Shareholders call for resignations at Fletcher Building amid Gib shortage

Monday, 20 June 2022

Shareholders in Fletcher Building have called for sweeping changes to be made to the company, after what they say are “systematic failures” resulting in a national Gib shortage.

An open letter which called for the immediate resignation of current Fletcher Building chairperson Bruce Hassall was signed by Sam Stubbs, managing director of Simplicity KiwiSaver, and Oliver Mander chief executive of the New Zealand Shareholders Association.

The letter also called for independent reviews into company culture and its risk assessment process, as well as a request for the entire board to stand for re-election.

Simplicity and NZSA members own a combined 1.4% of issued Fletcher Building shares.

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The open letter was signed by Simplicity and the New Zealand Shareholders Association.

Fletcher Building has been approached for comment.

Both Simplicity and the NZSA previously raised concerns about Fletcher Building’s handling of the Gib board shortage.

The letter said shareholders were disappointed not to see any substantial admittance of fault for the company’s role in the current plasterboard supply crisis.

“Your refusal to acknowledge the existence and depth of stakeholder dissatisfaction speaks to a corporate culture based more on hubris than humility,” it read.

The Gib shortage seemed to be evidence of poor risk management and business decision-making from the company, they said.

Simplicity Living managing director Shane Brealey says the company wants to buy New Zealand-made products when it can, but the behaviour of Fletcher Building has made that impossible.

The letter also shared a disappointment in Fletcher Building’s five-year performance, which included a 20% reduction in share value.

It raised issue with the company’s leadership being “one of the highest-paid public company board of directors in New Zealand”.

The Fletcher Building chair person, Bruce Hassall, received more than $344,000 in director fees last year. The lowest-paid director received more than $170,000, the letter said.

The letter came after the shareholders expressed “disappointment” in a meeting with Fletcher Building last Friday, in which the company was asked to explain how it had allowed the Gib shortage to occur.

Simplicity Living managing director Shane Brealey said there was a lack of accountability shown by of Fletcher Building executives during the meeting.

Earlier this month, Simplicity Living cancelled all contracts for Gib with Fletcher’s Winstone Wallboards and instead imported a similar plasterboard from Thailand.

Brealey said the company wanted to buy New Zealand-made products when it could, but the behaviour of Fletcher Building had made that impossible.

Winstone Wallboards, a subsidiary of Fletcher Building, produces 94% of plasterboard in New Zealand.

Fletcher Building chief executive Ross Taylor previously said the company was willing to do everything possible to alleviate the plasterboard shortage.

Last week he said Winstone Wallboards would ramp up the production of Gib plasterboard between 7% and 8% between July and September.

The escalation in production was possible due to changes in manufacturing, and the importation of more plasterboard from Australia, he said.

But Brealey said the increase in Gib was a “drop in the bucket” compared to what the building industry needed.