iiNet (ASX: IIN) shares closed down 3c to $6.32 yesterday on news that managing director and founder Michael Malone is going on holidays for ‘between three and six months’.
Three cents is essentially no difference and indicates that shareholders aren’t particularly concerned by his absence. After all, the managing director simply steers the tiller; what really matters is having a good boat to ride on. Companies such as Telstra (ASX: TLS) seem to change directors once or twice a decade without much upset; presumably these individuals all take holidays without any market panic (or even news reporting on the fact).
With the chief financial officer taking over the reins in the meantime it is doubtful that there will be any negative impacts on iiNet during Malone’s absence. Besides, if anything were to go terribly wrong, it’s hard to imagine the founder of the company leaving it to wallow while he holidays.
One of the advantages shareholders have when buying into a company where the founder is still a senior manager or CEO is that a founder is far more likely to be personally invested into a company’s success than a hired director (despite the rhetoric about owning large numbers of shares tying executives to the company). Michael Malone has given 20 years to iiNet, and he will be back. Hopefully he enjoys his well-deserved break.