What: After around seven years as chairman of the Board at the $48.5 billion conglomerate Wesfarmers Ltd (ASX: WES), Bob Every has today announced he will step down and be replaced by Michael Chaney.
Chaney is well known and respected by many long-term Wesfarmers' shareholders as he was the Managing Director of the group from 1992 until 2005 and oversaw significant growth in shareholder value.
So what: Chaney's return to the board in the role of Chairman is a significant and arguably timely. Chaney is currently the chairman of two of the ASX's largest companies, namely National Australia Bank Ltd. (ASX: NAB) and Woodside Petroleum Limited (ASX: WPL).
Pleasingly, Chaney has also announced that he will relinquish his position at NAB. This is a prudent move by Chaney as his ability to do the job required of him at Wesfarmers would appear a stretch if he was to remain the chairman of three major corporations. Indeed it could reasonably be argued that even the role of chairman at two large blue-chips is too heavy a workload.
Now what: As the current Managing Director at Wesfarmers, Richard Goyder noted: "Michael will bring great business experience, wisdom and knowledge of Wesfarmers to the role."
His appointment to the role of chairman comes at an critical time for the group. For one, the stock price has underperformed the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) over the last 12 months at least in part due to the depressed coal market to which the Wesfarmers resource division is exposed. Chaney's experience at Woodside will no doubt come in handy with navigating these tricky times.
More importantly, the group is cashed up after recent asset sales and looking for a new growth pillar to drive its strategy forward. With the Coles and Bunnings empires a force to be reckoned with, many analysts believe a major move into financial services is a likely and appealing strategy for the conglomerate to progress growth across the group. Chaney's experience at NAB will be very useful in this respect.
