on consumer discretionary spending, so we are mindful of any increase in borrowing or other costs that are ultimately passed on to the customer. We are encouraged by the Government's commitment to budget improvements and preserving our AAA credit rating.
Are you worried about the chaos and dysfunction in Canberra? What policy reforms do you think should be prioritised in the interests of the nation in 2017?
It's somewhat unfair to characterise the entire federal political system in such a way, despite good decision-making occasionally being compromised.
In our own industry, we have seen important reforms introduced into the Parliament to strengthen the online regulatory environment for gambling. The government is also taking steps to develop a national consumer protection framework for online wagering, which is long overdue and seeks to address disparities between states and territories. We understand these reforms will have bi-partisan support. This demonstrates that on many matters of national importance, there is a will across parties to get things done.
Cost of living continues to be an issue of concern to many, characterised by housing affordability and increasing prices for essential services. Budget repair needs to be a continuing priority, notwithstanding the recent bipartisan budget savings measures passed by the Parliament.
What do business leaders need to do in response to the anti-business sentiment on both sides of politics and in the broader community?
I don't necessarily agree that both sides of politics are anti-business. However, I think the business community needs to continue to focus on explaining how fundamental it is to society – as an employer and producer of goods and services.
That said, there are structural issues in our economy that need to be addressed, and will require strong leadership to do so. Business should take an active part in leading this conversation around some of these, such as a competitive business tax regime.
Are you more or less likely to invest in automation this year than last year? If so what type of automation? Also, what are the specific measures you are taking to digitise your business?
We have been investing in automation for some time and intend to increase our investment in 2017. We are investing in test automation, risk management automation and process automation. In terms of digitising the business, we have been at the forefront of giving consumers a seamless digital offer in wagering. Despite our large retail network in NSW, Victoria and the ACT, digital betting now makes up more than 30 per cent of our total wagering turnover. We do have more to do when it comes to automating our internal paper and manual processes.
How much risk of power interruptions and cost increases do you assess for your business as baseload coal power generation is phased out and the electricity system becomes more reliant on renewables such as wind power?
Like all businesses and households, the security of our power supply is of critical importance. That said, Tabcorp is a relatively low energy consumer and low carbon emitter.
Do you think the RBA will raise or lower interest rates next year?
The mixed views from economists and commentators illustrates that this is tough to answer with any certainty. What is certain, however, is that we are likely to live in a world of low interest rates for some time.
Do you feel positive or negative about a Trump presidency and why?
What is most critical is that the election has concluded and we now have a greater degree of certainty. I share the concerns of others around the President-elect's approach to free trade, but I remain hopeful these views will be tempered in office.
What are the challenges, if any, to increasing the percentage of female leadership at your firm? What are the numbers and percentage of women who are direct reports to the CEO at your firm?
Four of my 10 direct reports are female. Across the extended senior management group, 39 per cent of roles are held by women. We have been on a journey for some time to create a more diverse and high performing workforce. We have focused on diversity education programs for our leaders, which spell out the benefits of a more balanced and inclusive team. We have backed up our diversity agenda through the creation of a Diversity Council, a Senior Women's Forum, targeted acquisition of diverse leadership talent and a 12-week Women's Mentoring Program. We're pleased to be recognised by the Workplace Gender Equality Agency as an Employer of Choice for Gender Equality.
Andrew Penn, Telstra
How is the world of low returns impacting on your business and your decision making? Are you more or less likely to invest overseas in 2017?
Our global enterprise business is one of the fastest growing parts of our business and we remain committed to continuing to grow internationally. We operate around 30 per cent of the total active submarine cable capacity in Asia and also have interests in significant data centre assets.
We recently announced a refinement to our strategy to focus on growth opportunities from our core and businesses adjacent to our core, as well as an up to $3 billion increase to our capital expenditure over the next three years. Our overseas investment plans in the coming years will be focussed on pursuing international growth and expansion through our Global Enterprise Services businesses and continuing to build out and consolidate our submarine cable network in the Asia Pacific region.
Do you consider that China is a more or less an attractive market for your business as its growing middle class comes with questions about the economy's debt buildup and rising political and regulatory risks?
China is a market with its own challenges and risks but, like many parts of Asia, is still a great opportunity. This year we saw some of the value that can be created in China when we sold down our shareholding in Autohome for an accounting gain of $1.8 billion.
