ANYONE FAMILIAR WITH ADSTEAM’S CORPORATE STRUCTURE IN THE 1980S WILL APPRECIATE WHAT THE BOARD HAS HAD TO DEAL WITH

TO BE BLUNT, STADIUM AUSTRALIA HAS BEEN A ORGANIZATIONAL NIGHTMARE WITH SUPERIOR JUDGEMENTAL SKILLS REQUIRED AT EVERY STAGE

TO GIVE YOU SOME INDICATION OF ITS COMPLEXITY, THERE HAVE BEEN CLOSE TO 100 MATERIAL CONTRACTS INVOLVED IN THE PROJECT

A COMPUTER PROGRAM HAS BEEN DEVELOPED BY FREEHILLS TO OUTLINE THE INTERRELATIONSHIP BETWEEN THE CONTRACTS.

WHAT ARE THE CRITICAL ISSUES IN THE CONTRACT? WHAT ARE THE REPORTING REQUIREMENTS? WHAT ARE THE CROSS DEFAULT TRIGGERS?

THIS PROGRAM HAS BEEN CRITICAL NOT ONLY BECAUSE OF THE COMPLEXITY OF THE DOCUMENTATION BUT BECAUSE MANY OF THE LAWYERS WHO DRAFTED THE DOCUMENTATION ARE NOW HAPPILY RETIRED -- AND COMPLAINING ABOUT THEIR CLUB PRIVILEGES.

THE KEY OBJECTIVE FROM THE GOVT’S PERSPECTIVE WAS TO BUILD STADIUM AUSTRALIA WITH MINIMAL GOVERNMENT FUNDING AND MAXIMUM PRIVATE SECTOR INPUT

THE MULTIPLEX CONSORTIUM DEVELOPED AN UNIQUE CONCEPT AND STRUCTURE. AGAINST ALL EXPECTATIONS THEY WERE THE SUCCESSFUL BIDDER. THE PRICE WAS FIXED AS WAS THE DESIGN.

THE UNIQUE ASPECTS INCLUDED A PUBLIC FLOAT OF THE MANAGEMENT COMPANY, AN OUTSOURCING OF ALL MAJOR SERVICES AND A RECONFIGURATION OF THE STADIUM AFTER THE GAMES

ONCE THIS STRUCTURE AND CONCEPT WAS AGREED, THE BOARD WAS APPOINTED TO IMPLEMENT THE PLAN. NOT A GREAT SEQUENCE OF EVENTS BUT ONE WHICH WE ALL ACCEPTED.

IT WAS AT THIS STAGE THE FUN AND GAMES – AND THE ETHICAL ISSUES - STARTED TO EMERGE.

WHAT ARE THE ETHICAL ISSUES IN BUSINESS – AND ARE THEY DIFFERENT WHEN YOU DEAL WITH GOVERNMENTS?

FIRSTLY LET’S REVIEW ETHICAL ISSUES.

COMPANIES ARE FACING MORE ETHICAL QUANDRIES THAN EVER BEFORE.

TECHNOLOGICAL CHANGE HAS BROUGHT WITH IT A WHOLE NEW RANGE OF ISSUES. THEY RANGE FROM GENETICALLY MODIFIED PRODUCTS TO PRIVACY ON THE INTERNET.

GLOBALISATION TAKES COMPANIES INTO OTHER COUNTRIES WHERE BUSINESS IS DONE BY DIFFERENT RULES

COMPETITIVE PRESSURES FORCE FIRMS TO TREAT THEIR STAFF IN WAYS THAT DEPART FROM PAST PRACTICE

ADD UNPRECEDENTED EXTERNAL SCRUTINY LED BY NON - GOVERNMENT ORGANIsATIONS, AND YOU CAN SEE THAT DEALING WIITH ETHICAL ISSUES HAS BECOME PART OF EVERY BOARD’S RESPONSIBILITIES

SOME RESPONSIBILITIES HAVE LEGAL CONSEQUENCES. THE LAW, ESPECIALLY IN THE US, HAS ADDRESSED THE ISSUE OF $500 SCREW DRIVERS AND KICKBACKS IN ONE FORM OR THE OTHER.

BUT LAW IS NOT THE ONLY MOTIVATOR. FEAR OF EMBARRASSMENT AT THE HANDS OF THE NGOS AND THE MEDIA HAS GIVEN BUSINESS ETHICS AN EVEN BIGGER CARROT TO MAKE SURE THEY GET IT RIGHT.

