WES 1.01% $66.27 wesfarmers limited

This is about the financial impacts based on the expectations of...

  1. 16 Posts.
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    This is about the financial impacts based on the expectations of broader stakeholders. This was a financially motivated decision for the WES board, not a political or moral decision. They are de-risking their cost base, and looking to their communities for customers and employees.

    Hiring and retaining staff is hard and costly. Supply relationships are challenging and costly, and many of them have clauses that need to be met on social issues (i.e. ESG). Customers are varied in their expectation, difficult to attract and keep. So yes, this was a decision that is designed to improve the financial wealth of WES, by minimising employee, supplier and customer churn, which will minimise the administrative costs of WES, i.e making money and I'd suggest "sustainable" profit for shareholders.

    It is not director's duty to make maximum profit only, it is to act in the best interest of the company. If it is maximum profit only, they could squeeze their balance sheet and return maximum profit and been wound up in 1-2 years without a sustainable business model. This decision is about WES being in the communities which they operate, and being ongoingly relevant to customers, employees and suppliers.
    https://www.aicd.com.au/company-policies/corporate-social-responsibility/examples/best-interests-duty.html
    "Commissioner Hayne made similar observations in the final report of the banking Royal Commission. Notably, an assessment of what is in the best interests of a company “demands consideration of more than financial returns that will be available to shareholders in any particular period”.

    WES board do consult with their shareholders, at every AGM, where you can vote.

    Any shareholder/owner would be doing their fundamental analysis on the management of the company, determine if they can run the company, and earn the returns that aligns with their investment philosophy. If you don't agree with management's investment decision, or don't believe management' and the Board's decision and governance process aligns with the way you would like them to make money, and profit for their shareholders, sell your shares.

    You can also demonstrate your opinion, and confidence in the management on this use of company money, by selling your shares.
 
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