@Parko5 I am not a corporate governance expert, so in replying here, I am drawing on my own 30-years' experience in publicly listed companies, including extensive exposure to executive teams, CEOs and boards, both in a strategic advisory capacity but also as a management team member. Those members who have a stronger governance background will no doubt be able to answer your question more properly.

It has always been my observation that DW exhibits many of the behaviours you might expect to see in an "Executive" Chair, CEO and Founder/Owner.

From my own observations of his behaviour in investor presentations, I have identified (years before today, recorded in various straws) that this would likely create tensions between his role and the "CEO" and, arguably, also between the Chair and the CFO. Evidence of this is his disclosures in his preamble discussions of key facts that neither appear in the release, the annual report, nor the scripted presentation, but which seem to be disclosed at his whim. (Very odd behaviour for a Chairman. I have often referred to my analysis of these disclosures as me playing "Inspector Clouseau" or watching the "DW Circus".)

I believe that this is a symptom of a leader who engages with managers across the company on an ad hoc basis, as he sees fit, without any agreed code. Of course, this engagement is carried out with the very best of intentions, and perhaps was appropriate when $PNV was more of a "start-up" company.

However, this is quite different from the way in which a Non-Executive Chairman normally engages with the Executive team. It is my experience that, even though less formal interactions are often arranged in a structured and purposeful way, a Non-Executive Chairman will always engage on operational matters via the CEO and CEO/CFO. Where they engage directly with other managers (such as HR Director, Head of R&D etc,) this will be with the knowledge and support of the CEO, or as part of a formal business processes (e.g., reports to the Audit and Risk Committee).

Sometimes, if there is a new CEO in place who is yet to prove themselves. a Chairman might also engage with other Executive Directors on the Management Team or other Executives, with the aim of gathering indepedent perspectives on the business, leadership and culture - particularly over the first 2-3 years, as the new CEO finds their feet and proves themselves. However, there is usually a degree of structure and transparency around these intereactions, so that they do not undermine the authority of the CEO, as the Executive with ultimate accountability for the operational performance of the company.

To me it is entirely unsurprising that Swami, having come from a megacap, multinational like J&J, will have found the "Board" behaviours at $PNV a culture shock. It is entirely unsurprising to me that things have come to a head. That it should have taken so long to do so can perhaps be explained in that these tensions are likely to spill over when performance pressures occur, as we can all see that they have in recent weeks and months.

That is my diagnosis of the situation, based solely on my observation of the actors involved over several years in investor meetings (results, AGMs etc.) I have no knowledge regarding the company and the actors other than that which we have all been able to observe over recent years.

More of my personal experience has been in very large corporations, usually with market caps >$10bn. It is only since coming to Australia in 2010 that I have had exposure to small and medium cap companies. My observation here is that behavioural norms both in Board and Management Team members often fall significantly short of the standards one comes to expect in more mature and well-governed companies. This observation not only applies to "small caps". After all, $PNV, $WTC, and $MIN are all multi-billion dollar companies. Or, at lease, $PNV was. I will go further to say that I have observed things said in ASX-boardrooms that I would never have believed would be said - but, sadly, those are secrets I will never be able to share here!

So has the Board come down on DW's side? Perhaps. Some of the actions appear to recognise gaps in Board capability and the need for succession. But given the earlier release today that the CEO is the one being asked to resign, I think the outcome for the moment is clear.

Tenure+Ownership+Performance perhaps trumps Governance!

BTW @Parko5 nothing in my recent academic career has helped me writing this post. Only my time as a practitioner!

Thanks @mikebrisy

I am nodding in agreement with your summation.

Take the example of the recent shenanigans at WTC which I believe are an important moment for ASX/ASIC. If they don't take firm action around that Board not complying with some of the listing rules now (like a majority independent audit committee), I suspect this will embolden more cow-boyish behaviour from other leaders that don't want to behave like leaders of public companies.

Add to that the wet lettuce leaf responses I have seen from the ASX over the past couple of years re companies explanations on the "why not" part of if not / why not, related to the various listing principles they are asked to report on. And finally the lack of action beyond a letter to companies that hadn't "confessed" prior to half or annual results that were significantly away from expectations...it's a worrying time.

If the market operator can't or won't take meaningful action, it doesn't auger well for all of us little folk in terms of a fair playing field. And I suspect even big super will be tempted to move away from the ASX at times, or get even more concentrated in the smaller group of large, well run public companies.

Let's hope the newish leadership at ASX steps up, or are forced to by the RBA and ASIC...

@Karmast I’d have thought $WTC should be given some time to come back into compliance before any sanctions are applied. New directors have to be approached, and given some time to do their due diligence, before signing on.

I wonder if, as part of the due diligence, they will get to see the investigation reports. If I was a prospective director I’d demand to. So, if that’s the case, the appointment of and identity of new directors will in itself be a signal.

As long as a compliant governance structure is in place a month or two before the FY report, I hope everyone will chill out. After all, there is nothing management can do if a bunch of Directors resigns, which they are entitled to do if they can’t collectively agree on key decisions. That’s the real world.

@mikebrisy Yes agreed they need to be realistic about giving them time to get back in compliance. A few months should be more than enough time though, given the significant resources of the company. The rest of the market will be watching, so it's an important "test" in my view.

That said it's very unlikely the WTC Directors happily resigned. My guess is RW was going to publicly out them and call a special general meeting to then vote them off the Board, which he and his allies had more than enough voting power to do. In that situation the real world response is to all resign to avoid such a spectacle...

@Karmast yep, no doubt that the 2 RW-friendlies threatened to push the nuclear button. Which says to me that the report findings were a line ball. And it’s because of that, that I’ve stayed on board. I don’t believe there has been any evidence of wrong doing. And for sure, RW has had the shock of his life and will no doubt be a little more careful in his personal conduct henceforth.