Poynton on Alinta, cancer and the future for boards

John Poynton today warned that companies risk losing performance-driven executives from their boards because of a growing focus on compliance after defending his actions in the failed Alinta management buy-out at a WA Business News Success and Leadership breakfast this morning.

The former Alinta chairman and Azure Capital executive chairman defended his role in the controversial MBO earlier this year.

He said he and the MBO group were made out to be "pariahs" from a board that was initially supportive of its attempts to buy the company after suspecting it would likely be the subject of a hostile takeover.

"There must have been some criticism that the board hadn't anticipated and really in an effort to make sure we weren't getting an inside run we were made pariahs," Mr Poynton said.

Shareholders will vote next month on a cash and scrip bid from Singapore Power and Babcock & Brown after the board rejected a second all-cash offer for the utility involving Macquarie and the MBO group.

"Would you do it again? Probably not if you knew you were going to cop the flak that you did," Mr Poynton told the 600-strong audience.

In a candid discussion that touched on his passion for flying and buying expensive high performance cars, Mr Poynton also revealed that during the height of the MBO controversy in early February he underwent treatment for prostate cancer.

"I was fairly disorientated while I was reading in the paper what a terrible bastard I am," he said.

Mr Poynton told WA Business News after this morning's breakfast that while he would do things differently he was pleased at the outcome for shareholders.

"The stock went to where it did and it would not have otherwise and people made money and no shareholders have complained to me anyway," Mr Poynton said. "I think that's the most important thing."

Mr Poynton, who remains on the board of Austal, Burswood and Multiplex, said there appeared to be little upside for directors who wanted to "have a go" and explore options to help companies grow and perform.

"We have an asymmetry in risk because people like me are about trying to get companies to perform and delivering for shareholders," he said.

"That's our role. Sure we can get balance by getting people in who are compliance orientated and making sure the boxes are being ticked.

"If it is all about the status quo then you have a problem. Do people like me and others want to be there because where is the upside?"

Mr Poynton said he was more suited to boards that had one or a small number of major shareholders.

"My experience is that boards that have major shareholders that have a significant position in the company are more able to focus on growth and development rather than compliance," he said.

"At Alinta, there wasn't one major shareholder so it was a case of what are we all in this for? We are backing management to go forward and for quite a long time there was a good balance on the board and then when you actually go out and have a go, everyone comes back to talk about compliance.

"I think what has happened as a result of some of this criticism has led me to think that if you have a go and it doesn't work you still get sued and if you have a go and it does work unless you have the shares where is the upside?

"People have to understand they can't have it everyway."

Mr Poynton said the problem would become more apparent in an underperforming market.

"In a sense a rising tide lifts everybody but when it gets tough, what is the real incentive for directors to stick their neck out and back management to have a go if it doesn't work and the legal environment hasn't changed?

"It causes people like me who to say well if I haven't got any leverage to the stock and I am not going to get any more fees for doing the job but I'm going to get criticised or sued if it doesn't work then what's the point?"