The opportunity with Asia of course is the scale and rapid rate of growth - current projections show the Asian middle class doubling by 2030 to more than 1.2 billion households, including 330 million new middle class households in China. That huge growth brings with it a surge in demand for technology and telecommunications and already today almost half of all internet users in the world are in the Asia Pacific region.
For Telstra, with our expertise and infrastructure across the region, that creates all sorts of opportunities. One important part of this is through our PBS joint venture in China – we acquired an interest in PBS through our acquisition of Pacnet. PBS provides IPVPN and other services in China to enterprise and other customers.
How concerned are you about Australia losing its AAA credit rating? What, in your opinion, are the implications for your business of a cut in the rating?
The conventional wisdom is that a cut to Australia's credit rating would lift the risk premium on government debt, raise borrowing costs, and compound budgetary pressures. All of that depends on factors that are difficult to predict with any certainty, but safe to say economic conditions are something we plan carefully for.
Are you worried about the chaos and dysfunction in Canberra? What policy reforms do you think should be prioritised in the interests of the nation in 2017?
Government has always been a complicated business but the way we compete as a nation depends on a platform of ongoing budget repair, getting our regulatory settings right and encouraging business investment. These are the things that can make a real long term difference for our economy and future.
What do business leaders need to do in response to the anti-business sentiment on both sides of politics and in the broader community?
We need to get better at helping the community understand the contribution we make as businesses to society. And not just through providing employment and paying tax, but also in improving our standards of living through infrastructure investments and the development of new products and services that improve people's lives in the long term. This is hard within a short term populist environment but it is important that as a nation we have a constructive discussion around the long terms reforms we need to succeed in the future.
Are you more or less likely to invest in automation this year than last year? If so what type of automation? Also, what are the specific measures you are taking to digitise your business?
Digitisation is a major focus area for us. We recently committed up to an extra $3 billion capex over three years, approximately $1 billion of which will go to accelerating the digitisation of our business.
We are doing this because our customers are expecting an increasingly digitised experience with us and they want it to be simple and intuitive. Our goal is a common architecture for our systems providing one view of our customers and how we serve them, and how we can best meet their expectations.
Our key measures for the Digitisation program are the proportion of: applications retired, contained or moved to cloud; IT delivery capability applying Agile/DevOps capabilities; and, straight through processing of consumer nbn orders.
How much risk of power interruptions and cost increases do you assess for your business as baseload coal power generation is phased out and the electricity system becomes more reliant on renewables such as wind power?
Our networks needs power to operate so continuity of supply is something we carefully manage, monitor and review. We have back-up systems and procedures in place to handle interruptions, including generators, batteries and solar systems, which are particularly relevant in remote and regional areas. Electricity generation, transmission costs and environmental charges are things we track and manage as part of running the business.
Do you think the RBA will raise or lower interest rates next year?
I will leave interest rate predictions to others but I think business would welcome stability in the near term given the current outlook for Australian growth and inflation expectations.
Do you feel positive or negative about a Trump presidency and why?
No answer
What are the challenges, if any, to increasing the percentage of female leadership at your firm? What are the numbers and percentage of women who are direct reports to the CEO at your firm?
We continue to develop and roll out initiatives to help build gender equality. Our approach is that we need to be persistent and determined to keep trying new things at a high tempo because if we keep doing the same things we will get the same results.
The recent announcement of Robyn Denholm as our new COO means 45 per centof my direct reports will be women. Creating the change we want to see will be about bold ideas, action and being relentless in the search for better solutions. The one thing we cannot do is get comfortable. If you ever feel comfortable with the work you are doing on gender or cultural diversity you should start to worry, because you are not trying hard enough.
John Borghetti, Virgin Australia
How is the world of low returns impacting on your business and your decision making? Are you more or less likely to invest overseas in 2017?
Trading conditions remain challenging, so we are investing to build further resilience in our business. We are driving efficiency and productivity across every part of our business to achieve ongoing cost reductions. The group is also actively managing airline capacity growth to ensure that it is in line with demand. We will invest wherever we see the potential for sustainable revenue growth, and that includes international opportunities, particularly in the Asian and North American travel markets.