COMPANIES CONTINUE TO WRESTLE WITH THE ISSUES AND HOW TO DEFINE CORPORATE VALUES BUT MOST CORPORATE CODES WILL NORMALLY CONTAIN SOMETHING ABOUT INTEGRITY - SOMETHING ABOUT RESPECT FOR THE INDIVIDUAL - SOMETHING ABOUT HONOURING THE CUSTOMER.

OF COURSE, LIFE CANNOT ALWAYS BE A BED OF ROSES. SOMETIMES CORRUPTION, DESPITE ALL BEST EFFORTS AND A CODE OF ETHICS, MAY STILL BE UNAVOIDABLE

MY OLD COMPANY SHELL, WHERE I WORKED FOR FIVE YEARS, IS LOCATED IN SOME OF THE WORLD’S FLASHPOINTS

ONE SHELL EXECUTIVE HAS THIS TO SAY: "IF SOMEONE STICKS A KALASHNIKOV THROUGH THE WINDOW OF YOUR CAR AND ASKS FOR 20 NAIRA, WE DON’T SAY THAT YOU SHOULDN’T PAY. WE SAY IT SHOULD BE RECORDED."

SO JUDGEMENT IS ALWAYS REQUIRED.

I AGREE WITH THE POINT MADE EARLIER BY ALLAN MOSS THAT ‘SUNLIGHT IS THE BEST DISINFECTANT’. ALL THE SAME, AWARENESS OF THE REALITIES OF A SITUATION CAN MAKE THAT DISINFECTANT EVEN MORE EFFECTIVE

IT IS ALSO CERTAINLY WISE TO REMEMBER THAT THE MINISTER AND THE GOVERNMENT SHOULD NOT ASSUMED TO BE JOINED AT THE HIP

MINISTERS IN GENERAL HAVE A SHORT-TERM FIXATION BY DINT OF THE VOLATILITY OF THE ELECTORAL PROCESS AND THE MACHINERY OF POLITICAL PARTIES. THEY ARE USUALLY KEENER ON SECURING POSITIVE HEADLINES THAN IN LONGER TERM GOVERNMENT PRIORITIES

THE COMBINATION OF INDIVIDUAL MINISTERIAL DISCRETION AND MAJOR PUBLIC PROJECTS CAN MAKE FOR ENORMOUS DIFFICULTIES IF THERE ARE NOT CHECKS AND BALANCES PUT IN PLACE

THE TRICKY PARTS FOR GOVERNMENTS IN THESE PROJECTS ARE AT THE START, WITH TENDERING AND SELECTION ISSUES, AND AT THE END, WITH DELIVERY AND FINAL FUNDING ISSUES. THEY HAVE MOSTLY GOT THE FRONT END RIGHT, NOT SO MUCH YET WITH THE BACK END

WHAT MAKES THE DIFFERENCE IS HAVING A FORMALISED PROCESS FROM THE OUTSET AND A MECHANISM FOR DISPUTE RESOLUTION

WITH STADIUM AUSTRALIA, WE HAVE BEEN FORTUNATE TO HAVE SUCH A PROCESS WHICH ALL PARTIES OBSERVED, AND ALSO THE PRESENCE OF DAVID RICHMOND WHO PLAYED AN IMPORTANT ROLE IN FACILITATING DISPUTE RESOLUTION AND MINISTERIAL LIAISON

IT’S TO MICHAEL KNIGHT’S CREDIT THAT HE HAS PAID ATTENTION TO RICHMOND’S COUNSEL THROUGHOUT. MICHAEL KNIGHT HAS SHOWN A DETERMINATION TO HAVE ALL OLYMPIC GAMES INFRASTRUCTURE COMPLETED CONSISTENT WITH THE ORIGINAL CONTRACTS. HE HAS DONE WHAT HAD TO BE DONE

PERHAPS THE KNOWLEDGE THAT THE WORLD’S MICROSCOPE WAS TRAINED ON THEM HAS MADE EVERYBODY IN THE PROCESS - FROM THE MINISTER DOWN - HIGHLY CONSCIOUS OF THEIR SPECIAL POSITION OF TRUST AND OF THE NEED TO MEET THEIR OBLIGATIONS

IN MY EXPERIENCE, AND ESPECIALLY IN THE CASE OF STADIUM AUSTRALIA, THE MOST COMPLICATED ETHICAL ISSUES HAVE BEEN THOSE DRIVEN BY CONFLICTS OF INTEREST

THE CONFLICTS WE FACED AS A BOARD WERE AS DIVERSE AND AS DIFFICULT TO BALANCE AND RESLOVE AS ANY I HAVE FACED IN MY BUSINESS CAREER

