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14 hours ago.Updated 11 hours ago
PolyNovo shares dive on public mea culpa;
PolyNovo’s David Williams doesn’t appear to be budging from his privileged position. Shares in biotech PolyNovo dived like a German Stuka on Friday – down 13 per cent – after management finally fessed up to reports printed here in this column of nasty infighting between company chair David Williams and CEO Swami Raote.Refusing to confront this fiasco all week, PolyNovo carefully unbuttoned itself to the market before the open, confirming that Raote had been propositioned by directors Andrew Lumsden and Robyn Elliott to step down ahead of his contract expiring in June.Raote rejected the offer, despite the financial incentive attached to it, an arrangement that would have seen Elliott named acting chief executive until a permanent replacement could be appointed.PolyNovo’s acknowledgment of this unedifying spectacle was brief – just one paragraph – and it completely ignored the much weightier facts we’ve put on the record about Williams and his conduct this week.Namely, that PolyNovo’s chairman had been the subject of a bullying complaint made by Raote and chief financial officer Jan Gielen; that an independent investigation led by eminent barrister Philip Crutchfield KC substantiated enough of these allegations to recommend Williams stand down as chair; that the board accepted this proposal and offered Williams’ job to former Westpac chair Lindsay Maxsted, who rejected the offer; that executive search firm Spencer Stuart has been trying to find someone else, and hasn’t; and that all of PolyNovo’s directors have now undergone behavioural training with workplace law firm Kingston Reid because, evidently, the company’s racked by boardroom interference and white-anting and the culture in general is completely cooked.Not a word about any of that on Friday in PolyNovo’s one paragraph statement — not until well after the market had closed for the day when, spooked by the wipe-out of tens of millions of dollars from its market cap, the company issued an updated statement confirming almost every single assertion we’d made this week (omitting mainly the detail that Crutchfield recommended to the board that Williams resign).Incredibly, PolyNovo claimed that its priority was a “safe and inclusive workplace” where staff were treated “equally and respectfully”, a statement that sounds absurd knowing that the CEO and CFO have both put the company on paper for being a toxic basket case.Williams’ strategy has been to cover his eyes and ears all week in the face of these revelations, as though governance and integrity were just another punch line in some hilarious lowbrow joke he’s making, like calling a senior management colleague “Ahmed the Terrorist” as he did at a dinner a few months ago.And maybe to Williams it really is all just a joke.Take a look at PolyNovo’s five-member board. There’s Lumsden, who sits on start-up Seminal, which is chaired by Williams and run by his son. There’s Christine Emmanuel-Donnelly, who lists herself on the board of Seminal and the board of Medical Developments International with fellow PolyNovo director Leon Hoare, and which Williams chaired until two years ago. And there’s Elliott who goes back more than a decade with Williams to his days as chair of IDT Australia, where she was the managing director. They’re all mates and they all go way back.So it’s no wonder that Williams possesses the moon-like pull to reverse an independent recommendation that he step down from PolyNovo: the directors tasked with moving him on are all his affiliates and appointees.And in the end it’s not Williams’ job that’s truly at risk but actually Raote’s, the CEO having committed the grievous sin of complaining in the first place about the board interference and the bullying from Williams.Judging by an email flicked to us on Friday, PolyNovo’s staff are aghast at the prospect of Raote leaving. “I’ve already had one employee in tears today,” wrote chief people officer Ingrid Anderson after the company confirmed Raote had been asked to step down.“We should not underestimate the impact of today’s news, especially on those that have been at PolyNovo a long time and have bad memories from their ‘pre-Swami’ tenure.”And it’s difficult to read that as anything but a thorough endorsement of Raote, and an equally thorough indictment of the sham pronouncements of a “safe” and “respectful” workplace.
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