Do you consider that China is a more or less an attractive market for your business as its growing middle class comes with questions about the economy's debt buildup and rising political and regulatory risks?
China is Australia's most valuable inbound travel market and the number of people in China travelling to Australia is growing rapidly each year. There is tremendous potential here for the Virgin Australia Group. We are maximising this potential by working on a strategic alliance with HNA, a key player in the Chinese travel market, to promote travel between Australia and China. There are risks associated with any major strategic investment, but those can and must be managed in order to achieve sustainable growth.
How concerned are you about Australia losing its AAA credit rating? What, in your opinion, are the implications for your business of a cut in the rating?
No answer
Are you worried about the chaos and dysfunction in Canberra? What policy reforms do you think should be prioritised in the interests of the nation in 2017?
Strong, cohesive leadership is important to take a nation forward. I believe some of the priorities of our leaders in government in 2017 should include:• Supporting businesses, large and in particular small businesses, in creating opportunities for further economic growth, particularly in the "super-growth" tourism sector.• Working with other levels of government and business to deliver transport infrastructure that is cost-effective and well-suited to Australia's future needs.
What do business leaders need to do in response to the anti-business sentiment on both sides of politics and in the broader community?
Businesses need to be thinking about the long term as well as understanding what their customers and stakeholders want. This includes expectations of high standards of behaviour and a positive impact on our communities.
Are you more or less likely to invest in automation this year than last year? If so what type of automation? Also, what are the specific measures you are taking to digitise your business?
Investment in automation will play a key role in enhancing the customer experience. Striking the right balance between the convenience of automation and personal engagement between our people and our guests is essential to the Virgin Australia Group experience. For example, at our new terminal at Perth Airport, we use hybrid technology that automates processes such as bag drop but provides ample opportunity for our team to assist guests where necessary.
How much risk of power interruptions and cost increases do you assess for your business as baseload coal power generation is phased out and the electricity system becomes more reliant on renewables such as wind power?
No answer
Do you think the RBA will raise or lower interest rates next year?
I am not going to speculate but of course would like to see continued improvement in trading conditions and business and consumer confidence in 2017.
Do you feel positive or negative about a Trump presidency and why?
Firstly, we need more time to properly understand the potential impact of a Trump presidency, and other major events including Brexit, on the global economy. But what is clear is that in both situations there were very strong messages from voters and it's important that people learn from that.
What are the challenges, if any, to increasing the percentage of female leadership at your firm? What are the numbers and percentage of women who are direct reports to the CEO at your firm?
We have a culture that supports diversity and inclusion at all levels of the business. Education and awareness is key to this, and leaders have an important role to play here. We also provide appropriate support for team members with caring responsibilities, so they can continue their career progression into leadership roles. Four out of the nine (around 45 per cent of) Executive Committee members that report directly to me are women, and women make up 50 per cent of our overall workforce.
Richard Goyder, Wesfarmers
How is the world of low returns impacting on your business and your decision making? Are you more or less likely to invest overseas in 2017?
We have made a significant investment overseas in 2016 through the acquisition of the Homebase business in the UK. The first Homebase store, re-branded as Bunnings will open early in 2017, and once we have proven the format, further capital investment will follow. Lower returns and lower cost of money are a reality at the moment. We have reduced our investment hurdle rates and continue to see opportunities to grow our existing businesses, while always looking at portfolio options.
Do you consider that China is a more or less an attractive market for your business as its growing middle class comes with questions about the economy's debt buildup and rising political and regulatory risks?
China will provide Wesfarmers, and Australian businesses with many opportunities in the years ahead, as will the broader region. We will continue to be a significant purchaser of product from China, and assess any investment opportunities against our risk adjusted cost of capital.
How concerned are you about Australia losing its AAA credit rating? What, in your opinion, are the implications for your business of a cut in the rating?
The AAA rating is an important indicator of the strength of the Australian economy, and appropriate government policies. Ratings force disciplines, and we need to be very disciplined on the fiscal front in a volatile and uncertain world. Wesfarmers has a strong balance sheet, and good cash generating businesses, and we will strongly protect that, which should ensure ready access to finance when we require it.
Are you worried about the chaos and dysfunction in Canberra? What policy reforms do you think should be prioritised in the interests of the nation in 2017?
