Founder's syndrome gets a new enabler

Nine Entertainment Holdings

25/10/2024 12:00

(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.

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Graphic: WiseTech stock has soared since its IPO    https://reut.rs/3YiYr3m
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 (Editing by Una Galani and Aditya Srivastav)
 ((For previous columns by the author, Reuters customers can
click on  CURRIE/ 
antony.currie@thomsonreuters.com))