Fletcher departure the final act

JENNY KEOWN
Last updated 15:30 25/09/2012

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Some might say that Hugh Fletcher's departure from building giant Fletcher Building is momentous, ending as it does the family's ties with the firm going back over 100 years.

Not the man himself, however.

Stepping down from the board was less of a big deal for himself and his family than his retirement as chief executive of Fletcher Challenge in 1997.

"As an executive, particularly as a CEO, you put your major stamp on an organisation. As a non-executive director ... you are still a significant step removed," he said.

Fletcher announced last week that he would retire from the board at the end of this month.

He feels one of his biggest achievements as boss was leading the acquisition of Petrocorp from the then-Labour government in 1987, and seeing the Synfuel plant become a methanol plant rather than a synthetic gasoline plant.

Fletcher bought Synfuel and developed it to become one of the world's leading methanol companies.

He also believes he gave valuable experience to New Zealanders which has enabled them to succeed on the world stage - such as his mentorship of John Hood, a former Fletcher Challenge director who went on to be the Vice Chancellor of Oxford University.

Much has been written about Fletcher's time at the helm of Fletcher Challenge. That includes criticism that the demise of the corporate giant could be put down to major mistakes in buying assets at the wrong price at the wrong time, that it had too much debt and that there was a major personality conflict between the company's chairman, Sir Ron Trotter, and Fletcher.

"Most of what has been written was shallow and completely fails to understand the dynamics of industries, and invariably written by people who have never run an industrial organisation or have any understanding of the international tradeable goods and services sector," Fletcher said.

"Tell me another organisation in New Zealand of this size that has survived 100 years."

Fletcher Challenge had $13 billion of debt in 1990, but the company paid every dollar of interest and principal on time.

However, he concedes he made a mistake in the merger between Fletcher Holdings, Challenge Corporation and Tasman Pulp & Paper in 1981. At the time, he was in his fourth year as CEO of Fletcher Holdings.

"The two people who paid the biggest price for that merger were my father and myself - he gave up being chairman and I gave up being CEO to feed the ego of Sir Ron."

After the merger, Trotter took on the role of chairman and chief executive of the conglomerate.

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Fletcher said the transaction was complicated and he should have waited a few years until Challenge "stumbled" and could have made the acquisition on more favourable terms.

Fletcher is also a director of Rubicon, the Reserve Bank of New Zealand, Vector and Insurance Australia Group. He is a member of the Australia and New Zealand advisory board of LEK Consulting, and a trustee of the New Zealand Portrait Gallery and The Fletcher Trust.

The company was founded by his grandfather Sir James Fletcher in 1908.

- BusinessDay.co.nz

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