Upheaval at Tassal Group

When 3 directors resign at the same time, investors should be cautious

a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Tassal Group Limited (ASX: TGR) today announced that three of its directors had resigned. In a statement to the ASX, the company said

"Tassal Group Limited announces the resignation of Mr. David Groves, Mr. Gary Helou and Mr Clive Hooke as Directors of the company, today. The chairman, Mr Allan McCallum thanked each of the directors for their respective contributions to the company and wished them well in their future endeavours".

The company, which runs salmon farms in Tasmania, did not provide any explanation for the resignations.

Suspicious minds

While its not unusual for directors to resign and move on to other endeavours, its highly unusual for three directors to resign at once. Given the resignation of another director, Jill Monk, in October 2011, it doesn't look good – especially as all four were independent non-executive directors.

Independent non-executive directors are tasked with, amongst other requirements, making sure the board and management of the company always act in the best interests of its owners (shareholders).

This now leaves the board of Tassal Group with just three members, Chairman Allan McCallum, Managing Director and CEO, Mark Ryan and just one independent non-executive director, John Watson.

Mr Groves and Mr Hooke were members of the Risk and Audit committee. Mr Helou was not. Mr Groves had been with the company since 2007, while Mr Helou and Mr Hooke joined the company on the same day in November 2010.

Given they were all independent directors, speculation that either a clash with the CEO and or the chairman, or a corporate governance issue was behind the decision will be inevitable.

Foolish takeaway

Without an explanation from the company as to why all three directors resigned on the same day, it's hard not to read something into it. If I was a current or prospective shareholder (read part-owner), I'd certainly be very cautious in the absence of more details.

Attention: If you are looking for ASX investing ideas, look no further than "The Motley Fool's Top Stock for 2012." In this free report, Investment Analyst Dean Morel names his top pick for 2012…and beyond. Click here now to find out the name of this small but growing telecommunications company. But hurry – the report is free for only a limited period of time.

More reading

Motley Fool contributor Mike King doesn't own shares in Tassal. The Motley Fool's purpose is to educate, amuse and enrich investors. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. Click here to be enlightened by The Motley Fool's disclosure policy.

More on ⏸️ Investing

A white and black robot in the form of a human being stands in front of a green graphic holding a laptop and discussing robotics and automation ASX shares
Technology Shares

Joining the revolution: How I'd invest in ASX AI shares right now

Advances in artificial intelligence (AI) could usher in a new industrial revolution. Here’s how you can invest in it.

Read more »

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »