Meet Ilana Atlas: the people person lawyer who diverted to banking, then boardrooms

• From managing difficult lawyers to chairing major public companies
• Ten years of innovation at Westpac helped prepare for the ANZ challenge
• Gender revolution in the workplace is unstoppable - and uncomfortable for some
• Coke pay protest a communication issue, downplays need for sugar tax
• Frank Lowy was inclusive at Westfield and delivered for shareholders
• Most proud of the $32 billion Westfield sale to Unibail

No one can accuse Ilana Atlas of lacking the necessary experience to chair public company boards. After 15 years as a legal partner at Mallesons and 10 years in senior roles at Westpac, she went full-time into the boardroom 8 years ago and stepped up to succeed David Gonski as Coca Cola Amatil chair last year.

She has now assembled a wide-ranging board portfolio spanning chairing Coca Cola Amatil, sitting on the ANZ board, the University of Sydney, chairing not for profits and also saying farewell to Westfield as a public company.

Ilana is an innovator and a trail-blazer who regrets none of her deals, sees university governance becoming more corporate and believes banks need to rebuild community trust through the current tumultuous times.

And as the gender debate rages, she’s not taking a backward step in doing her bit, saying the social revolution in the workplace will continue apace, no matter how uncomfortable it makes some of the players.

Welcome to The Constant Investor chairman interview series, I’m Stephen Mayne, and this week we’re interviewing Ilana Atlas, Chairman of Coca Cola Amatil, Director of ANZ, and a soon to be former Director of Westfield.  Welcome to The Constant Investor, Ilana.

Thank you, Stephen.

Now, first up thanks very much for coming on, I’ve been on a regrettable run of 12 male Chairs in a row for this series so it’s very welcome to have some diversity.  Do you get a lot of speaking and interview requests as you are one of the leading female Chairs in Australia?

Thank you, that’s generous.  Yeah, I do get quite a few requests.  I suppose I’m naïve enough to assume I’ve got something to say rather than it simply being my gender but I realise that that may be a factor.

Okay, now the media was pretty appalling recently in terms of the gender debate about the AMP issues which blew up over Catherine Brenner.  You mentioned at the recent Australian Shareholders’ Association conference that we’re all watching a social revolution in the workplace on the gender question.  So, tell us about the role you’ve played and your observations of that social revolution.

Thank you.  Well, I suppose in my career I have had two priorities, the first has been to encourage as many women as possible to achieve their aspirations, particularly in the workplace.  The second would be to ensure that the organisations that I have been involved with have assisted women, facilitate that.  I think it’s been probably too easy to focus on women, and to a degree I think we have let ourselves be the focus in the sense that people talk about mentoring women, coaching women, training women.  I think the reality of this revolution is that it involves 100% of the population not just 50% and so the focus needs to be on men and women, and I think the focus needs to be on a whole of system change that facilitates women’s participation in the workforce.  That means sort of all institutions in society; companies, schools, communities, governments, that really need to be able to facilitate gender equality and women’s participation in work.  I think we talk a lot about a meritocracy but to have a true meritocracy we need to have a level playing field and I don’t believe that currently exists.

In the recent debate we’ve seen people like Chris Corrigan pushing back and making some pretty controversial statements after AMP and he was resisting appointing a single woman to his all male board at Qube.  Are you confident we will continue to see the recent trend, which is 50% of new appointments to ASX 200 boards being female and that that will continue into the foreseeable future?

Well I’m not sure I can be confident but I do think we’re heading in that direction.  I call it a revolution, in all revolutions people get a bit uncomfortable, both the people who are affected by changes in the status quo and the people who are trying to facilitate the change.  But, at the end of the day this is unstoppable and we have seen profound change and will continue to see that so I do believe we’ll continue to head in the right direction.  Obviously, women on boards is a small part of true gender equality, an important part, an important symbolic part, and I do believe we’re heading in the right direction.

Now, let’s talk about your career.  So, you grew up in Perth, you got an honours law degree in Perth and then you headed to Sydney.  Why did you leave Perth?

Well, it was the late Seventies, a long time ago.  Perth was a small place and I suppose I had aspirations to see if I could achieve in a bigger place.  So, that was why I left.

Then you did 15 years as a partner at Mallesons, the law firm, you were made a partner, I think, at 30 and you had three years as Managing Partner.  What did you specialise in and what did being a partner at a big Sydney corporate law firm like Mallesons teach you which makes you a better Director and Chairman today?

Well, I was a corporate lawyer so I specialised in mergers and acquisitions but at the time Mallesons’ focus was on developing relationships with clients.  So, that was really what my focus was and endeavoured to assist my clients with most of their corporate governance legal issues.  So, in that I really came to understand the importance of a relationship of trust with clients so that you have the credibility to actually tell them things that perhaps they don’t want to hear and you having credibility so they’re prepared to act on it.  I think I also learnt the importance of keeping an open mind and listening to all sides of the debate.  So, those two things really have, I think, stood me in great stead as a director.

Now, being Managing Partner doesn’t sound like it’d be the easiest job, managing a whole bunch of strongly opinionated and very intelligent lawyers.  How did you go keeping all the partners in line and managing to a bottom line, a profit centre, and what was the hardest part of that job and did you enjoy it?

So, I loved my time at Mallesons, it was obviously where I grew up and learnt quite a lot of my skills.  Being Managing Partner in a law firm is a very hard gig, there’s no question, and the greatest skill that you have are your influencing skills and you hone them to the highest levels.  Partners don’t particularly like being managed, they have a healthy scepticism as management, so all good ideas that you come up with have to be theirs which is obviously absolutely fine.  It’s an incredibly smart group of people, a very collegiate group of people who understand the importance of working together for a client.  So, whatever proposals you come up with have to be very sound and have to make sense to them basically or you get laughed out of town.  So, you learn pretty early about the influencing challenge. 

Now, I think your first board or one of your first boards was Victoria’s Public Transport Corporation, which you joined when you were in Sydney as a partner of Mallesons.  How did that happen?  Because, you were in Sydney, it was in Melbourne, and it went through quite a…

No, I was in Melbourne actually.

You were in Melbourne at the time, okay.

Yeah, I was in Melbourne, I was a partner in Melbourne.

It was quite a tumultuous period, I think they privatised much of Victoria’s public transport during that period.  So, how did you come to be on that board and what was it like?

It was tumultuous, it was a really fascinating time to be on that board.  I really don’t know why I was asked.  At that time I was doing a lot of legal work for government agencies, particularly the Water Board in Melbourne and perhaps that’s how I came to the notice of government.  But, I really can’t tell you how it happened but it was a very interesting time to be part of the PTC.

Now, a lot of partners at law firms jump off and become professional directors.  You did something very different and you went off and spent 10 years as a senior executive at Westpac.  So, first tell us about the two year period when you were the company secretary and general counsel.  It was the peak of the dotcom boom and then the dotcom crash, you must have seen all sorts of interesting things there.  What was that like?

Well, it was a wonderful opportunity to work with Westpac at that time.  David Morgan was the CEO and as general counsel, obviously, I worked with other Chairs later but as general counsel worked with two Chairman in John Uhrig and Leon Davis, exceptional individuals.  Westpac at that time was quite interesting because Westpac had had their near-death experience in the Nineties so they really knew how to keep out of trouble.  David really had a very deep understanding of risk and how to take it and when not to, and had really developed a great team around him.  So, it was a fascinating time to be at Westpac because at that point the organisation was really embracing the concept of a social license to operate.  I think it was at the forefront of governance and sustainability.  We were looking at concepts like matching gifts for employees which was new, we were focused on how we could work with indigenous communities at that time which was very much something that Leon was passionate about and was the beginnings of Jawun, and we signed up to the Equator Principle.  So, again climate change was something of great interest in the organisation.  So, it was I suppose a time of great innovation, I think, at that point.

And why did you decide to jump out of the general counsel role into a different role where your title was Group Executive People and Performance, so right across the group, and you did that for eight years.  Was it your idea or did the CEO say how about doing something which is not so law focussed and get more into the operations?

Well, it was the CEO’s idea, and Phil Chronican, who was the CFO at the time I think.  They’d known that I’d actually had people roles when I was at Mallesons and that I’d been responsible for hiring at Mallesons.  It had always been a passion of mine, a great interest, and I suppose I’d shown that when I was at Westpac in the general counsel role.  So, they asked me if I’d be interested in it and I jumped at the opportunity to do something different.  I’d been a lawyer for a long time and Westpac as an organisation does give people opportunities to try things that are different and they were prepared to give me a go and I was very happy to embrace the opportunity.

Just briefly what were, do you think, the best things you achieved in that role across Westpac? 

I would say that again it very much is a collaborative team effort being part of the organisation but one area, I think, that probably made a significant amount of difference was the focus we had on leadership in the organisation.  So, we looked at who in Westpac leads teams.  So, there are about 2,000 people through the organisation at that point who led teams, and focus on okay, we know from our surveys of employees that the most important relationship you have in an organisation is with your immediate manager and that has the greatest influence on your engagement with the organisation.  So, we felt okay, if we can really help improve the capability of our leaders leading their teams that would have an impact on performance.  So, that’s what we did and I think we did improve significantly the leadership capability in the bank and I think it did have an effect on performance.

