It was billionaire v the board at WiseTech. Guess who won

WiseTech announced its big governance reveal on Monday – and we could have done without the four-day drum roll.

Despite being subject to a relentless barrage of behavioural complaints, sex scandals and being outed for his choice of dubious friends, the company’s founder and largest shareholder, billionaire Richard White, emerged commanding the WiseTech ship after a board showdown on Friday.

His four director detractors left the building en masse, citing “intractable differences” with White.

Richard White with his wife, Zena Nasser. The billionaire calls the shots at the company he has founded.

It’s a clear demonstration that money trumps optics. There was also a certain inevitability about which side would win this contest. In a formal sense, the board was in charge. But White and his allies had ultimate control through their shareholdings.

To be clear, WiseTech is no small tech wannabe on the fringes of the listed company space. It is a $30 billion company, the biggest tech stock on the ASX, and White is a billionaire 10 times over.

Sure, the market reacted to the state of governance disarray by knocking 20 per cent off WiseTech’s share price.

Key man risk doesn’t come any riskier than White.

But the damage to the stock’s valuation could have been catastrophic if White had genuinely left the company. The distraction caused by his serial headline status was already blamed for delays in product rollouts and weaker-than-expected revenue.

The prevailing view is that White, the suburban nerd and one time would-be rock star roadie, is still the creative strategic genius inside WiseTech – a logistics software tech company.

Key man risk doesn’t come any riskier than White.

A broker note from Evans & Partners suggested investors had been panicking last week about the possibility that White might be forced by the board to leave the company.

Last year, White stood aside from the formal management position of chief executive to take a consulting role with WiseTech in what was widely viewed as a faux move to appease those who had been rattled by the allegations he stalked women on social media platform LinkedIn and claims that he had offered personal financial investment in return for sex.

The decision to install White as a consultant looked like a workaround patched together with tape and glue, but that was ultimately unworkable because the person with the title of chief executive was ostensibly answering to the guy with the title of consultant.

However, that consultant agreement was never signed because (ironically) White reportedly was unhappy about its potential to dilute his power.

But the board needed to do something to respond to the original allegations last year against White, and so it had hired lawyers to investigate.

The law firms reviewed a series of allegations against White including alleged misuse of company funds, but preliminary findings concluded their investigations had uncovered “no impropriety”.

(The claims included allegations that White failed to disclose several close personal workplace relationships to the board, the company entered into transactions with suppliers with whom he had personal relationships, and he had misused company funds. Especially damaging were allegations from a former female WiseTech director that he engaged in “bullying and intimidatory behaviours”.)

Having navigated the earthquake allegations last year, the aftershocks just kept coming.

Last week, Nine mastheads reported three more women had come forward with allegations of inappropriate behaviour against White. Two of the new complaints were made by an employee and a supplier of WiseTech.

There is a school of thought that says what businessmen do in their private lives, regardless of how tawdry, should have no bearing on their public company roles.

But if complaints are made about behaviours or relationships inside the company, the governance stewards, ie the company directors, need to step in or risk their own credentials.

But they were never going to win a head to head with White. For them, abandoning the company was the least worst option.

The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.