Brierley's move 'sad' say investors

Guinness Peat Group chairman Sir Ron Brierley has made some unpopular calls. Photo / Greg Bowker

Sir Ron Brierley's decision to step down as chairman of Guinness Peat Group has come as no surprise to investors who have battled for a change of governance on the board.

But they say it's a sad situation that a name so synonymous with the firm has had to step back to allow the company to move forward.

GPG released a statement to the stock exchange yesterday saying that it would be Brierley's last day as chairman with his replacement, independent director Mark Johnson, stepping into the role.

Brierley, who will remain a director, has come under fire in the past year over unfulfilled promises to return value to shareholders and for heading a board that did not appear to be listening to its shareholder owners.

New Zealand shareholders strongly opposed plans to split off the Australian assets into a separate business and after a private meeting with Brierley several months ago the company finally agreed to renew its board with four new independents appointed in September and undertake a strategic review.

Tyndall Investment Management's Rickey Ward said Brierley's decision was not unexpected but he was synonymous with the company. "A lot of investors will have backed him, but times have moved on."

Ward said Brierley appeared to have taken on board the level of dissatisfaction from local investors and seen it as a sign that things needed to change.

"As investors we just hope that the personal conflicts that had appeared on the board have now been resolved."

OnePath equity investment manager Mark Brown said it was disappointing the company had come to this point but inevitable given the proposal to split off the Australian business had been so disliked.

Brown said he was glad Brierley would be staying on the board.

"I think it would have been a real loss if we had lost him from the board entirely. But I guess it needs someone with fresh eyes to see the way forward. It's hard to unravel your own empire."

Brown said the company still faced a tough time ahead but the new chairman was well respected and had the support of shareholders.

Sydney-based Johnson said he would have big shoes to fill in the chairman's role.

Since the new directors had come on board the company had made a lot of structural changes to the board.

"We have set up subcommittees of the board and got more formal governance processes in place. Simultaneously we have done a lot of work to understand the underlying businesses."

Johnson said the overall structure of the group was complex. "There's the UK, Australia and New Zealand if you look at Coats - that's in 73 countries."

The company said it would give an update to shareholders on the progress of its strategic review at its preliminary results in February.

Johnson said he didn't know what the company would have to say by February but said it would give shareholders an appraisal of where things were at.

"I would hope it may point in some general direction."

Johnson said he would likely make a visit to New Zealand shareholders at the end of the first quarter of next year and was aware many wanted the company's annual general meeting to be held locally rather than in London. GPG's shares closed flat yesterday on 70c.

Change at the top

Outgoing chairman
* Sir Ron Brierley
* Aged 73.
* Joined the board of GPG in 1990.
* Before that he ran Brierley Investments for 39 years.

Incoming chairman
* Mark Johnson
* Aged 69
* Extensive experience in investment banking.
* Chairman of AGL Energy and director of Westfield Group. Was deputy chairman of Macquarie Bank from 2000 to 2007.