We need a proper functioning parliament which gets the important work of managing government finances, and implementing appropriate policies which provide incentives to individuals and the private sector, while maintaining a social safety net for those in our community who need assistance. We haven't had that for a while, and strong leadership is required if we want the prosperity we have enjoyed over the past 25 years to continue.
What do business leaders need to do in response to the anti-business sentiment on both sides of politics and in the broader community?
Business needs to keep making the case on the critical role we play. For example, Wesfarmers employs around 220,000 people paying them over $8 billion, we are a top 10 taxpayer in Australia, our payments to suppliers exceeded $45 billion last year, we spent over $2 billion on capital, and we make significant community contributions. We also reduced our carbon emissions intensity and strengthened other sustainability initiatives.
Are you more or less likely to invest in automation this year than last year? If so what type of automation? Also, what are the specific measures you are taking to digitise your business?
Automation will play a key role in a number of our businesses in the future, from automated DCs to enhancing the service offering in all our businesses.
How much risk of power interruptions and cost increases do you assess for your business as baseload coal power generation is phased out and the electricity system becomes more reliant on renewables such as wind power?
Australia needs to be very careful that we do not lose a comparative advantage we should have in terms of low energy costs.
Do you think the RBA will raise or lower interest rates next year?
The RBA has very smart employees and Board. They will make decisions based on the outlook for inflation, and currency relativities. I can't help but think that the world needs to move to a point where there is a decent price put on money!
Do you feel positive or negative about a Trump presidency and why?
I am hopeful that it will be positive, at least for the short term for economic growth. I feel anxious that political campaigns may move to more extreme positions as a consequence of the US election, and am also anxious that we don't end up with a world which turns away from open trade and countries become more nationalistic.
What are the challenges, if any, to increasing the percentage of female leadership at your firm? What are the numbers and percentage of women who are direct reports to the CEO at your firm?
We have made reasonable progress on increasing the number of women in leadership roles over the past five years, but I would like more! Our Executive Leadership Team has 10 members, three are women.
Brian Hartzer, Westpac
How is the world of low returns impacting on your business and your decision making? Are you more or less likely to invest overseas in 2017?
Low returns - and low interest rates - are very challenging for banks, as it puts pressure on our deposit margins and can limit the appetite of businesses to invest. In the current environment it has meant increased competition from offshore banks who see Australia as relatively attractive compared to very low or even negative returns in their home markets.
An environment of lower returns requires even more intense focus on all elements of profitability. In particular it means an increased focus on efficiency and using digital technology to lower costs. At the same time we have increased our focus on ROE ensuring we allocate our capital resources in the best way.
When thinking about investing offshore, strategy must come before returns. Our strategy is focused on our core markets of Australia and New Zealand and that position remains. Currently offshore returns are lower than in our core domestic markets, although we do see good opportunities to support inward investment from Asia and to assist Australian companies with their expansion into Asian markets.
Do you consider that China is a more or less an attractive market for your business as its growing middle class comes with questions about the economy's debt buildup and rising political and regulatory risks?
In the long term China has strong economic growth prospects as its middle class continues to grow. For Australia one of its most important growth priorities has to be to increase its capacity across a range of industries to meet this growing demand.
However, this doesn't mean that Chinese growth will be in a straight line.
The growing debt build up in China certainly represents short term risks for stability and medium term risks that potential growth may be lowered as the allocation of credit becomes sub optional. This is something that the Chinese government is monitoring closely and managing with a number of supply side reforms as well as de-leveraging plans to reduce over-capacity.
Unlike most emerging markets, almost all of China's debt is domestically held and denominated in RMB with the banking system essentially funded by deposits and not being reliant on foreign capital.
How concerned are you about Australia losing its AAA credit rating? What, in your opinion, are the implications for your business of a cut in the rating?
It seems likely that Australia's sovereign rating will come under increasing pressure. If Australia was to lose that rating the impact on the sovereign's ability to finance its borrowings in the global markets will be hardly affected, however, the cost of borrowing will likely increase.
If the sovereign is downgraded, this will affect the credit ratings of the Australian major banks and there is likely to be an impact on the volume and cost of our wholesale borrowings. However the size of the impact will depend very much on market conditions and investor sentiment at the time. It's impossible to say what this will be – it could be immaterial over time – and importantly, Australian banks and the banking system are highly regarded by investors, most of whom are not restricted to investing in the AA rating category where Australian major banks are currently rated.
