The message from the Brambles board is one of continuity and vigilance against complacency as Stephen Johns steps up to chair the logistics giant and the long-serving Graham Kraehe retires.
Mr Kraehe, who also chairs BlueScope Steel, will step down in September after a six-year stint as Brambles chairman and 14 years of involvement with the $14.6 billion pallets, crates and containers group.
“The important thing for me is to be leaving the company in very good shape,” Mr Kraehe told The Australian Financial Review.
“We have a very capable CEO in Tom Gorman and a real operational focus...The biggest risk to us is not competitors, it’s that we become complacent,” he said.
Mr Johns, who has been a non-executive director of Brambles since 2004, takes leadership of the boardroom shortly after Brambles has completed its transition from conglomerate to a focused pooling solutions company.
Mr Kraehe become chairman in 2008 in the wake of the sale of Brambles’s Cleanaway and Industrial Services businesses. In December, Brambles completed the $1.5 billion demerger of its Recall document management business.
Mr Johns, a former chairman of Leighton Holdings who was previously an executive at Westfield, said he’s taking on the reins at a good time for Brambles.
“We have a clear strategy being well implemented by management. The message here is continuity. We have a pooling solutions strategy we have been heading towards for many years now,” Mr Johns said.
“I’ve served under [former chairman] Don [Argus] and Graham. I’ve been part of the strategy. I’m not coming in with management changes or different ideas. The strategy has been embraced by the market. It would be foolish to have a big picture vision of change.”
Brambles shares, which gained 1 per cent on Wednesday morning to $9.33, are up about 2.5 per cent in the past 12 months. But the stock is not far from its five-year high of $9.78 and has risen strongly from the low of $5.19 in June 2010.
Brambles chief executive Tom Gorman is implementing a five-year plan to cut overhead costs by $US100 million and to lift the group’s return on capital to 20 per cent from the 15.7 per cent reported in February.