Chairman Ralph Waters defends Woolworths board

Woolworths supermarkets boss Brad Banducci has not ruled himself out of running for the top job when Grant O’Brien steps down.

Woolworths’ newly appointed supermarkets boss Brad Banducci has not ruled himself out of the top job at the supermarket giant when Grant O’Brien steps down.

Asked directly if he would be a candidate for the CEO’s role, Mr Banducci told The Australian this morning he would have a discussion with Mr O’Brien and Woolworths chairman Ralph Waters later this year on the succession.

“I am completely focused on generating growth inside the Woolworths liquor and food group, together with the team, and getting customers to put us first, that is my first second and third priority, at the appropriate time I will have a conversation with Grant and Ralph about this,’’ Mr Banducci said.

Earlier this year the South African-born Mr Banducci was handed the toughest gig in Australian retail — to ­resuscitate the performance of the Woolworths’ supermarkets business, a sprawling giant of a beast, with more than 830 supermarkets and more than $40 billion in ­revenue a year.

Before that elevation Mr Banducci ran Woolworths best performing division, its Dan Murphy’s big-box liquor arm. He moved to Australia 25 years ago.

Other likely candidates for the top role at Woolworths could include former Woolworths senior executive Greg Foran who was passed over when Mr O’Brien was appointed chief executive four years ago.

Mr Foran subsequently quit to run US giant Wal-Mart’s stores in the US.

Mr Waters said this morning the headhunters would do a wide search and would check with the firm if certain names are on the list, but declined to say if this would or would not include Mr Foran.

Mr Foran still has strong links to Australia with his son Kieran Foran a player for rugby league team the Manly Sea Eagles.

Mr Waters earlier defended his board amid investor criticism that it lacks accountability and controls.

Woolworths shares are cheap, cheap

He also rejected suggestions the nation’s biggest retailer should hire external consultants, namely former Woolworths CEOs who ran the company at the peak of its success, to help advise on the appointment of a new chief executive and other key executive appointments.

Wesfarmers has used UK retail legend Archie Norman to help advise on picking its key executives to run Coles when it bought the chain more than 10 years ago.

Mr Waters said the supermarket giant would hold a worldwide search and wouldn’t limit it to executives who only had supermarket experience.

Speaking to market analysts and investors this morning in Sydney, Mr Waters conceded his board of directors was “young”.

“The board’s view is — and also the advice of the external search agents, and it was very strong advise — is that the stability of the board through this process is paramount,” he said.

Mr Waters said the formal appointment of a search firm to recruit Mr O’Brien’s replacement would be made by the end of this week.

Mr O’Brien, 53, will continue in the role until a new chief executive is found. This will see him able to access the retailer’s lucrative retirement benefits scheme.

Mr Waters today refused to outline financial payments to Mr O’Brien.

“We are under no obligations to make any disclosure concerning Grant’s superannuation payments, the board won’t be disclosing those, that is entirely a matter for Grant if he wants to do that,” Mr Waters said.

“He will need to be here 13 months to pass his 55th birthday and under the arrangements we have made with him he will easily exceed that.”

Mr O’Brien, who qualifies for the scheme when he turns 55 in July 2016, also refused to disclose the financial arrangements.

Mr O’Brien said he had discussions with his chairman concerning his desire to retire “recently”, but refused to be more specific on the timing.

Mr O’Brien’s decision to retire was accepted by Mr Waters last night following a 5.30pm telephone board hook up.

Mr Waters said he had no preference for an internal or external candidate to take over as chief executive.

“We are not disposed one way or another, but we will be better disposed to make a decision when we see a list of candidates from both inside and outside,” the chairman said.

Woolworth shares were up 45c to $27.29 on the news this morning, with the market clearly embracing the change at the top of the ailing, under-pressure company.

Asked whether there was concern at board level that Woolworths shares were the most-shorted stock in the top 20, chairman Mr Waters said he was confident the company’s fortunes would rebound and that the shorting would end.

“We’d prefer that 8 per cent of the stock wan’t shorted, but there will be an end game to that at some stage,” the chairman said.

“There’s going to come a time that we are going to announce some figures that is going to change the sentiment in the market.

“It is only a matter of time that you will see a reversal of fortunes and the shorting will end.”

Mr Waters said there was no prospect that former Woolworths chief executive Roger Corbett, 74, would return to the company as a director or external consultant.

Some disgruntled institutional shareholders had been pushing for Corbett to be given a seat on the board.

“I think Roger is a past CEO and is long gone from Woolworths,” Mr Waters said.

“He had admirable retail experience, but I think we would look at a retailer of a different age group.”

Asked whether the board had the necessary skills to undertake the search for Mr O’Brien’s replacement, Mr Waters said the board had the requisite skills to make the best decision.

“At the end of the day the board has to be accountable for each decision made ... collectively I would hope we have the capability to make what the decision needs to be,” he said.

A search is already underway for a new Woolworths director following the retirement of Ian McFarlane.

Mr Waters told analysts this morning that he could appoint two directors if quality candidates were found.