Reference no: EM132705811

On the 26th October 2016 four people were killed in a tragic accident on the Thunder River Rapids ride at Dreamworld on the Gold Coast. The Dreamworld theme park Australia's biggest theme park is part of the Ardent Leisure Group's assets. In 2014, Dreamworld was voted Australia's third most popular tourist attraction in the National Tourism Awards.

At the helm of this disaster is the company's CEO Deborah Thomas and chairman Neil Balnaves- the two high-profiled media figures boasting more than 60 years' experience between them. The fallout from the country's worst theme park incident since 1979 has been a public relations disaster.

-Deborah Thomas, Neil Balnaves face condemnation from victims' families

-Ms Thomas announces she would donate her $167,500 cash bonus to charity

-Horrific accident will not impact company's expansion into US, Chairman Mr Balnaves says Ardent chief executive Deborah Thomas is an iconic women's magazine editor, and its chairman Neil Balnaves is a former media-executive-turned-businessmen and art philanthropist.
Both are facing condemnation from the victims' families and the public over their response to the tragedy. The CEO has also been lambasted for failing to contact the victims' families.

The theme park deaths came as Ardent, which owns Dreamworld, WhiteWater World, Skypoint, AMF bowling and GoodLife Health Clubs, planned to shift its business focus away from Australia to its growing entertainment empire in the United States. Ardent went ahead with its scheduled annual general meeting to discuss the tragedy and to sign off on executive bonuses.Company Chairman Mr Balnaves has defended the timing of the AGM, saying the company was bound by law to hold the meeting Head of Ardent Leisure Ms Thomas faced a barrage of criticism over the announcement she would still receive a long and medium term performance bonus of up to $840,000 despite this week's fatal accident at the Gold Coast theme park. The decade-long editor of Australian Women's Weekly and former editor in chief of CLEO and ELLE magazines took on the top job with Ardent in March last year. "I would like to say that if I hadn't handled it as well as I could, we thought we were doing the right things in terms of the way we approached it through the police," she told reporters. At service for staff at the Gold Coast theme park today she gave an emotional apology.

Ms Thomas said Ardent's support would include counsellors and immediate financial assistance. Company Chairman Neil Balnaves also said the theme park's earnings would take a substantial hit in the current financial year, following the accident that killed four people. The chairman also went through his planned retirement at the meeting, but promised he would not just "disappear" and would be available to consult the board as it dealt with the accident.Although initially Dreamworld had planned to reopen its doors within a few days of the tragedy the park still remains closed as of today. The company's theme park division, which encompasses Dreamworld and WhiteWater World,generates about one-third of Ardent's total earnings. This is the first major tragedy for the leisure group but Mr Balnaves said the horrific accident would not impact the company's expansion into the US. The water-ride tragedy at Dreamworld will likely put off visitors until at least 2018, Balnaves told shareholders at Ardent's annual general meeting in Sydney. Chief Executive Officer Deborah Thomas said she expected a "significant impact" on earnings this year from lost ticket sales. Their dire prediction comes after a stream of recent allegations by visitors that rides at the park were broken, faulty or in bad repair. Documents have now emerged detailing more than 12 complaints, injury reports and maintenance concerns from 2010 to 2016, including a report the Thunder River Rapids ride was "not fit for service." "The management of facilities like theme parks and leisure centres have a duty of care to protect and ensure the safety of all visitors. If this duty is breached and a person is injured, they may have a right to compensation.

"We understand that Workplace Health and Safety is currently investigating the tragedy and we will soon understand more about how and why this happened. If these investigations show that the theme park failed to ensure that all facilities were properly-maintained and safe, this may pave the way for those affected to take legal action. "These claims could involve compensation for the pain and suffering endured by those who have lost loved ones or who witnessed the tragedy. If the trauma they've experienced means that they need additional support and care or leaves them unable to go back to work, these things could also form part of the claim. If a family has lost a main breadwinner who they depended on financially, avenues may be available for them to be compensated for the loss of income to the family." Brisbane lawyer Alison Barrett, from Maurice Blackburn, told news.com.au that those found responsible could face jail terms and hefty fines.

"Dreamworld can be prosecuted, if they are found guilty, for recklessly endangering the health of a person, and that could carry a fine of $3 million. "The directors could be found personally responsible and be given up to five years in jail and fines of up to $600,000.

"When there's a catastrophic event like this, it generally doesn't just happen spontaneously. It's not an act of God. The investigation generally reveals poor health and safety and a lax attitude to training, repairs - and cost-cutting." The board have approached their business advisor, Company Matters, for assistance in formulating a strategy for a review of their board structure and governance activities in light of the recent tragedy.

Questions:

-Should the board and its Chairman, Neil Balnaves, be held equally responsible along with the CEO Deborah Thomas?

-Review the bonus scheme and remuneration strategies of the executive team (CFO and CEO) and is this likely to encourage them to cut costs.

-With regard to the disaster, do you think the Ardent CEO and board communicated and behaved appropriately with stakeholders following the disaster?

-Review the company's adherence to the ASX Corporate Governance guidelines.

-What measures do you think the Ardent Leisure board should implement to mitigate the chances of such a catastrophic accident happening in the future?