Now, let’s fast forward to today.  You’re currently a director of ANZ, do you think that your ten years at Westpac have helped in making you an informed and useful Director at ANZ, is that the case?  Do you feel you’ve got extra insights because you’ve say inside at executive level in another bank and how do you sort of deploy that additional knowledge that you’ve got that your typical director at ANZ wouldn’t have?

Well, when you are considering boards, as you know, you really think about the different skills that everyone brings.  So, I would think that I do bring skills, and that’s understanding of banks from that experience at Westpac.  So, yes I do think it’s very useful in my role at ANZ.

And the Royal Commission and all the bank bashing going on at the moment, I mean obviously just as one director you’re not driving the tactics and the strategy but what are your reflections on the way the public debate is going and the way that the government and regulators are dealing with the banks at the moment?

Well, I think it’s too early to speak definitively about the Royal Commission and what it will find.  I think ANZ and Shane has been clear that we understand why there is a Royal Commission and we’re working hard to provide the information that’s being required, and hope that that result of it will assist the banks in developing greater levels of credibility and trust with their customers.

Now, in 2010 you decided to make the full time jump from an executive role after 35 years in the workforce including 25 years as either a Mallesons partner or a senior Westpac executive, why did you decide in 2010 at the age of 56 that that was the time to jump and talk about the transition you made, the first board you got onto, how you managed that major career transition?

Certainly, I was ready for the next thing, as you said I had been in executive life for a long time and I think you get to a point where you do know that you want to try something different.  Certainly, the role I had you feel accountable 24/7 and even when you’re not sort of in the office you are thinking about it, I suppose spending time on what you can do differently, how the organisation can improve.  I think it gets to a point where you do want to do something different and that was the case for me.  In terms of the next role I was fortunate in that I did have a number of board roles at that time, I was Chair of Bell Shakespeare, I was on the council of the ANU and also I continued to Chair Westpac superannuation plan at that point and also the Westpac Foundation.  So, I was busy and it gave me an opportunity to transition into other non-executive director roles.  I was approached for the Suncorp board by a search firm and I think that Suncorp at that point had gone through a process of determining the skills that they needed in their next Director. 

I met John Story, who was the Chairman there, and Ziggy Switkowski was going to take over from John as Chair.  I’d known them both, not well, but John because he was Managing Partner of a law firm in Queensland that I’d worked with and Ziggy because he had worked at Telstra and Telstra was one of my clients.  So, I was fortunate enough to be appointed.  I’m sure it was a contested role and I was appointed to that.  So, that was my first listed company role.

Then tell us the similar sort of process around your entry to the Westfield and the Coca Cola Amatil boards.

Well, I think they were similar.  I was approached in relation to the CCA board and the same occurred in relation to Westfield, yes.

Now, let’s talk about Coke.  You’ve just succeeded David Gonski a year ago as the Chair.  He was there for a very long time and is a very prominent figure in corporate Australia.  How would you describe any changes that have happened over the past year since you took over as the Chair of Coca Cola Amatil?

Well, filling David’s shoes, as you point out, is very difficult, they’re more like boats.  So, I was just very conscious of that.  He’d made a significant impact on CCA and certainly it has been a legacy, significant legacy.  When I took over as Chair from David four Directors left the board at that point so it is pretty much a new board.  So, that gave us an opportunity to think about what had gone before us but also reflect on how we wanted to be different and we thought about it in terms of how we wanted to behave as a board and we considered our priorities, what we wanted to focus on, and we also considered what processes we felt or the way we operated needed to change.  So, we spent a bit of time thinking about those things which was a really good process actually.  Probably the most interesting element was to think about how we would behave as a board and it is quite interesting in light of some of the comments that have been made in the APRA report on CBA. 

So, we took the CCA values as our basis for operations, so they had to be straightforward and open, and to think about today and tomorrow.  Then we considered as a board how would we want to be seen by the organisation and how would we want to be seen by the market.  We certainly felt we wanted to be very energetic as a board, very engaged with the organisation, quite visible to the organisation, wanted the executive team, Allison and her team, to know that they should expect very constructive challenge from us but that we were all aligned in what we wanted to achieve.  We then focussed on our priorities as a board.  After that process I spent time with Allison and her team telling them what they could expect from us.