Are you worried about the chaos and dysfunction in Canberra? What policy reforms do you think should be prioritised in the interests of the nation in 2017?
Democracy is never pretty but the government has ended the year positively in getting aspects of its agenda through the parliament. To promote confidence and investment in the Australian economy policy certainty is important. With the election out of the way it is essential that the government focuses on important issues that support economic growth—without a strong economy, we won't have the tax base to support the health and other community needs politicians want to provide.
The number one priority should be to support strength in the economy. Robust economic growth will lend support to Australia's fiscal challenges. It will also help Australia transition to a services-led economy.
We believe increased investment in targeted infrastructure would play an important role in encouraging economic growth and confidence, and that governments should be prepared to borrow to build infrastructure that expands the productive capacity of our economy. We also need to take action to address the deficit - we don't support borrowing to fund current period spending - but it's vital we do so from a position of economic strength.
What do business leaders need to do in response to the anti-business sentiment on both sides of politics and in the broader community?
The starting point is to acknowledge the emotion behind the sentiment - for example, that many people feel left behind by globalisation, and think businesses are out just for themselves. Then we need to demonstrate that we're making genuine changes to address these concerns, and continue to tell the positive stories about the essential role that business plays in building and sustaining a healthy community.
The community expects banks, in particular, to act fairly and to help them achieve their goals. We need to demonstrate banks' key role in the health of the overall economy. As an industry we need to recognise that there is a trust gap and that at times we have not met the expectations of the community. Westpac is taking action including reviewing all our products, processes and policies as well as changing Westpac tellers' incentives to be based solely around customer satisfaction.
Are you more or less likely to invest in automation this year than last year? If so what type of automation? Also, what are the specific measures you are taking to digitise your business?
Automation continues to be a key investment for Westpac. Customers are increasingly using mobile and other digital channels to bank with us, and we're working to make sure that everything they can do in person, they can do themselves online 24 hours a day. Internally, we're using technology to make all of our processes "straight-through", which saves time and money. As part of this we're modernising our underlying technology infrastructure, putting in place something we call the "Customer Service Hub", which will give customers and seamless experience across all our channels.
How much risk of power interruptions and cost increases do you assess for your business as baseload coal power generation is phased out and the electricity system becomes more reliant on renewables such as wind power?
Reducing the emissions intensity of our energy mix is vital if we are to sustainably position Australia for the challenges of the future.
We also recognise that the transformation of Australia's energy sector over the coming decades is a complex issue, which presents a range of challenges and that a balanced approach is important to support a responsible transition across the economy.
As a major financial institution we have an important role to play in supporting the economic transition required to limit global warming to less than two degrees Celsius, through our lending and investments, in our operations and through engagement with all of our stakeholders.
Do you think the RBA will raise or lower interest rates next year?
We expect that interest rates will remain on hold during 2017.
Do you feel positive or negative about a Trump presidency and why?
It is too early to tell what the impact from a Trump presidency will be. However, if a number of his policies were able to be implemented they may well have a positive impact on economic growth in the United States. For example, a Trump presidency which focused on infrastructure and some winding back of excessive regulation could be a winning formula to boost confidence, investment and growth in the US economy.
However, if the wrong policy choices are made, particularly a retreat from global free trade, that could have significant negative effects for the global economy.
What are the challenges, if any, to increasing the percentage of female leadership at your firm? What are the numbers and percentage of women who are direct reports to the CEO at your firm?
Westpac has set a target for the proportion of women in leadership to be 50 per cent by 30 September 2017 and we are currently sitting at 48 per cent. We have also set a target to increase the proportion of female general managers to 40 per cent by 30 September 2017.
Reaching the target has required dedicated, ongoing focus within the parameters of various competing business priorities – that's why we have built it as a KPI into the Executive Team scorecards.
We use metrics to help show areas where we need to focus effort, for example the number of female applicants, compared to the number of females interviewed, shortlisted, receiving offers, and hired. This allows us to put specific interventions in place such as working with particular hiring managers or running brand campaigns for specific talent segments.
