Founder's syndrome gets a new enabler
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Antony Currie
MELBOURNE, Oct 25 (Reuters Breakingviews) -How do you deal with a problematic founder-CEO without undermining the company? A few years ago, shareholders in WeWork and Uber Technologies UBER.N ditched the bosses. Tesla's TSLA.O board, on the other hand, has leaned into the peculiar challenges Elon Musk poses. On Thursday, a $25 billion technology company in Australia opted for a farcical workaround.
Richard White said he was stepping down as boss of WiseTech Global WTC.AX, the logistics software firm he started three decades ago, after a series of allegations in an investigation by Nine Entertainment NEC.AX news outlets. These included approaching female entrepreneurs on social media to offer advice "that could later shift into crude or suggestive language". The publications also got hold of former director Christine Holman's 2019 resignation letter accusing White of aggressive and bullying behaviour. WiseTech is investigating the allegations.
The thing is, he won't actually be leaving the company. After a 30-day break, 69-year-old White will return as a consultant on a minimum 10-year contract, sporting the newly created title of "founder and founding CEO". He will - alongside the finance chief abruptly elevated to interim CEO - report to Chair Richard Dammery, get paid the same A$1 million annual salary as before and focus on "product and business development". All of which sounds eerily like the job description of, well, a CEO.
White and Dammery are putting a brave face on it, with the departing-not-departing executive saying the change is the result of months of discussions about his role. Rather, it is an outcome of the board's failure not just to set up a credible succession plan but also to deal with White's behaviour. After all, Holman noted when she left, that in response to the "numerous occasions" she raised a red flag during her 10 months on the board she was told she should have "founder empathy and accept this is how geniuses are".
Granted, it can be hard to challenge owners who deliver financial success. Investors who have held WiseTech stock since its April 2016 initial public offering have enjoyed a return of almost 2,900%. That's what founder's syndrome is. By enabling it to take root, the board is left trying to find a new, official, CEO willing to put up with the predecessor whose roughly 30% stake means he'll effectively able to call the shots. It's a muddled and, hopefully, uninspiring outcome.
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CONTEXT NEWS
Richard White on Oct. 24 stepped down as CEO and a director of WiseTech Global, the A$38 billion ($25 billion) logistics software company he founded three decades ago. He faced accusations of bullying and inappropriate conduct uncovered in an investigation by The Sydney Morning Herald, The Age and The Australian Financial Review.
White will remain with the company he owns around a third of, carrying the new title of "founder and founding CEO", focusing on product and business development and reporting to Chair Richard Dammery. The 69-year-old's contract is for 10 years, renewable for a further five years. He will be paid the same A$1 million-a-year salary he made as CEO.
The news publications, all owned by Nine Entertainment, reported that White had approached female entrepreneurs on social media to offer professional advice "that could later shift into crude or suggestive language".
In addition the investigation revealed that a former director, Christine Holman, accused White in her 2019 resignation note to the board of "sustained intimidation and bullying...in the form of aggressive emails, one-on-one meetings and public berating in both audit and risk committee meetings and board meetings." She also wrote that she raised his behaviour on numerous occasions but was told she should have founder empathy and "accept this is how geniuses are". She quit as a director after just 10 months.
WiseTech's board has started an investigation into the newspapers' allegations.
Graphic: WiseTech stock has soared since its IPO https://reut.rs/3YiYr3m
Editing by Una Galani and Aditya Srivastav
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