Now, what was the selection process like for your Chair because obviously you’ve got Atlanta, the Coca Cola Company, sitting there with 29%.  You’ve got a very influential and well-regarded predecessor and then you’ve got the rest of the board, as you said, four of whom were retiring.  So, talk about the influence of Atlanta in your selection and also the role of David that he played, was he influential and was it a contested situation, were there multiple candidates and it was a conventional the board will decide or how does it work when you’ve got those Atlanta considerations which are different from your normal public company?

So, TCCC are a very cooperative shareholder in a sense, we work together.  You’d have to ask David, I think, about the process and how it worked but my guess is it was a consultation process.  But, the two directors who are nominees of the Coca Cola Company would have been involved in that process in the same way as the other directors.

And talk about the regulatory challenges at Coke, you’ve got obviously a sugar tax discussion, you’ve got container deposit, how are you managing that in the current environment which is pretty febrile and there’s a fair bit of regulatory backlash, and business can’t be trusted sort of sentiment in the community.  So, how do you keep Coke popular, well-regarded and also manage those regulatory issues around healthy products?

Well, you’re right about the regulatory challenges.  As a board we’re very focussed on two elements that come out of the container deposit scheme and the sugar tax.  First is health and wellbeing and our role in that.  The second is around waste and the environment.  So, in relation to the container deposit scheme we’ve worked as effectively as we can in collaboration with the New South Wales government to try and ensure that the scheme is as effective and efficient as possible and now that will roll out into the ACT and Queensland later in the year.  So, we understand that the container deposit scheme is a reality.  In relation to sugar tax again obesity is a very important concern for the community, which we understand, and sugar plays a role in that.  The solution to obesity is very complex, one would like to think it’s an easy fix as in a sugar tax but that’s just simply not the case.  I mean as you’ll see consumers are drinking less sugary beverages and have been for some years but the obesity issue has got worse.  So, the causation isn’t there.  So, a tax on sugar beverages I don’t think is the solution to obesity.

Having said that though we understand that we have a role to play in it and are focussed on doing that by providing consumers with choice.  So, there are many no sugar options in beverages that we provide and low sugar options.  We’re reducing sugar in most of our sugar soft drinks, we are providing smaller package sizes and we endeavour to ensure there’s as much information as possible available to consumers about what they’re drinking.  So, I think we are constantly mindful of the role we have to play in assisting consumers with choice and the information.

Now, there’s been a little bit of sniping in the press recently about pay issues at Coke, you did have a 17% protest vote at your recent AGM.  Some of the press coverage suggested a switch of metrics from underlying EPS to statutory without explaining it was the problem.  Did the board miss something there and has the executive bonus system been gamed a little bit at Coke?

So, as a board we’re very confident and comfortable with the decisions we made in relation to remuneration in 2017.  There wasn’t a change between statutory and underlying, we have a principle of using statutory EPS and did that in 2017.  The issue was though, and I accept this, that we did not explain it as well as we could have and we will definitely ensure that we do a better job of that.  I mean, obviously it’s concerning to receive that vote against so we’re going to make sure that we understand all the issues that investors have with remuneration and address them.

It’s also the issue, I think, you’re selling off and leasing back your Perth and Adelaide bottling plants.  I think there will be some investor focus on making sure that the executives don’t get any unexpected windfall or something from that sale and lease back.  Is that something you’re going to watch carefully?

Of course.  So, just to be clear last year there was a sale and lease back of Richlands but what’s important to understand is that the executives have been restructuring the business over time.  Obviously restructuring has costs attached to it and so the management team and the board has understood this and it’s been well-planned, have also considered ways of making as much out of the assets that we have in a planned way.  That was what was involved in the Richlands sale.  So, this is not gaming of the system at all.  But, as you say we have to always ensure that there isn’t a windfall for management out of doing things like this.

Now, just a quick related party transaction question.  So, you’re spending around $800 million a year buying product off the 29% partial parent in Atlanta, TCCC as you called them.  If this was in China shareholders would get a vote on that because it’s a related party transaction but under Australia’s rules because it’s considered ordinary course of business shareholders don’t get to vote and approve on that related party transaction.  How do you assure yourself as Chair that these are appropriate terms when the shareholders are spending $800 million or thereabouts a year giving funds to a related party?

Well, I suppose the first answer to the question is we’re principally a Coca Cola bottler so when you invest in us you understand the business that we’re in, which is bottling Coca Cola and selling and distributing their product.  So, that would be the first.  The second is in relation to related party issues as a board we’ve set up a related party committee which deals with issues and transactions involved with the Coca Cola Company.  So, that comprises only the independent directors.  So, we ensure that appropriate governance is in place.

