It hasn’t taken long for ASIC’s broad-brushed attack on the former James Hardie board to yield some scalps – three directors walked the plank this morning, led by besieged chairman Meredith Hellicar.

This morning’s announcement helped propel James Hardie shares 10c higher to a near-record high of $10.10.

The departures of Hellicar, her fellow long-term director and former Brambles finance boss Michael Brown and American Michael Gillfillan, who only joined the board in September 2001, draws a line in the sand. The board now includes only one Australian, Telstra chairman and Reserve Bank director Donald McGauchie, and no-one who signed off on that bodgy press release in early 2001 which claimed the asbestos trust was fully funded.

Deputy chairman and US citizen John Barr, a former CEO of John Laws’s favourite oil company Valvoline, has taken over as acting chairman and McGauchie has stepped up to be acting deputy chairman. The hunt is on for at least two more US-based directors but most of the remaining half dozen are well-qualified cleanskins.

The James Hardie board requested that the three remain but each has agreed that this would present an “awkward” conflict of interest as they individually fight the ASIC charges and the company itself also prepares a defence.

As the dominoes continue to tumble it will be interesting to see what happens on other boards across the country. Peter Willcox stood aside as chairman of the CSIRO last week but there is no sign that Hellicar is planning to do the same at AMP.

It is clear that many of the directors are shocked that ASIC decided to go the entire board. Hellicar would not have enjoyed being “papped” by The Australian for a front page picture in her civvies at home last week and talk amongst her friends in Mosman is that she is planning to spend more time with her husband living in the south of France.

The board is certainly not walking away from Hellicar if these words from John Barr are any indication:

Meredith Hellicar worked extremely hard, at great personal cost, to gain the equitable conclusion that we have just reached for all stakeholders and we owe her a debt of gratitude for that.

Hellicar says she is “immensely proud” of the settlement but the corporate plod has clearly decided the board can’t buy itself out of trouble.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey