Parting shots fired by outgoing chairman, Tony Hartnell, have been labelled “sour grapes” by KAZ Group founder, Peter Kazacos.
Hartnell and fellow independent directors, Michael Lillicrap and Murray Wells, resigned from the board of the ASX-listed services outfit recently following an ongoing row concerning the process of appointing a new chief executive officer (CEO).
But Hartnell, who had been on the board for more than three years, also raised concerns about corporate governance in his resignation letter, claiming there were problems with lines of communication between the board and company executives. The letter was leaked to the Australian Financial Review.
“I am a strong believer in the principles of corporate governance requiring an independent Board,” Hartnell wrote to Kazacos. “The Board as you would have it, in my view, will become introspective, retrospective and, increasingly, an apologist for a lack of vitality.”
Kazacos said the letter was sour grapes, should not have been published and was, in itself, a violation of the corporate governance issues that Hartnell was raising. With regard to the search for a new CEO, Kazacos said two camps of thinking had formulated during recent months.
“The executive directors and I saw no need for a knee-jerk reaction because the company was travelling well,” he said. “The independent directors thought change would be good and wanted to bring someone in.
“I didn’t think that was in the best interests of the company so I asked them to resign.”
The disagreement leaves KAZ looking for three new independent directors, including a chairman, and back at square one in the search for the right person to take the CEO reigns from Kazacos. Prior to the fallout, interviews had already taken place following the creation of a shortlist.
But Kazacos remained adamant that he was in no rush to hand over control and said he would prefer to appoint a chief operating officer (COO) and promote that person into the CEO role if and when he had established confidence in their ability to handle it.
For more on this story, see this week's ARN.