Some of our largest companies are without permanent CEOs after an executive exodus. Video / NZ Herald / Cameron Pitney / Getty
It’s tough at the top of some of our largest listed companies, operating without permanently appointed leaders after boards cleared the decks.
Fletcher Building, Ryman Healthcare and The Warehouse Group were all being led by interim appointments after their former chief executives departed this year related to poor company performance.
The trio had some of the worst performing share prices on the New Zealand Stock Exchange in the year to date.
“There’s been more scrutiny from shareholders, which is fair I think, we do need to hold management to account,” Craigs Investment Partners portfolio manager Mohandeep Singh told Markets with Madison.
His research showed half of the companies listed on the NZX Top 50 index had a change in their chief executive since 2020.
The average tenure of a chief executive here was five to six years, Singh said.
“Every year we lose 10, maybe five, CEOs. It feels like it’s been a bit more of a wave [in 2024].”
“And if you look at the companies that have lost CEOs, it has been the ones that have been under a little bit of pressure. That’s probably putting it a bit lightly, isn’t it.”
Craigs Investment Partners portfolio manager Mohandeep Singh says there's been a wave of executive departures at listed companies in 2024, largely due to poor performance. Photo / Cameron Pitney
Singh said the recent changes at the top of a handful of companies likely reflected the economic cycle and the trouble some corporates found themselves in after taking on debt in the low-interest-rate era.
“Look at where the economy’s gone ... demand is down after a wave of euphoria.
“It’s been a tough place to be a CEO.
“And there’s been more scrutiny from shareholders, which is fair I think, we do need to hold management to account.”
Chairman Dean Hamilton has stepped into the executive role at Ryman Healthcare while its search for a permanent replacement continues. Photo / Michael Craig
Boards had become more critical too, he said.
“You’re seeing those boards and those chair people put a bit more acid on their management teams to say, ‘Hey, we need to perform, otherwise we all feel the pinch’.”
An example of that was Ryman Healthcare’s executive chairman Dean Hamilton - who’d taken on the role of chief executive temporarily while its permanent search continued - and was also on the board of The Warehouse Group.
Last month he told Markets with Madison that the case of disappearing CEOs was interesting.
“I think [it’s caused by] a combination of boards being stronger ... And there’s also investor pressure as well, which is rightful,” Hamilton said in this interview.
Ultimately, Singh said it was positive to see changes happening across companies, and investors should feel optimistic about it.
“As a shareholder personally and obviously here at Craigs [Investment Partners], we see that as positive, the change is a good thing. We see that boards are not scared to make the hard decisions.”
But what landed us here in the first place, and how has succession planning not panned out?
Watch Mohandeep Singh discuss the state of leadership across our major companies in today’s episode of Markets with Madison above.
Get investment insights from executives and experts on Markets with Madison every Monday and Friday here on the NZ Herald, on YouTube and wherever you get your podcasts.
Sponsored by CMC Markets.
Disclaimer: The information provided in this programme is of a general nature, and is not intended to be personalised financial advice.
We encourage you to seek appropriate advice from a qualified professional to suit your individual circumstances. Madison Reidy is host and executive producer of the NZ Herald’s investment show Markets with Madison. She joined the Herald in 2022 after working in investment and has covered business and economics for television and radio broadcasters.
