On Monday, the announcement of the mass resignation of its independent directors – over irreconcilable differences with White over his continuing role at the group – sent the company’s share price plunging, even though the exodus all but assured White’s control of the group, ending market fears that the founder of the ASX’s dominant tech company could be pushed out.
The resignations are effective as of today, after the parting directors signed off on the company’s half-year accounts.
Their exodus will leave the board in the hands of three directors with long-term loyalties to White, including Mike Gregg, who rejoins the board today and will oversee the investigation into allegations against White.
The WiseTech founder has been fending off damning allegations of inappropriate behaviour for months. One woman dubbed him the “LinkedIn Lecher” due to his alleged propensity to approach women via the network to offer business advice in return for sex. White has denied the claims.
WiseTech said in its earnings release that an update on the status of a report into White’s conduct would be provided to the market next month.
WiseTech said the resignations have left it in breach of ASX listing rules requiring its audit and risk committee have at least three non-executive directors. The company said it intends to recruit additional non-executive directors as soon as practicable.
‘The magic and the brains’
Analyst commentary after the board exodus highlighted that – whatever the issues with his personal behaviour – investors’ main concern was that White retains control of the spectacularly successful business he founded.
E&P analyst Paul Mason said the directors’ departure probably resolves that fear, albeit with the urgent need to bring on quite a number of new independent directors.
“In terms of management and board, we believe there were great concerns in the market about whether Richard White was being pushed out under pressure from the media and maybe the board,” Mason said.
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Revenue downgrades both at the company’s annual shareholder meeting in November and this week – attributed to slips in the product release schedule – were blamed on White’s scandalous distractions, but at the same time confirmed for many his indispensability to the business.
But in an interview with Bloomberg on Tuesday, corporate governance expert Helen Bird said the catastrophic board purge creates problems for investors.
“If you’re an investor in (WiseTech) – whether a large investor, like an institution, or a retail investor – you should look at this with some horror because there have been clear issues going on there, and he’s taking control,” she said.
While she describes White as the “magic and the brains” behind WiseTech’s success, she said no fund manager was going to be happy with what’s happening. “I wouldn’t say this is over by any stretch.”
White and other WiseTech executives assured investors during the earnings conference call that there have been no issues with customers.
“(They) don’t think about this market or these governance issues in Australia,” White said. “They think about what is right for them, for their product, for their business, and for the long term of WiseTech as it affects that business … time and time again, that comes across very clearly.”
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