Austrade buys into a most undiplomatic mess with CEO’s ‘brutal’ departure

When Austrade’s acting chief executive Tim Beresford took questions after his first (online) “town hall” meeting three weeks ago, the first was whether he could give the organisation’s 500 or so staff any further information about why Stephanie Fahey suddenly “quit” as chief executive on June 12.

He demurred, claiming, in effect, he had been the last to know. Not everyone at Austrade believes him.

Fahey — who was brought in from top four consultancy Ernst & Young’s (EY) education division in 2017 to run Australia’s government trade marketing arm after a distinguished academic career — was the first woman in the role and won the gig on the back of a promise to overhaul the fusty bureaucratic agency and drag it into the 21^st century.

Her execution, when it came, was swift and brutal. Insiders said it happened pretty much overnight although it had been clear for years, her supporters say, that there were forces inside the organisation determined to run her out.

It was announced on June 12 and, although she officially finished up a month later, she was out the door within a week.

“This is not a step I have taken lightly,” Fahey wrote in her June 12 note to staff. “I am very proud of the progress we have made at Austrade. Austrade faces considerable challenges in the months and years ahead. In a future capacity, I look forward to working with my successor, and the impressive Austrade team, as you tackle these challenges.” 

Insiders say she was divisive

The reasons for Fahey’s demise appear varied and mired in the typical opacity of bureaucratic jostling and political considerations, but what is clear after talking to a range of Austrade insiders is that she was a divisive figure.

Fahey’s supporters say this was only to be expected for a chief executive who was determined to change an outdated organisation with multiple layers of very well-paid staffers used to the same or better conditions as those in offshore diplomat postings.

Indeed, there has long been dissent inside diplomatic circles about how trade-promoting colleagues — often seen as carpet-strollers and glad-handers — are remunerated.

People close to Fahey claim that Austrade is a particularly misogynistic organisation full of bureaucratic types who have never worked in the real world.

It should, they say, have been an arm of government that needed to pay particular heed to last year’s public service review report released in December, which spelled out how the public service needed private sector expertise and the danger the public sector faced by not keeping in step with contemporary business practices. 

Insiders say the “old guard” of career public servants loathed Fahey and worked against her from the outset, fearful their jobs would disappear.

But her critics claim she was not delivering on her signature modernisation projects and that her plans for a digital platform for Austrade were at odds with the realities of the need for face-to-face meetings and contact in the trade world.

Bringing in her old firm a misstep

In keeping with the disturbing trend of government agencies employing increasing numbers of consultants — and unsurprising for a former consultant herself — Fahey brought a range of consultants in, drawing the ire of the public service lifers.

The arguments in favour of consultants in an environment where a step change overhaul is needed (and most people who have ever dealt with Austrade know this is well overdue) are clear. But Fahey certainly made a misstep when she brought in her old firm EY.

One interesting flow-on from what appears very much to have been a summary execution is how quickly Trade Minister Simon Birmingham — who is in the frame to take the reins at Finance when Mathias Cormann leaves politics later this year — will move to appoint a permanent successor and leave his stamp on the organisation.

A search is under way for Fahey’s replacement. Austrade would not be drawn on her departure except to say a “recruitment agency will be appointed shortly to run this selection process”.

Crikey understands Department of Foreign Affairs and Trade (DFAT) and ministerial representatives have been appointed to a selection panel.

Fahey’s departure, by many accounts, has left the organisation — already reeling from COVID-19 — in chaos. 

Beresford is keen to make his role permanent and is “aggressively positioning” himself, yet his initial appearance left staff unimpressed; he has a reputation for enjoying “town hall”-type meetings where he is prone to verbosity. He will have to move nimbly to differentiate himself from Fahey who brought him on as her number two.

He is also understood to be seen as close to Labor and having had “up and down relationships” with Fahey’s predecessors, Bruce Gosper and Peter Grey, leaving Austrade in 2016 for 18 months before returning.

Still, this is the public service and anything is possible in terms of people distancing themselves from previous loyalties. But as a few keen observers have noted, in trying times for Austrade — and they have been legion over the decades — a deputy secretary of DFAT is often brought in to steady the ship.

There is a logical candidate in the wings in the form of former free trade agreement negotiator Jan Adams, who most recently served as ambassador to China.

With the increasingly fraught Chinese relationship, she might be the right choice for a number of reasons — not least of which is that she is also a woman, albeit one more likely to hew to the rules of the game.