We also look to broaden our talent pool. Our Equilibrium program has allowed us to bring in exceptional talent from non-banking backgrounds. We've been running this program for two years already and results are positive in terms of being able to find women who have the right customer and delivery skills combined with leadership capability. Westpac provides these women with support in getting up to speed on specifically working in banking.
38 per cent of the CEO's direct reports are women. This is five out of 13 people.
Richard White, Wisetech Global
How is the world of low returns impacting on your business and your decision making? Are you more or less likely to invest overseas in 2017?
As a global technology company, we see our investment options and growth opportunities very differently to what traditional businesses might. We will continue to grow rapidly and expand our product development spend in order to become the 'operating system for global logistics'. We currently service customers in 125 countries and we have major organic and 'buy and build' growth opportunities in many major economies. We intend to accelerate our already high organic revenue growth with targeted strategic acquisitions in key geographic regions and logistics adjacencies. In 2015-16, we made acquisitions in China, Australia, South Africa and Germany and we plan to make a number of targeted acquisitions in Asia, Europe and Central/South America in the coming years.
Do you consider that China is a more or less an attractive market for your business as its growing middle class comes with questions about the economy's debt buildup and rising political and regulatory risks?
Our focus is worldwide and not region specific as we are cross border/global logistics experts. China is a valuable part of the global supply chain and as such is reliant on trading with other economies. China's growing middle class is reshaping the economy from a purely producer/exporter economy into a more balanced model with a lot of upside for physical goods and technology. We have substantial local operations and staff in China with thousands of customers and have recently opened new offices in Shenzhen and Shanghai.
How concerned are you about Australia losing its AAA credit rating? What, in your opinion, are the implications for your business of a cut in the rating?
Our focus is on creating value for our shareholders and creating profits for Australia. Country based credit ratings are an abstract concept as they related to us and therefore we will leave that debate to others.
Are you worried about the chaos and dysfunction in Canberra? What policy reforms do you think should be prioritised in the interests of the nation in 2017?
I think we should all take a deep breath, stop complaining about our political leaders and focus on the future, improving the economy, on building effective education, and supplementing the local economy with high value immigration that can contribute to the wealth of Australia. We need to lift each other up and help everyone strive for betterment. The politics of division, short-term-ism and sectarian interest seem to me to be what we must fix.
What do business leaders need to do in response to the anti-business sentiment on both sides of politics and in the broader community?
Is there really a broad 'anti-business' sentiment? I think there is a broad and valid anti-bad-business/anti-bad-leadership sentiment but I still believe that good businesses (and good government) enables and empowers us all, employs us and our children and enriches us all.
Are you more or less likely to invest in automation this year than last year? If so what type of automation? Also, what are the specific measures you are taking to digitise your business?
For ourselves and for our customers and how they receive our product we put "productivity at the centre of everything". An essential part of innovation is automation and we have automated our own business processes and our customer's processes.
We are relentless about innovation and invest heavily in increasing productivity of the world's supply chains through automation of processes. We intend to focus substantial effort on natural language processing, machine learning and AI (Artificial Intelligence) in a concerted effort to drive automation and productivity further and faster than ever before and in 2016-17 we intend to invest more than $48 million in innovation and product development.
How much risk of power interruptions and cost increases do you assess for your business as baseload coal power generation is phased out and the electricity system becomes more reliant on renewables such as wind power?
We have no deep concern. Australians are very lucky on a world scale and there are far worse problems for many other economies. We have had incredibly reliable power in our Australian offices and whilst we definitely understand the issue and pain points caused by changing energy models, we believe that the public debate is about a (mostly) future problem that can be solved with the right commercial and governmental focus.
Do you think the RBA will raise or lower interest rates next year?
Not applicable
Do you feel positive or negative about a Trump presidency and why?
I remain a political agnostic, that said, all change is a big opportunity for WiseTech Global and we look forward to helping our customers (and their customers) manage the 'new order'.
What are the challenges, if any, to increasing the percentage of female leadership at your firm? What are the numbers and percentage of women who are direct reports to the CEO at your firm?
We are a meritocracy, we select only on talent, ability and skill and over 35 per cent of our hires in the last two years are female and over 32 per cent of our staff are female. As a global technology company, we are very concerned about the pool available in the technical profession of software development it appears biased by early childhood and societal experiences that limit talented females from 'selecting in' to information technology and software development thus we put a lot of effort into pushing back on that bias. Together we as a society need to look deeply into the early childhood and societal "truck and dolls" problem that biases females out of IT and males into that profession.
