ZB

Gib crisis: Call for Fletcher chairman to resign

Author
Anne Gibson, NZ Herald,
Publish Date
Mon, 20 Jun 2022, 2:24pm
Bruce Hassall is Fletcher's chairman. Photo / supplied
Bruce Hassall is Fletcher's chairman. Photo / supplied

Gib crisis: Call for Fletcher chairman to resign

Author
Anne Gibson, NZ Herald,
Publish Date
Mon, 20 Jun 2022, 2:24pm

Fletcher Building critics have called for the company's chairman Bruce Hassall to resign, directors to put themselves up for re-election and a review of the company's culture and conduct.

NZ Shareholders Association chief executive Oliver Mander and KiwiSaver provider Simplicity (NZ) managing director Sam Stubbs have released a copy of a strongly-worded letter they have just sent to the company after an unsuccessful meeting on Friday.

They called for a board overhaul due to the Gib crisis and said Hassall was one of this country's highest-paid chairmen, getting more than $344,000 in fees annually.

"We call for the immediate resignation of the current chair. We call for the entire board to make themselves eligible for re-election at the company's annual shareholders' meeting later in 2022.

"We call for an independent culture and conduct review at Fletcher Building, with a focus on how your operating models affect your perspective towards customers, shareholders and other stakeholders.

"We expect the outcomes to be made public. We call for an independent risk and assurance review of Fletcher's risk identification, management and monitoring processes, at both a management and governance level. Again, we expect the report to be made public," the letter said.

In response to criticism, Fletcher chief executive Ross Taylor has cited a number of reasons behind the Gib shortage including hoarders.

He said last week he didn't want to over-emphasise this but hoarding was certainly a contributor to Winstone Wallboard's Gib shortage.

"Since the start of 2022, stockpiling has amounted to around 10 to 20 per cent of our present production volumes. It's part of the problem, not the whole problem."

Taylor was responding to the anger expressed against subsidiary Winstone Wallboards' inability to supply the amount of Gib needed.

Customers are turning to imports and shortages are blamed for financial failures.

Simplicity Living is importing Thai plasterboard and says it has banned Gib, and Naylor Love is buying Australian board.

Taylor said the business he runs was doing all it could, including building the new $400 million mill.

"We're producing enough wallboard to cover 50,000 houses a year," Taylor told the Herald via Zoom from Fletcher's head office at Penrose.

"Since early this year, people were storing wallboard. Plasterboard gets used, and pallets come back. We're not getting enough pallets back so that suggests there is wallboard out there," Taylor said.

New Zealand is only building 35,000 to 40,000 new homes a year, despite consents running at more than 50,000, he said.

The letter released today accused Fletcher's board of being light on relevant building sector experience.

Fletcher Building has, and must maintain, a social licence to operate, that said.

"It has an obligation to customers and stakeholders to maintain supply and competitive pricing to ensure the overall health of the building sector. It is failing in this, and we question the sustainability of the business model to deliver long-term performance for the company.

"We believe the conduct of the company has now created significant regulatory risk and a possible customer revolt. This crisis has highlighted what we see as systemic failures within the company which are ultimately the responsibility of the Fletcher Building board," Mander and Stubbs wrote.

Comment has been sought from Fletcher in response to the letter.