MANY OF THE CONFLICTS WERE DRIVEN BY THE STRUCTURE SOME WERE DRIVEN BY THE NUMBER OF PARTIES SOME WERE DRIVEN BY THE DIFFERING TIME PERSPECTIVES OF ALL THE STAKEHOLDERS

LET ME GIVE YOU AN EXAMPLE

WITH SUCH A LONG CAST OF STAKEHOLDERS - MULTIPLEX, SOCOG, OCA (NSW GOVT), OGDEN, SODHEXO, THE BANK LENDERS AT THE OUTSET – THERE WERE INEVITABLE CONFLICTS GIVEN THE DIFFERENT PRIORITIES OF INTEREST GROUPS

CONFLICTS BETWEEN LONG-TERM AND SHORT-TERM PRIORITIES OF STAKEHOLDERS HAD TO BE MANAGED. THE PRIVATE DEVELOPERS AND SUPPLIERS WANTED AN EARLIER RETURN, WHILE GOVERNMENT AGENCIES ARE FOCUSED ON COMMERCIAL LONGEVITY. THE STADIUM REVERTS TO THE NSW GOVT IN 30 YEARS.

PRIVATE INVESTMENT IN PUBLIC PROJECTS IS INHERENTLY A TOUGH NUT TO CRACK WITH THE SPASMODIC REVENUE STREAMS OF SUCH VENUES CREATING COMMERCIAL DIFFICULTIES AND NO END OF TENSION

‘CHINESE WALLS’ WERE NECESSARY TO ACHIEVE AND MAINTAIN STANDARDS OF PROBITY, ESPECIALLY IN THE CONSTRUCTION STAGE

MULTIPLEX WAS A GOOD EXAMPLE. IT WAS BOTH A SHAREHOLDER AND A CONTRACT MANAGER ON A FIXED PRICE. PROHIBITIONS ARE STILL IN PLACE SO THAT THEY ARE UNABLE TO HAVE A BOARD REPRESENTATIVE

THE ISSUES FACING THE DIRECTORS OF STADIUM AUSTRALIA WERE TO RANK THE PRIORITIES OF INTEREST GROUPS IN MAKING OUR DECISIONS. IN PARTICULAR, WE NEEDED TO WEIGH UP THE SHORTER TERM FOCUS OF THE PRIVATE SECTOR AGAINST THE LONGER-TERM GOALS OF THE PUBLIC SECTOR

LET ME EMPHASISE THAT WE HAVE HAD NO SPECIFIC DILEMMAS WITH THE GOVERNMENT – IT BEGAN AS PURELY A BUSINESS RELATIONSHIP AND HAS STAYED THAT WAY

THE KEY STAKEHOLDERS HAVE NATURALLY SOUGHT TO PUSH THEIR OWN AGENDAS - BUT THEY HAVE ALSO BEEN COGNISANT NOT TO SUFFER THE CONSEQUENCES OF PUSHING THOSE AGENDAS TOO FAR

THE FINANCIAL REVIEW TEST IS ALL ABOUT COMPLYING WITH PREVAILING BUSINESS RULES AND PRACTICES.

THE DAILY TELEGRAPH TEST IS ABOUT PERFORMING UP TO PUBLIC EXPECTATIONS AND PERCEIVED SOCIAL VALUES

THERE ARE NO HARD AND FAST PANACEAS FOR THESE TESTS, BUT THE ADOPTION OF TWO POLICIES IN GENERAL ARE PLAIN COMMON SENSE: TO ADHERE TO THE RULE OF LAW AND TO ACT IN GOOD FAITH

RULE OF LAW IN SOCIETY DEPENDS ON INDIVIDUALS BEHAVING IN A FAIR AND REASONABLE MANNER. SMALLER ORGANISATIONS HAVE TO WORK HARDER ON CHINESE WALLS AND TO AVERT DAMAGE FROM A ‘BAD EGG’. THE STADIUM AUSTRALIA BOARD HAS BEEN AWARE OF THESE DANGERS AND TAKEN SUITABLE PRECAUTIONS AND INITIATIVES

THE SAME HAS APPLIED WITH ACTING IN GOOD FAITH. WE HAVE BEEN CONSCIOUS THAT THE SUCCESSFUL COMPLETION OF THE PROJECT MEANT ENSURING THAT ALL INVOLVED DID EXACTLY WHAT THEY WERE REQUIRED TO DO, AS OPPOSED TO WHAT THEY COULD GET AWAY WITH

WHAT SPECIAL INFLUENCES OR ISSUES AROSE BECAUSE OF GOVERNMENT INVOLVEMENT?

