Fletcher Building chief executive Ross Taylor. Photo / File
Does anyone at Fletcher Building really know what's going on at Fletcher Building?
Sometimes you have to wonder as the company lurches from one bad news day to the next.
The financial year to date hasn't been great, even when you consider where the company has come from and the disastrous write-downs stemming from the Building + Interiors division.
Fletcher's announcement this week that its first half earnings are expected to be down 10 per cent and the guidance for the year ahead that was well below market expectations took the market by surprise.
Hence the torrid trading day on Tuesday when more than $500 million was wiped off the company's market capitalisation.
But it wasn't so much the numbers that spooked the market. It was the realisation that the management team led by chief executive Ross Taylor have had a key plank of their turnaround plan taken away from them.
The profit warning was mainly driven by the sharp residential slowdown in Australia which Fletcher cited as "emerging" challenging conditions for the company.
This is a key driver of the Australian business that Taylor has said was key to Fletcher's growth plan, and the big hope was to push up margins to be more comparable to this side of the Tasman.
"We have to drive Australia," Taylor said in April.
Yet the headwinds brewing from the Australian residential market have been apparent for some time now and while there were other factors behind the downgrade, such as an outage at the company's Golden Bay cement plant, the board and management should have seen this coming.
One issue Fletcher has highlighted in the past has been an apparent lack of quality information flowing through to the board.
This can only happen when the information flow to management is also good.
And if it's not good then it's the board's job to find out why and make sure the executive fixes the problem.
That's why you need directors on the board with sufficient industry experience so they can ask the right questions, demand the real data and probe the answers.
People who have sound general business acumen can do this up to a point but only industry specific experience can really pinpoint the relevant risks and know the right questions to ask.
For whatever reason, that hasn't happened at Fletcher Building. Perhaps it's because many boards in New Zealand appear to be constructed by shoulder tapping and the club mentality commonly referred to as the old boy's network.
Or maybe it's simply a lack of willing participants.
Shareholders were right to question where the industry expertise lies within the latest board appointments but they voted in favour of them, perhaps in recognition of that fact that Fletcher needs a period of stability.
Of the five new directors brought on since the B+I shambles, only Martin Brydon has lengthy industry specific experience.
Brydon has more than 40 years' experience in the Australian building products sector, most recently as managing director of Adelaide Brighton.
The other new directors - Doug McKay, Barbara Chapman, Rob MacDonald and Cathy Quinn - are highly regarded, but simply don't have the same experience in terms of Fletcher's core business activities.
These appointments led the Shareholders Association to say the company had squandered an opportunity to appoint more directors with knowledge of the industry.
It's always easy looking back in hindsight but someone at Fletcher is going to have to step up and make some hard decisions about how to get the business back on track.
To do so will require making sure everyone from senior management to staff on the project sites to those in the boardroom know exactly what the plan is and how to execute it.
That's the challenge facing chairman Bruce Hassell and the new-look board.