Clayton’s used be be the drink alcoholics ordered to cloak their addiction. Now its an apt decscription of the latest moves from James Hardie and its tainted board.
Out they go, sideways. Who? The two ‘Prime Suspects’ named by David Jackson QC as CEO Peter Macdonald and Chief Financial Officer, Peter Shafron. Gone, but not gone or forgotten as the James Hardie board adopts a course of action that is cynical, but doesn’t trigger the possibility of a nasty wrongful dismissal court case, or involve the company in a multi-million dollar payout to either executive, something that would generate more bad publicity.
And the board survives. You can’t help being cynical about the way the board of James Hardie is protecting its collective behind while doing all the obvious ‘right’ things to meet the PR requirements in the wake of the flawed Jackson report on Hardie’s handling of its asbestos liabilities.
Why flawed? Because it is becoming apparent that he had little or no understanding of corporate governance and the fact that in every corporate structure it is the board that drives events in a company, or allows management to drive them.
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And so to in James Hardie, where, despite all the nasty comments about Peter Macdonald, it was the board that signed off on them. And if it didn’t, it is more culpable. But David Jackson QC seems not to have placed much importance on that.
For now it’s the announcements from Hardie about the ‘standing aside’ of both Macdonald and Shafron. And a statement from Macdonald. No confession, promising “vigorously defend” himself “against allegations made by Commissioner Jackson at the appropriate time and in the proper forum”. No admission of any culpability.
A Clayton’s outcome for all concerned. It will quieten the dogs barking for blood on the Hardie’s board. keeps the two executives happy, on the payroll and well away from harm in the form of nasty media or victims group, and helps boost the board’s damage control policy.
Slick, cynical, but hopeful not a sign of future action from Hardie and an attempt to slither away from its responsibilities. After all, Meredith, you’ve said so many mea culpas and ‘sorry’ so many times some less cynical souls believed you!
But Pete Macdonald isn’t so much as standing aside, as side-stepping or swerving. In the name of “business continuity” Mr Macdonald “has agreed to be responsible for the business operations of James Hardie”.
“He will be based in the United States”. As he is now. So for all intents and purposes there is no effective change in Mr Macdonald’s role at James Hardie. He just won’t have the CEO’s title. Some ‘standing aside’, and gets wrapped in cotton wool in so far as the media and public scrutiny is involved.
No having an upset Mr MacDonald on the unemployment line, bitter and ready to dump all over his fellow board members and advisers!
Likewise Mr Sahfron. No CFO role but “it is planned that he will undertake a number of projects for the company, outside the CFO’s function in both the United States and the Netherlands.”
Ahh, so that’s it. Relieve them of the titles and the roles, but still keep them doing what they were effectively doing, but outside Australia. Will they have to be extradited?
Meanwhile today a report on the damage all the silly calls for boycotts is having on Hardie to the benefit of CSR in particular, a
competitor, but one that faced up to its asbestos responsibilities some time ago. The story, in today’sThe Australian should be a reminder to the fools who have called for boycotts, such as Iron Mark Latham, NSW Premier Bobbie Carr and some of his counterparts (Mike Rann in South Australia) that if Hardie starts losing sales and earnings, no matter how small, then the board may be inclined to dig in its heels and stonewall compensation.
Some of the drop off in business also represents a reaction by some customers to the company’s handling of its claims. That’s another example of the dangers in the approach adopted by Hardie up till July when the company started offering a deal. Then, a few weeks later, chairman Alan McGregor went (for reasons of ill health) and ‘Sorry’ Meredith Hellicar was installed as chairman. McGregor was also part of the Reid family by marriage. He was married to one of the grand daughters of the co-founder, Andrew Reid, as revealed on Business Sunday last Sunday.