Latest / Best of Business / Oliver Mander: NZ Shareholders Association CEO on Fletcher Building disappointing shareholders at recent AGM

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Oliver Mander: NZ Shareholders Association CEO on Fletcher Building disappointing shareholders at recent AGM · Best of Business

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  Speaker 2: Fletcher Building's chief executive and board faced some pretty unhappy
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  Speaker 2: shareholders today at the company's and your General Meeting. The
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  Speaker 2: new chief executive, Andrew Reading, had to deliver more bad news,
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  Speaker 2: if you can believe it, announcing that revenue was down
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  Speaker 2: twelve percent in September compared to a year ago and
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  Speaker 2: gross margins were under pressure. Oliver Amanda is the chief
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  Speaker 2: executive of the Shareholders Association and he was actually at
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  Speaker 2: the AGM today.
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  Speaker 3: Hey Oliver, Hi, Heather, how are you very well? Thank you?
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  Speaker 2: Although, jeez, when is this bad news going to end?
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  Speaker 3: Well? Shareholders of Fletcher Building really hope it ends very soon.
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  Speaker 2: Do you expect that it will end soon?
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  Speaker 3: Though?
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  Speaker 2: Hope and expectation are two completely different things.
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  Speaker 3: They completely are. And look, that was one of the
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  Speaker 3: questions that I did ask today. Look, I think the
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  Speaker 3: thing that really still out at the meeting for me
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  Speaker 3: was the fact that you the people on the on
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  Speaker 3: the podium today, they were a very humble group of people,
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  Speaker 3: and that's the sort of humility that we have not
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  Speaker 3: seen in a flectual building board for a very long time.
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  Speaker 2: How did they demonstrate their humility?
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  Speaker 3: I think they they were very prepared to listen to
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  Speaker 3: what shareholders had to say. They allowed, you know, the
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  Speaker 3: questions that were being asked were really quite authentic in
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  Speaker 3: terms of what was coming from the floor and the
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  Speaker 3: impact that the that the company's performance has had on
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  Speaker 3: shareholders in terms of their own returns and expectations. And
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  Speaker 3: the company was very clear about taking accountability for that.
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  Speaker 3: Board members, individual board members are very clear about taking
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  Speaker 3: accountability for that. Yeah, we know from what we wrote
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  Speaker 3: back in February that since February, the board has taken
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  Speaker 3: significant steps to address many of the kids and the
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  Speaker 3: concerns that we're raised, and that does include the fact
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  Speaker 3: that half the board is now no longer there.
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  Speaker 2: Do you think accountability is part of the reason why
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  Speaker 2: Barbara Chapman is announced she's going to resign as a director.
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  Speaker 3: I think that is a really could question, Heather, That's
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  Speaker 3: possibly it, but also it's Fletcher Building has been a
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  Speaker 3: notoriously difficult company to govern for some time. I don't
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  Speaker 3: think Chapman ever put herself forward as a long term
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  Speaker 3: chair for the organization I think the board has listened
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  Speaker 3: to shareholders in terms of seeking out experienced people in
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  Speaker 3: the building products industry or building materials background that are
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  Speaker 3: probably much more suited to that board. Any board needs
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  Speaker 3: a balance of skills to govern itself effectively. That's very true.
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  Speaker 3: But also when things not balanced, things don't go well.
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  Speaker 3: And that was a point that was made by a
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  Speaker 3: shareholders today as well.
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  Speaker 2: You must know the new chief executive because he was
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  Speaker 2: obviously the chair at the Shareholders Association for Ages.
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  Speaker 3: Yeah, yes, so I know Andrew reading very well. Until
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  Speaker 3: August the twenty second, of course he was my chair here,
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  Speaker 3: so that's right.
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  Speaker 2: And tell me about him. Has he got the chops
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  Speaker 2: to turn this thing around?
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  Speaker 3: Well, we would knew that, Andrew. He knew Fletchers when
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  Speaker 3: it was good, way back in two thousand and six
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  Speaker 3: when he worked there, and he certainly comes from good
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  Speaker 3: pedigree at that time at a time and the company
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  Speaker 3: was high performing at a time when look, he was
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  Speaker 3: one of the people been running for the top job
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  Speaker 3: at that time. So knowing what the company was like
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  Speaker 3: when it's good, balanced with a very heavy dose of
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  Speaker 3: external perspective, and did to say his own commentary on
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  Speaker 3: Fletcher Building, dating from way before I got here. Look,
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  Speaker 3: I think that does provide the new broom that shareholders
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  Speaker 3: have been looking for. And what's really interesting, I mean,
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  Speaker 3: since he's been there in the two short months since
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  Speaker 3: he hasn't ounced the strategic review of the portfolio of
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  Speaker 3: businesses that Fletcher holds. We think that's a really critical
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  Speaker 3: step because actually that's ultimately about making sure that the
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  Speaker 3: company allocates capital and the right way allocat's capital into
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  Speaker 3: the businesses that can provide the highest return for shareholders
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  Speaker 3: going forward. And you know, he's got a very focused
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  Speaker 3: planned would seem focused on cost reduction, cash management, capital alvation,
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  Speaker 3: closing up the legacy issues that they've had, as well
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  Speaker 3: as that strategic review. So all that sounds really promising
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  Speaker 3: and well hopeful for shareholders to use that terrible word.
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  Speaker 3: And look, we would hope he's being supported by a
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  Speaker 3: board that can give him the support that he needs
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  Speaker 3: to undertake his work.
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  Speaker 2: Yeah, fair point, Oliver, Thanks very much, Oliver Man, the
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  Speaker 2: Chief executive of the Shareholders Association. Gee's tough times at
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  Speaker 2: Fletcher eight.
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