WELL I THINK TO A LARGE EXTENT THE GOVERNMENT WAS A STABILISING PARTY IN MOST OF THE CONFLICT DISPUTES. THE VIEWS OF GOVERNMENT REPRESENTATIVES WERE ALWAYS LONG TERM.

WE KNEW THEY WERE COMMITTED TO LIMITING THEIR FINANCIAL EXPOSURE AND THEY GAVE NO INDICATION AT ALL OF WANTING TO CHANGE THIS BASIC ASSUMPTION.

THEY GENERALLY EXPRESSED THEIR VIEW IN A STAIGHT FORWARD MANNER – SO LONG AS YOU WERE A STUDENT OF ‘YES MINISTER’! THEY ENCOURAGED AND SOMETIMES FORCED THE PRIVATE SECTOR TO COME TO A NEGOTIATED SETTLEMENT – WHICH THEY GENERALLY DID.

THE GOVERNMENT’S INVOLVEMENT WAS GENERALLY POSITIVE – GIVEN THE TIME FRAME OF THE BUSINESS IS LONG TERM , AS ANY INFRASTRUCTURE PROJECT IS, THEY WERE A VALUABLE PARTNER.

AS I MENTIONED EARLIER, HAVING A FORMALISED DISPUTE RESOLUTION PROCESS IN PLACE WAS A GODSEND.

IF THERE IS NO CLEARLY DEFINED PATH TO DELIVER THE DESIRED OUTCOME, THEN IT’S ALL TOO EASY FOR RELATIONSHIPS BETWEEN GOVERNMENTS AND BUSINESS TO REVERT TO THE SHORT-TERM ISSUES AND END UP IN ENDLESS SQUABBLES AND WORSE

YOU MAY WELL ASK: IF WE WERE STARTING AFRESH, WOULD WE RECOMMEND THE SAME STRUCTURE?

CERTAINLY AFTER THE BLEDISLOE CUP THE OTHER SATURDAY, WE ALL FORGOT ABOUT THE STRUCTURE AND BELIEVED THAT WE GOT MOST THINGS RIGHT

I THINK THE 109,000 FANS WHO ATTENDED WOULD AGREE WITH US

THE GAME CERTAINLY WARRANTED BEING PLAYED IN HEAVEN—BUT THE ORGANISATIONAL STRUCTURE STILL ORIGINATES IN HELL

ANY STRUCTURE WHICH REQUIRES MORE THAN 100 AGREEMENTS IS GENERALLY NOT THE MOST COMMERCIAL. THE LINES OF ACCOUNTABILITY AND RESPONSIBILITY BECOME TOO EASILY BLURRED.

WE HAVE IMPROVED OUR MANAGEMENT AND GOVERNANCE BY SIMPLFYING THE MANAGEMENT STRUCTURE. BUT THE CONCEPT OF OUTSOURCING ALL FUNCTIONS HAS RARELY BEEN RECOMMENDED AND LESS RARELY BEEN IMPLEMENTED

THE DIFFICULTIES LIE IN DIFFERING OBJECTIVES, DIFFERING REWARDS AND DIFFERING CULTURES. AT THE END OF THE DAY, SOMEONE NEEDS TO BE CLEARLY IN CHARGE, REWARDED FOR TRADING PROFITABLY AND FOR MINIMISING INHERENT CONFLICTS RATHER THAN INCREASING THEM BECAUSE OF LEGAL AND STRUCTURAL IMPEDIMENTS.

FINALLY, THE STADIUM AUSTRALIA BOARD WILL FACE AN ISSUE WITH STRONG ETHICAL OVERTONES AFTER THE OLYMPICS: WHETHER OR NOT TO DISMANTLE THE CURRENT CORPORATE STRUCTURE

I MENTIONED EARLIER THE COMPLEXITY OF THE STRUCTURE. MY VIEW IS THAT IT WOULD BE ADVISABLE TO UNWIND THIS STRUCTURE WHICH HAS SERVED ITS PURPOSE AND HAS NO DISCERNABLE FUTURE VALUE

LOGIC DOES NOT ALWAYS CARRY THE DAY, HOWEVER, SO IT WILL BE INTERESTING TO SEE JUST WHO WILL RUN STADIUM AUSTRALIA AS AN ONGOING ENTITY. OUR GREATEST ETHICAL CHALLENGE YET MAY BE STILL AHEAD OF US, REQUIRING SELF-INTEREST BE PUT TO ONE SIDE

THANK YOU FOR GIVING ME THE OPPORTUNITY TO SPEAK THIS EVENING AND FOR BEING SUCH AN ATTENTIVE AUDIENCE