![Peter Coleman of Woodside](http://web.archive.org./web/20161210140042im_/http://www.smh.com.au/content/dam/images/1/0/6/2/g/1/image.imgtype.articleLeadwide.620x349.png/1461136184308.png)
Peter Coleman, Woodside Petroleum
How is the world of low returns impacting on your business and your decision making? Are you more or less likely to invest overseas in 2017?
In the current environment, the most immediate opportunities for future investment are likely to be expansion and extension of our existing, low-cost production assets. There is more opportunity for phased development of projects, delivering returns sooner, than mega-projects, requiring massive upfront investment and long delays before production starts. We already have assets overseas, including in Myanmar, Senegal and Canada, and continue to assess new opportunities elsewhere around the world, as well as in our existing and potential assets in Australia.
Do you consider that China is a more or less an attractive market for your business as its growing middle class comes with questions about the economy's debt buildup and rising political and regulatory risks?
The growing middle class in China and the consequent rising demand for energy provides opportunities for LNG, particularly given China has adopted ambitious emissions reduction targets. LNG's low emissions intensity makes it an ideal energy source as China aims for strong economic growth while reducing coal dependency and CO2 emissions. We see potential for further growth in this trade relationship as China aims for sustainable economic development.
How concerned are you about Australia losing its AAA credit rating? What, in your opinion, are the implications for your business of a cut in the rating?
Woodside prides itself on maintaining a strong balance sheet and operating cash flow. Naturally, we value the strength of Australia's economy, as reflected in its credit rating. But more importantly, our proven capability and prudent decisions we have made in the past put us in a strong position, regardless of external factors.
Are you worried about the chaos and dysfunction in Canberra? What policy reforms do you think should be prioritised in the interests of the nation in 2017?
The certainty and stability of regulatory arrangements in Australia have facilitated investment and helped this country attract around $200 billion in LNG investment over the past decade. It's essential for future long-term investment in our industry that governments continue to value this stability and consult with businesses to ensure policy changes do not jeopardise our competitiveness in the global marketplace.
What do business leaders need to do in response to the anti-business sentiment on both sides of politics and in the broader community?
We acknowledge the heightened scrutiny by both politicians and the broader community of businesses such as ours and we stand by our record of transparency and consultation with federal, state and local governments.
As a leading Australian employer, producer and exporter, Woodside is very conscious of the need to explain to our stakeholders how our activities benefit not only the communities in which we operate, but contribute to the economic well-being of the nation. It should also be remembered that businesses the size of Woodside do not just support our own institutional and retail investors, but we also provide opportunity, wealth and jobs for our suppliers and contractors, many of whom are small and medium-sized Australian enterprises.
Are you more or less likely to invest in automation this year than last year? If so what type of automation? Also, what are the specific measures you are taking to digitise your business?
At Woodside, we have consciously positioned ourselves in recent years as an industry leader in innovation. We have invested in cognitive computing and advanced analytics to continuously improve our operations, and to ensure our company and the communities in which we operate derive maximum benefit from knowledge accrued over decades. We have adopted the IBM Watson cognitive system which is already revolutionising the way we do business, from drilling oil wells to project management.
How much risk of power interruptions and cost increases do you assess for your business as baseload coal power generation is phased out and the electricity system becomes more reliant on renewables such as wind power?
We are in the enviable position of providing a power source that is reliable and predictable, as well as having a low emissions intensity.
Do you think the RBA will raise or lower interest rates next year?
No answer
Do you feel positive or negative about a Trump presidency and why?
We are in the business of producing and marketing oil and gas, and do not comment on political developments, beyond saying we stand ready to work openly and productively with the governments of all countries where Woodside has operations.
What are the challenges, if any, to increasing the percentage of female leadership at your firm? What are the numbers and percentage of women who are direct reports to the CEO at your firm?
Woodside is committed to providing equality, diversity and opportunity in the workplace for all its employees. We have a good track record in this area, female employment at Woodside is 28.5 per cent against an industry average of 14 per cent. We strive continuously toward ensuring our business reflects the communities in which we operate.