New Zealand shareholders are claiming a victory for investors after Sir Ron Brierley's embattled investment company Guinness Peat Group yesterday said it would appoint four new independent directors.
After months of talks between the board of GPG, local fund managers and the Shareholders Association, the stalemate broke yesterday with the company conceding to a massive reworking of its board.
Ron Langley, an independent director considered to be a close friend of Brierley, has resigned and will be replaced by three New Zealand independents and an Australian, bringing the board to seven.
It will be the first time in the firm's more than 20-year history that the board has had more independent directors than share-owning executive directors.
Shareholders Association chairman John Hawkins said he was delighted with the outcome.
"The company will now have a majority of independent directors we are comfortable with."
He said the way New Zealand investors had worked together to get the change was a "watershed event" and served as a wake-up call to directors to remember that they were answerable to shareholders.
The association and a group representing about 10 institutional investors met Brierley in Auckland last month to put forward their concerns about the governance of the company.
The board was given a proposal and a deadline to come back to the investors with the possible threat of a special meeting being called to remove directors if changes were not made.
Shareholders became concerned about GPG after it announced plans to split off its Australian business into a separately listed company in June.
Brierley had proposed to return value to investors this year and shareholders did not believe the proposal would do that.
Former director Tony Gibbs, the only New Zealand-based director at the time, was removed from the board at the end of June after he publicly spoke out against the plans.
Yesterday Gibbs, who remains a significant shareholder, said the appointment of the independent directors was a step in the right direction for the company.
"I wish them all the best. I am sure they will be aware that investors want a cheque in the mail."
Gibbs said the board changes would be a change of pace for the existing executive directors.
"Hopefully they will all work well together. I think it will be good for the company."
GPG chairman Brierley said in a statement to the exchange the new appointments would add depth and strength to the board.
The company would now establish an independent subcommittee of the board made up of the four new directors to "evaluate all available strategic options".
"The sole focus of the GPG board remains maximising value for shareholders," he said.
But investors did not believe further changes would happen quickly.
BT Funds Management's Matthew Goodson said he expected the new directors to take a while to come to a decision on the company although he expected them to have done a lot of due diligence before taking on the roles.
"The degree of urgency is more about investor impatience.
"They don't need to make an urgent decision."
Tyndall Investment's Rickey Ward said it would take a while for the new directors to get their feet under the table.
Hawkins hoped the existing executive directors would work in a co-operative manner with the new directors.
He noted that Gary Weiss, the man seen as being behind the proposal to split off the Australian business, was up for re-election at the next annual general meeting in May.
GPG shares closed up 1c to 67c yesterday.
ON THE BOARD
* Mike Allen
* Rob Campbell
* Mark Johnson
* Gavin Walker
OFF THE BOARD
* Ron Langley