Marcus Blackmore threatens to vote against chairman’s election over lost ‘entrepreneurial spirit’

Marcus Blackmore threatens to vote against election of chairman Anne Templeman-Jones as he accuses directors of shifting dial too much in way of box ticking.

Marcus Blackmore says the board his namesake company is focusing too much on governance at the expense of entrepreneurialism. Picture: John Feder

Blackmores’s biggest shareholder, Marcus Blackmore, is threatening to vote against the election of chairman Anne Templeman-Jones, believing the vitamins maker has lost its entrepreneurial spirit.

Mr Blackmore – who owns almost a quarter of the company named after him – says most of its directors have little understanding of the company’s operations and have shifted the dial too much in the way of box ticking in the boardroom at the expense of taking calculated risks.

For instance, Blackmores started exporting to India last month – but Mr Blackmore said it could have launched in the subcontinent two years ago. Instead he said it became bogged in consumer research after already completing extensive studies of the Indian market.

However, his main bewilderment is Ms Templeman-Jones – who is also a CBA director – rebuffing his recommendation of nominating George Tambassis – a director of Priceline owner Australian Pharmaceutical Industries and former president of the powerful Pharmacy Guild – to the board.

“Blackmores is a fairly unique sort of business. We sell supplements, we sell health, and I want to make sure there is someone on the board who is actually a healthcare professional – and that’s what George Tambassis is,” Mr Blackmore said.

“The board is becoming overrun by governance and I’m not saying that’s the wrong thing but it cannot come at the expense of innovation and entrepreneurship.

“I don’t have any doubt that George would be a fantastic director. Seventy-five per cent of Blackmores’s business in Australia is done through pharmacy. He can help us with the whole regulatory environment, and one of our biggest challenges is always the regulator and he‘s an expert in this space. I think he will change the game for us.”

George Tambassis (right) appears with Health Minister Greg Hunt at a press conference in 2018. Picture: File

Mr Blackmore stepped down from Blackmores board last October, having served as a director since 1973 and as executive chairman from 2009 to 2017. While most majority shareholders have at least one seat on the board – Mr Blackmore has never requested formal representation following his departure, only an occasional ear.

Mr Blackmore did not solicit an interview with The Australian nor did any of his representatives, which include global corporate advisory Rothschild. His father Maurice founded the company, but it was under Mr Blackmore’s leadership that steered the company to become a dominant player in the Australian health supplements sector, with its shares at one time breaching $217.

“I’m not going to tell the board who they should have as the chairman of the board. I’m not going to tell the board who they should have on the board but I am going to make recommendations to them, based on my experiences,” Mr Blackmore said.

Blackmores is Ms Templeman-Jones first chairmanship of a public company, succeeding Brent Wallace last October, and she will stand for election at the company’s annual meeting on October 27.

Mr Tambassis has submitted a nomination for election as a non-executive director at Blackmores’s AGM, but Ms Templeman-Jones is urging shareholders to vote against his bid.

“Having considered Mr Tambassis’ skills and experience, along with the other factors … the board has recommended that shareholders vote against his election,” Mr Templeman-Jones wrote in Blackmores’s AGM notice.

“The board recognises that robust and effective corporate governance and risk management are key to our ability to deliver on our purpose and strategy. To support management in delivery of strategic goals and ensure the board has appropriate diversity of skills, knowledge and experience, the board has undertaken a robust renewal process to appoint five new directors.

“This process included the engagement of an external professional board search firm to assist in identifying the best available candidates in Australia.”

The five directors the board has recommended for election are Wendy Stops, Sharon Warburton, Stephen Roche, Erica Mann and Ms Templeman-Jones.

Mr Blackmore said he supported the election of Mr Roche and Ms Mann. He said he had been “disappointed” with the Blackmores board for the past two years, particularly in the company’s decision to hold off its India launch, which was hailed as a step towards diversifying from the China market.

“We had a really good business case brought to the board two years ago to go into India and then one of the directors said, ‘I think we need to do some more consumer research’, having said it was a fantastic case.

“The management at the time had been to India several times, talked to people, talked to potential customers – I thought they did an excellent job.

“But it‘s very, very typical of what we’re seeing in public companies in Australia. Part of the problem is we put unreasonable responsibility on directors and I don’t think we pay them enough to marry with the level of responsibility.”

Instead, Mr Blackmore believes Australia should adopt a dual board structure, similar to the German system, where there is a management board, comprising executives, and a supervisory board that guides and monitors management.

“What we need to do is make the executive the board. The executive are the ones making the day to day decisions in the business, let‘s hold them responsible, let the shareholders hold them responsible. Then have an advisory board of highly skilled people who can lend their skill and ability to the board without fear of getting sued or something.”

Mr Blackmore said he believed chief executive Alastair Symington and his team were doing a good job, but he said it was Mr Symington’s first CEO role and he needed the support from the board. While Mr Blackmore mentored Christine Holgate, during her nine year tenure as Blackmores chief executive – with the pair having adjacent offices – he said he had no interest in running the company.

“I’ve got other things to do. Let me tell you, on my father’s death bed – he died in 1977 – he said ‘son, the sad thing about my life is I haven’t seen naturopathy as a true profession’. My life now, whatever is left of it – I’m 76 – my focus is about trying to make sure that natural health and naturopathy becomes more of a profession.

“That’s why I have donated $10m to Southern Cross University to establish the National Centre for Naturopathic Medicine, and that’s going extremely well. I have an involvement there and an involvement with Western Sydney University, I gave them $5m for a similar reason.

“That’s what I’m going to do for the rest of my life. I’ve had enough of making pills and capsules and selling them – other people can do that better than I can.”