(Bloomberg) — WiseTech Global Ltd.’s founder and largest shareholder Richard White appears to have triumphed in a high-level power dispute after almost every board member quit in a disagreement over the billionaire’s role at the company. The shares slumped.
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Four of WiseTech’s six directors, including Chairman Richard Dammery, will leave on Feb. 26, the company said Monday. The resignations follow “intractable differences in the board and differing views” around White’s position.
The bombshell announcement, almost unheard of in corporate Australia, cements White’s influence at the freight-software company he founded and led for three decades.
WiseTech stock tumbled as much as 23% in Sydney as the company also said revenue would be at the bottom of the guided range because of product delays caused by doubts abouts White’s role. The stock was down 18% at A$99.75 at 10:24 a.m. local time, valuing the business at A$33 billion ($21 billion).
White was forced to step down as chief executive officer in October after a string of allegations of misconduct, sparking a board review of governance and behavioral standards, and putting his future in jeopardy. Four months on, the board has disintegrated and White is back at the top of the business.
“For shareholders, there was tension between keeping talent and corporate governance issues,” said Matthew Haupt, portfolio manager at Wilson Asset Management in Sydney, who holds WiseTech shares. “Talent has won the day at the expense of corporate governance.”
In two days, when the four directors officially leave, White will help present the company’s half-year results as ‘Founder and Founding CEO,’ WiseTech said. The other three departing directors are Lisa Brock, Michael Malone and Fiona Pak-Poy.
White is so closely associated with WiseTech’s value that cutting him loose would have risked a stock market rout. He owns 37% of the company. When he stood down in October, WiseTech agreed to retain him on a 10-year contract as a consultant to soothe investor concerns that the company might lose its most valuable asset.
Enforcing governance standards at listed entities becomes complicated for boards when an executive they oversee is also the major shareholder to whom they answer. In WiseTech’s case, many investors were more worried that White would be marginalized by the board than they were about allegations of misconduct.
“There were great concerns in the market about whether Richard White was being pushed out,” said Paul Mason, managing director of technology & gaming research at Evans and Partners Pty. Mason said any pressure on WiseTech’s shares Monday probably reflected the revenue outlook rather than opposition to White’s involvement with the company.
WiseTech is a key provider of the software that coordinates logistics and shipping across the world. It claims the majority of the world’s biggest global logistics providers and freight forwarders among its clients, including DHL, China’s Sinotrans, Japan’s Nippon Express and APL Logistics.
Behavior Claims
White has pulled off what last year looked like an improbable victory. According to local media reports, he paid millions of dollars to a former partner to settle allegations of inappropriate behavior. White also had a years-long relationship with an employee before gifting her a A$7 million house in Melbourne, while a former board member had accused White of intimidation and bullying, according to the Australian Financial Review.
The board’s preliminary findings into these allegations, released in November, were that White’s behavior couldn’t be characterized as bullying or intimidating. It concluded that he “has a direct approach and from time to time is involved in robust and challenging discussions.” The review described this process as “creative abrasion.”
Two fresh confidential complaints about White, made by an employee and a supplier, compounded the pressure on WiseTech’s directors to take more substantive action. But White has come out on top.
WiseTech said Mike Gregg will start as a director on Feb. 26, having previously served on the board between 2006 and 2022. Gregg was one of the first outside investors in WiseTech, and still holds 4.7 million shares — worth around A$572 million at the last closing price — according to the company’s latest annual report.
When Gregg left the board in 2022, White posted a video to “pay a special and heartfelt thankyou for his early investment, his trust and intellectual effort in his 16 years of service.”
The remnants of WiseTech’s board now date back to White’s early years: Maree Isaacs is a company co-founder and has been a director for more than 30 years. Charles Gibbon was one of WiseTech’s earliest outside investors. He joined the board in 2006 and was chairman for more than a decade.
–With assistance from Georgina McKay and Carmeli Argana.
