Orica Limited (ASX:ORI) has announced that their chief executive officer will be resigning. Ian Smith will be leaving the company amid reports of an alleged bullying incident. In September, Orica chairman Russell Caplan told The Australian of a discussion he had with Mr. Smith. The chairman asked Mr. Smith to watch his aggressive behaviour and they both came to an understanding. However, less than a year later, the company now believes they need to follow a new direction. “The board and Ian agree that this is an appropriate time to move forward with transition to a new leader with a different management style who will consolidate and build on the foundations that have been laid,” chairman Caplan said.
Mr. Smith played an active role during his time with the company. He helped oversee significant changes to the company’s structure, including the $750m sale of its chemical business. Mr. Smith also helped oversee the company’s plans to execute a $400m on-market share buyback over the next year. “The board set Ian a challenging brief and a demanding time frame to lead a vigorous top-to-bottom transformation of the company,” said chairman Caplan. “As a result, Orica today is a stronger, more resilient company.” Mr. Smith concurs with this assessment of his contributions as CEO. “Orica’s transformation to a pure play, global mining services company has been achieved, its cost profile has been significantly reduced and its focus on delivering value-adding solutions to the resources and infrastructure sectors has been sharpened,” he said, in reference to the announcement today.
Shares of ORI are down 84c, or 4.37 per cent, at $18.37 with less than two hours of trading left today. ORI’s one-year return is down 19.62 per cent. Although ORI has faired a little better this year, it is still down 2.96 per cent so far this year.