Now, let’s talk about Westfield.  It’s the end of an era.  I think the scheme for the $32 billion Unibail takeover comes into effect on June 7.  So, you are still Director today but you’re inside your last week.  What was it like sitting on a board with Frank Lowy  and a couple of his boys?  I’ve been pretty scared of criticising Frank at his AGMs over the years, he’s a pretty powerful figure.  Did you ever take him on or tick him off, what was it like sitting in there with a legend who’s also very strong?

Yeah, so it’s just interesting, that persona.  So, in the board meeting he is very interested in everyone’s views.  He’s a very inclusive Chairman.  So, that isn’t the persona at all, it’s quite interesting and a total misnomer about how he certainly operates as the Chairman.  As a director for me it was really an education in how you create shareholder value, it’s an extremely well-run company, operationally excellent, and that is the culture of Westfield but run by visionary individuals.  So, yes it’s been a very interesting experience.

Were you surprised with the 47.5% remuneration strike at the farewell AGM?  Normally it’s meant to be an adulatory farewell ‘Frank, great job’, but the shareholders really lashed out.  It sounded like there were too many big payouts to executives as part of the change of control situation.  Is that a fair summary of the investor concern?

I didn’t speak to investors but I’d imagine that it was about the quantum, yes.  I think the issue was that as part of the agreement with Unibail all rights were accelerated because clearly they did not want to takeover the remuneration schemes that Westfield had because they clearly would not be aligned with Unibail schemes.  So, the result of that acceleration was the quantum of numbers that you saw but yes, I think that would have been the underlying concern for investors.

Now, Westfield will obviously reduce your workload but let’s just briefly cover your workload.  So, you’ve got Chair of Coke, Director of ANZ and then you’re on the Sydney Uni senate, you’re on the Paul Ramsay Foundation, I think you’re Chair of Jarwun, you’re on the board of Jewish Care, another company called Adara.  Are you too busy to continue with all those different roles?  Because it’s a full dance card.

So, I’d say no.  I’m very comfortable with the workload.  I do this full time, it’s my career, and I constantly assess the obligations that I’ve got to make sure that I’ve got enough time to do them.  My priorities are clearly CCA as Chair and ANZ and Westfield until I finish.  I ensure that I can manage those effectively, including anything untoward that might come up.

What about university governance?  So, you had I think three or four years as the pro Vice Chancellor of ANU under Chancellor Gareth Evans, and then you came across more recently and you’ve had the last three years on the University of Sydney senate as one of five external independent directors out of a total senate of 15.  How do you find university governance?  They tend to be very big boards with lots of different stakeholders represented.  Is that the ideal model from what you’ve seen comparing it with public companies and not for profits?

I think university boards have become more and more like corporate boards but obviously with the appropriate representation of teaching staff and also students, I think that’s very important.  I have been fortunate to work with excellent Chancellors at Sydney University, Belinda Hutchinson is the Chancellor, and she does a wonderful job of running a very effective senate and very effective meetings.  So, I know that they’re relatively large governing bodies but I think they’re probably appropriate for the organisations that they’re running.

Just a final reflection, Ilana, what’s your favourite deal that you’ve been involved in with a public company that you think has added value for shareholders and also any corporate regrets you’d care to mention over your non-executive director career?

Well, as you know your favourite deal is always your last one, right.

Westfield?

Yeah, the Unibail deal.  But, I must say the demerger of Westfield to create Westfield Corporation and Centre – I don’t know how you feel about that deal, Stephen, in retrospect…

Yeah, I wasn’t a huge fan at the time.

I know you weren’t at the time but that created huge amounts of shareholder value and I think exemplified really how Frank is a visionary, they can see ten years ahead and have enough guts to actually implement challenging transactions to benefit their shareholders.  So, I would say those two deals would be the ones.

Any regrets?

I don’t have any, and I am sure I must but maybe I’m just too glass half full.  I can’t think of any.

I think you’re 64 now.

Am I?

How much longer can you see yourself being a professional director.  Have you got a good few years in you yet?

Well, tenure obviously is important and you’re not independent after a period of time, so I must admit I haven’t really thought about when the end point will be but there certainly will be one in the medium term and there are lots of other things to do, I embrace change.

Excellent.  Alright, Ilana Atlas, very much appreciate you taking the time to be the fourth female Chair out of 25 Chairs that we’ve interviewed for this series.  We’ll keep working on diversity numbers and very much appreciate your time.

Yeah, I was going to say, there should be more.  Thank you, Stephen.

Thanks Ilana, have a good day.

Okay, bye.

That’s Ilana Atlas, the Chair of Coca Cola Amatil, still a Director of Westfield for another week, Director of ANZ and on many other not for profit boards.  I’m Stephen Mayne, this has been The Constant Investor Chairman interview series.