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Wolseley Switches CEO

2009-06-30 14:44:30

Wolseley WOS (LSE) the distributor of building materials announced its CEO since 2006, Chip Hornsby, would resign immediately. Hornsby was made CEO in 2006. Not long after his ascendance to the top, the company found itself facing the growing housing difficulties particularly its operations in the United States. At the point at which the housing market began to decline, Hornsby initiated a number of strategies to cut overall expenses particularly in the building supply area. Even with these policies in place, the firm saw its share price and profits continue to decline. In Hornsby's place the board has selected Ian Meakins. He was previously chief executive of currency exchange company Travelex. Prior to that he held executive positions with the pharmacist chain Alliance UniChem and drinks maker Diageo. Meakins is an accomplished executive it is difficult to determine if he is a good fit for Wolseley. One can expect some real changes in strategy after he takes over his post and gets situated. Stay tuned.

Recommended Reading - Funds take greater role as activists, The Globe and Mail

2009-06-29 13:46:56

Steve Ladurantaye wrote a piece for Canada's Globe and Mail about the increasing activism associated with Mutual Funds with respect to corporate management.  According to Ladurantaye's piece,

Mutual funds are becoming increasingly aggressive in voting against company management and using annual general meetings to push socially responsible agendas.

“You are seeing a less friendly attitude toward director nominees, for one thing,” said Laura O'Neill, director of law and policy for the Shareholder Association for Research and Education. “It's a relatively positive sign that shows some movement toward a more critical approach to management.”

Don't expect mutual funds to pressure management across the board but we can expect to see increased pressures on management by mutual funds when they determine specific corporate policies are not in their interest.

Recommended Reading - Financials Post Sign of Times: CEO Wanted, Wall Street Journal

2009-06-24 11:32:47

Susanne Craig and Joann S. Lublin wrote a story that appeared in today's Wall Street Journal that examined the dearth of financial CEOs available to come in and run many of our troubled financial companies.  According to the story,

The strain of the credit crisis, curbs on executive compensation and the specter of government scrutiny are making it harder for financial firms to lure chief executives, according to directors, executives and search firms.

"There aren't any highly attractive CEO prospects in the financial-services industry," said Peter D. Crist, head of Crist|Kolder Associates, an executive-search firm in Hinsdale, Ill. "The best players won't risk their careers going to a troubled enterprise."

... One problem is that the financial industry's crisis has shown that some firms simply might be too much for anyone to conquer. Eventually, boards will find new CEOs who are confident enough to give it a try no matter how big the risks. For now, the pickings are slim, said recruiters involved in continuing searches.

I am not quite as sanquine about the prospects for finding new CEOs to run the troubled financial firms as are those referred to in the story e.g., executive search firms, directors and executives.  I agree that finding the right candidates will be challenging but that is always the case.  There are good candidates out there and many are up to the challenge, even if compensation does not meet their initial expectations.  Decide for yourself, check out the story.

Recommended Reading - Who could replace BofA's Ken Lewis?, Deal.com Dealscape

2009-06-23 13:47:41

Dealscape today ran a piece about an IDD story on what Bank of America might do should Ken Lewis get the ax.  The crus of the matter is the bak would turn to its Board of new members for Lewis's replacement.  According to the story,

IDD Magazine is reporting that BofA has a "Plan B" if the board decides to ditch CEO Kenneth Lewis. That Plan B, unsurprisingly, is to replace Lewis with one of the bank's new board members, all of whom have banking experience.

Even a cat only has nine lives, we will just have to wait and see what happens with Lewis.

Recommended Reading - Yahoo: Carol Bartz Live From Stanford Directors’ College, Barron's Tech Trader Dailyblog

2009-06-22 11:54:43

Carol Bartz, the new CEO of Yahoo who has already managed to successfully defy predictions about her appointment to run Yahoo, offers a number of very useful ideas about the role of corporate board directors.  Yesterday Eric Savitz posted a terrific piece on Barron's Tech Trader Daily blog that examined Bartz's Sunday keynote speech at the Stanford Director's College.  Anyone interested in corporate governance or the roles of board members must read the blog piece.