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Clashes behind REIWA split

THE Real Estate Institute of WA is in turmoil as it deals with a backlash following the dismissal of long-serving chief executive Michael Griffiths.

The sacking of Mr Griffiths has brought to the surface allegations that he was the victim of a coup orchestrated by a group of REIWA council members who had clashed with the long-time executive.

The surprise move late last year has prompted a split in the membership’s ranks, with a dissident group demanding that the council outlines the reasons for Mr Griffiths’ dismissal.

This break-away faction also wants to make it mandatory for future presidents to have held a real estate agent licence for at least five years. This has caused a rift within the REIWA council, with the move interpreted by some as aimed squarely at vice-president Greg Rossen, who is not a licensed real estate agent and is seen as president-in-waiting.

According to sources, the push to have Mr Griffiths ousted from his position dates back to mid-2003 when the president and a number of councillors called for an independent management audit.

Management consultant David Rowe was later appointed. 

Sources say Mr Rowe later delivered a report in August stating that REIWA was in fine shape, both administratively and financially, and endorsing Mr Griffiths’ performance as CEO of the institute. 

In September 2003, the 14-member council ratified its support of Mr Griffiths with a unanimous vote of confidence. Ten weeks later the CEO, who had served for 19 years, was asked to leave.

WA Business News understands that, prior to the council’s decision, an unofficial REIWA council meeting was held in early December to discuss how council could remove Mr Griffiths. According to a source, four REIWA councillors – David Airey, Michael Hoad, Stewart Walls and Steven Carulli – were not invited because they were thought to be supporters of Mr Griffiths.   

At the official council meeting several days later a motion was moved to dismiss Mr Griffiths. The vote was carried, though two councillors chose to abstain.

The secrecy surrounding the CEO’s dismissal has polarised REIWA membership and has been viewed by many REIWA members as an unfair and poor way to treat a long-serving employee, who was considered to have contributed greatly to the institute and the real estate industry as a whole.

One source said there had been ongoing conflict between the former CEO and the president, Jim Henneberry, Mr Rossen and several other councillors.

Part of this was fuelled by personality clashes, but there were other underlying issues. 

One source of tension was a REIWA taskforce – headed until recently by Mr Henneberry –formed to consider merging REIWA’s weekly publication, Homebuyer, with another weekly publication, Real Estate WA.

Real Estate WA is controlled by a public company, RE Company Ltd, an entity in which Mr Henneberry and a number of other councillors have a beneficial interest.

Real Estate WA (formerly the Perth Real Estate Guide) was formed six years ago by a group of northern suburb real estate agents who wanted a more economical advertising option. Mr Henneberry was on the steering body that first formed the publication.

Today, the weekly publication is delivered to 100,000 metropolitan letterboxes and made a net profit last financial year of $91,478. 

It is understood that Mr Griffiths had voiced his concerns about the proposed merger process.

When asked about the arrangements for the merger process, one source bluntly stated: “It had the potential not to smell right”.

Mr Henneberry said discussions about a possible merger with Real Estate WA had been held over the past 18 months.

He said REIWA members had been fully informed and that the process had been 100 per cent transparent.

“All shareholding was announced and revealed,” Mr Henneberry said.

RE Company chairman Russell Poliwka said a potential merger would involve establishing a third company, with both REIWA and RE Company sharing interests.

He said the motive behind the move to merge the publications was to provide a better service for the agents who advertised.

“If you really wanted to make money you wouldn’t sell to REIWA,” Mr Poliwka said

He said that, while shareholders might gain financially in the long term from a potential merger, there would not be any immediate financial gain.

Expense claims was understood to be another source of tension between some councillors and Mr Griffiths before his sacking.

Several sources confirmed that Mr Griffiths had made himself unpopular when he knocked back expense claims that did not meet REIWA policy.

“To be quite honest, some councillors … need to be sent on a corporate governance course,” another source said.

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