This week saw the unexpected departures by lynchpin participants in two of this country's most successful companies - Xero and A2 Milk - in two resignations for private family health reasons.
In the case of Xero chair Graham Smith, the statement was very clearly a departure "earlier than planned due to the health of close family members and the travel needed for him given his US home base, Xero’s ASX-listing and its Wellington headquarters," as we reported it at BusinessDesk.
The message, apparently believed by investors, was that he needed to be closer to home if he was to do the right thing by his family. The stock dipped slightly at the ASX open after Friday's announcement, but was up slightly at the close on a positive day for the ASX
In the case of A2 chief executive Jayne Hrdlicka's resignation, announced Monday morning this week, the judgement was not so kind.
Carbon copy
Citing unexpectedly heavy travel commitments and family health issues - almost a carbon copy of the announcement by Xero's Smith - Hrdlicka said she was stepping down.
A2 chair David Hearn made various soothing noises about "the positive changes that Jayne has brought to the business."
The company, routinely among the top three most valuable NZX stocks by market capitalisation, would "continue to pursue the strategies and plans developed by management and agreed by the board,” he said.
Market reaction
The stock dropped 7.7 percent to $14 immediately when trading on the NZX opened after the Hrdlicka announcement.
Melbourne-based, Hrdlicka only joined the New Zealand-based, Sydney-headquartered dairy company, with major Chinese and US markets, in mid-2018. A controversial sale of $4 million of company stock two months after her appointment unsettled shareholders and the share price plunged. She explained she had tax obligations relating to the automatic exercise of time-based A2 rights and commitments made by before taking up the A2 role.
The company thrived under her leadership. It held an annual shareholders' meeting barely a month ago at which there was no inkling of any problem. A senior Kiwi fund manager spent time with the board and senior management around that time and saw a leadership group in good heart.
Hrdlicka's realisation of another $2 million from sale of A2 transition shares, less than a fortnight ago, was reported uncontroversially as "expected."
Something changed
Between that day, Nov. 29, and her Dec. 9 resignation announcement, something happened. Something personal, family health-related and inescapable.
However, Hrdlicka's resignation statement was a study in corporate caution and obfuscation.
It cited the fact that she now realised the CEO would need to travel a lot to the company's core Chinese and US markets over the next three to five years of growth. That, “combined with running a New Zealand company based in Australia, required more travel than I had anticipated when I joined the company,” she said.
“The board and I agreed that this next phase is going to be too difficult to manage alongside my other commitments whilst also managing the health and wellness priorities of my family and me,” Hrdlicka said, revealing what is understood to be the real reason for her departure deep in her statement.
Why was Smith's statement, citing family issues and travel commitments believed, and Hrdlicka's not?
High-flyers
Smith had been at Xero a bit longer: since 2015. He was a star appointment for close observers, but has not cut a corporate swathe like Hrdlicka, an expatriate Kansan who headed Jetstar Australia for six years before joining A2.
A darling but volatile growth stock, A2 was trading around $11 when she took over last year, rose as high as $17.80 in July, fell back again to nearer $12 last month before she exercised her transition shares option, but had recovered to trade above $15 before announcing her resignation.
With her unusual surname, a name for selling shares unexpectedly once already, and as a woman at the top of the corporate heap and in very high-profile positions - an airline and then a fast-growth alternative dairy company - Hrdlicka might be the victim of sexism or legitimate criticism for sharp practice.
No wonder it was so easy for Aussie media, in particular, to construct a picture of a CEO who had left suddenly after falling out with her board.
Overly cautious
But in this instance, she appears to be the victim of the almost congenital caution of corporate entities when facing the unexpected.
Corporate entities plot and plan for everything. There must always a cogent explanation, a strategic rationale, a decent excuse.
The game becomes so ingrained that when simple candour would do, a lawyer steps forward instead.
The legitimate desire for privacy in deeply personal circumstances is fine. Graham Smith evoked it sympathetically and well in resigning from the Xero board. There will be regret all round.
Apparently, according to deep insiders who have informed this column, the same is true at A2. Nobody is pleased that Jayne Hrdlicka has left.
In attempting to stage-manage, in as bland and corporate a way as possible her departure, the A2 board has both damaged its own and its valued outgoing chief executive's brands.
