Goyder’s the hot tip to succeed at Wesfarmers

THE new leadership of Western Australia’s largest industrial company could be announced next week after Wesfarmers’ annual strategic planning conference.

Finance director Richard Goyder is a hot favourite to be named as successor to current managing director Michael Chaney, who has previously said he does not plan to renew his contract when it expires in July 2005.

The board’s intention to review management succession at next week’s strategy conference was first outlined by Wesfarmers chairman Trevor Eastwood last November, after the company’s annual general meeting.

The company is due to announce its March quarter results on May 5, providing a logical time to announce the next managing director.

Wesfarmers’ outstanding commercial success and a desire to maintain its successful corporate culture strongly suggest the new managing director will be an internal candidate.

Apart from Mr Goyder, another possible successor to Mr Chaney is executive director business development Gene Tilbrook.

Wesfarmers’ management structure provides a fertile field of future leaders, since each of its operating divisions has a high degree of autonomy.

Wesfarmers Energy managing director David Robb, Bunnings managing director Peter Davis and CSBP managing director John Gillam are just some of the members of Wesfarmers’ leadership group.

Patersons Securities head of research Rob Brierley concurs with the prevailing view that Mr Goyder will win the top job.

He noted that Mr Goyder has been given a higher public profile over the past year, with his involvement in financial results and other announcements.

“The succession planning is well developed and runs very smoothly,” Mr Brierley said.

“It’s a true reflection of a well-run company when people are groomed to take over and succession plans are implemented in a timely fashion.”

The 43-year-old Mr Goyder was recruited by Wesfarmers in 1993, from Tubemakers of Australia, and joined the board in July 2002.

He has worked mainly in corporate head office, including as general manager of Wesfarmers’ business development department, which assesses acquisitions and other growth opportunities.

From 1999 to 2002, he was managing director of the rural services business Wesfarmers Landmark, which was sold last year to AWB.

He moved from the Landmark role to his current position and was appointed to the Wesfarmers board of directors in July 2002.

He is also a director of 50 per cent owned corporate advisory business Gresham Partners and 50 per cent owned Australian Railroad Group.

The 52-year-old Mr Tilbrook joined the company in 1985 and has held a variety of roles in business development and with Wesfarmers Energy.

Mr Brierley said Mr Goyder’s relative youth counted in his favour, since he could run the company for at least a decade.

That would follow the pattern set by his predecessors.

Mr Chaney has been managing director since 1992, while Mr Eastwood was managing director for eight years.

Mr Chaney’s term has been a period of outstanding success, with consistent growth in profits and strong growth in dividends and share price.

Wesfarmers’ current market capitalisation of $11 billion makes it Australia’s 12th largest company and WA’s second largest company, just behind oil and gas giant Woodside, which is capitalised at $11.2 billion.

Mr Chaney is already a non-executive director of BHP Billiton and, given his market reputation, would have no shortage of board invitations flowing into his in-tray.

He has also found time to hold a number of other positions, including being a director of the think tank The Centre for Independent Studies, a member of Council of the National Gallery of Australia, and chairman of the Australian Research Alliance for Children and Youth.