01/04/2009 - 22:00

Eastwood recalls boardroom blues

01/04/2009 - 22:00


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WESFARMERS may have developed a reputation as something of a corporate cleanskin, but as former CEO and chairman Trevor Eastwood recalls in a new biography, it was not always the case.

WESFARMERS may have developed a reputation as something of a corporate cleanskin, but as former CEO and chairman Trevor Eastwood recalls in a new biography, it was not always the case.

In its not-too-distant history, the Perth-based conglomerate has faced its share of ugly fights and bruising encounters.

One that may not have lingered long in the memories of St Georges Terrace investors is the 1986 boardroom battle for the chairmanship of the company, to which author Rosemary Sayer devotes an entire chapter in her book The CEO, The Chairman and The Board.

According to Ms Sayer, a former Wesfarmers employee, the direction of the company could have been very different if farmer and board member Gordon Garratt had had his way and taken the chairmanship.

"Garratt had strongly expressed the view that if he won he would become an 'executive chairman' and control management in the farmers' interests, and that the chairman would rank organisationally and financially above the CEO," Ms Sayer writes.

Mr Garratt lost a close vote to Harry Perkins, setting the scene for what became a bitter battle.

Mr Eastwood told WA Business News that Wesfarmers had, at the time, not entirely moved on from its roots as a cooperative and that some influential people believed the company should have been more like a farmers' union.

"They couldn't separate the political from the commercial," Mr Eastwood said.

Wesfarmers' ownership of fertiliser manufacturer CSBP had caused some angst among farmers. When CSBP supported anti-dumping rules to stop cheap fertiliser entering the market, growers blamed the parent company.

It seems this became an emotive issue and, Ms Sayer writes, Mr Garratt ran with anti-dumping as an issue at a Wesfarmers shareholders meeting he requested to be held in Geraldton, the key town in the region he represented as a director.

A difficult meeting, which provided a platform for those wishing to vent at Wesfarmers management, was chaotically ended only when minutes of a CSBP board meeting revealed Mr Garratt, who had also been a director of the fertiliser company, had voted in favour of its anti-dumping position.

While Mr Garratt lost that battle, his widow, Patty, remembers there was no love lost between him and Mr Eastwood.

''They got rid of him,' Mrs Garratt said of her late husband, whom she described as popular among the farming community.

It was more than a decade later that Wesfarmers had to face more public difficulties when it became the target of anti-logging protests.

Mr Eastwood said the company was very sensitive to the issue of logging and its potential to spill over to its retail operations, notably the fledgling Bunnings warehouse stores, and hurt Wesfarmers reputation.

"There was no surprise that we got out of logging," he said.

Another battle featured in Mr Eastwood's biography is that of the takeover of Bunnings itself.

A family company dominated by the Bunning family, Wesfarmers was attracted to it due to its strategic position in the forestry business. At the time, its retail operations were small and badly run.

Bunnings had approached Wesfarmers as a white knight to deflect the interests of other parties; but things soon changed.

Becoming a director of Bunnings, Mr Eastwood recalls his disappointment at the way the timber company, despite being listed, was still dominated by the family from which it took its name.

Wesfarmers engaged in a stealthy and patient play, including a secret trip to London, to ultimately take full control of the group.


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