Ann: Suspension from Official Quotation, page-143

Some very interesting takes in this thread about the roles and responsibilities of FB, a non-executive director, and how and when we might find a replacement. For eg:
- he is too busy to be signing off on business activities
- his replacement would need to give 4 weeks notice on their current role

Firstly, a non-executive director has no role, repeat no role, in the running of the business. They simply provide input and advice to the board about the broader direction and strategy of the business. In fact one of the requirements is that they provide an independent view of management.

Secondly, as non-executive directors are external to the business there is no need for them to resign from their current job in order to be a non-executive director. The other Australian based NED, Ashley Krongold, is an example of this.

It is perfectly acceptable for a NED to hold employment elsewhere whilst being a NED at one or more other companies or organisations.

So this means that identifying and appointing a new Australian based non-executive director doesn’t necessarily need to take weeks and weeks due to search, shortlisting, waiting for notice periods etc. it MIGHT take a while to find someone but it doesn’t necessarily have to.

I have no idea why FB resigned, or was asked to resign, but some of the speculation is frankly ridiculous.

I personally don’t believe that any of the selling today was driven by advance news of his resignation. Non-executive director resignations are a non-event in terms of share price fluctuations in my opinion. Who cares that Fed is resigning? I don’t. His presence or absence has no impact or bearing on the business activity and direction.

Why the big dump today? I don’t know but I can make some informed guesses:

i) standard price action based on buyers looking to build positions for as low a price as possible in advance of potential price sensitive news being released
ii) this pattern of buying be quite aggressive and triggering stop losses
iii) momentum traders seeing the movement exiting their own positions, with either the goal of preserving capital or trading the swing to buy back later at the low
iv) nervous Nellie retailers seeing the negative 6 - 8% and rushing for the exit
v) shorters taking advantage and doing whatever it is they do take advantage of the sentiment to make their thesis a reality

Im not saying the above is what actually happened / happens but one or more of the above MIGHT be accurate guesses.

Is Fred’s resignation the trigger for this, purely coincidental in timing, or some kind of company initiated response to todays events? I don’t know but my thoughts are:

a) Trigger - no
b) Coincidence - possibly
c) Response - unlikely

The issue of the time lag between the announcement and the suspension notices are more interesting to me. The resignation notice, late in the day and whilst markets were still open, did most certainly play a part in the price falling further between 3.30 and 4.10. Nervous holders saw that announcement and then made assumptions (either correctly or not) that the earlier price action was connected to this news and started panic selling, further accelerating the days losses.

I would like to know why not issue the suspension first then follow that up with the trigger for the suspension, Therefore eliminating the final 30 minutes and about .37 cents.

My only real issue with this company is the management and control of ASX governance. I think (and without evidence or real knowledge of how these things work) that this could have been handled more adroitly.

Let’s see what happens from here. Will certainly be interesting.