Leighton chairman’s sudden resignation

Australian contractor Leighton has appointed a new chairman after the sudden resignation of Stephen Johns and two non-executive directors, following what they claimed was a breakdown in relations with parent company Hochtief.

Bob Humphris, who has been an independent non-executive director at Leighton since 2004, took the reins as the new chairman on 24 March.

The move came after previous chairman Mr Johns and independent non-executive directors Wayne Osborn and Ian Macfarlane tendered their resignations on 22 March.

The departing directors claimed Hochtief, which owns 53% of Leighton, no longer supported an independent board for the company. For more than 10 years, Hochtief and Leighton have had a set of governance principles in place that have seen Leighton operate with a majority independent board.

Leighton issued a statement rebuffing the claims of the directors that walked out, claiming current arrangements with Hochtief concerning the independence of the board were still in place.

“The remaining Australian directors are not aware of any specific information that Hochtief no longer supports these arrangements,” Leighton said.

Hochtief is majority owned by Spanish construction group ACS, which won control of the German company after a hostile takeover battle in 2011. Since then, ACS has appointed its own executives on the Hochtief board.

For its part, Hochtief said it had never tried to undermine the independence of the Leighton board, or interfere in the appointment process of a new independent director.

However, it added, “In general we suggested that the board would benefit from an additional set of skills. We therefore were concerned by a proposal from independent directors for a replacement of the current principles. The new scheme would have restricted the right of Hochtief.

Commenting on his appointment as Leighton’s new chairman, Mr Humphris said, “The board, the major shareholder and management are all firmly committed to Leighton and are absolutely focused on managing the business in the best interests of all stakeholders.”

He said a special committee had been established to identify and appoint additional independent directors to the Leighton board.