Wesfarmers needs to pick appointees from a bigger gene pool

Michael Chaney believes in choosing people he trusts, but the incoming Coles chair’s ties with Wesfarmers are too strong.

Michael Chaney, left, and Richard Goyder. Pic: AAP

Wesfarmers chair Michael Chaney is a firm believer in picking people he trusts, which is just fine but surely he sees the need to broaden the gene pool of Australian directors.

On paper James “the stooge” Graham is well qualified to become chair of the demerged supermarket chain Coles. An investment banking doyen, he has spent more time than most as a non executive director of retail groups.

But his links with Coles’ current parent, Wesfarmers, are simply too strong.

Ironically enough when the company was planning to float Officeworks, another Wesfarmers director, Diane Smith-Gander, was slotted as its chair.

As an insider she would have attracted the same complaints, but she hasn’t served for as long and isn’t on the payroll, as Graham is as a 25 per cent owner of Wesfarmers adviser Gresham.

Investors complain the director gene pool is too small and Chaney is one of the worst offenders. He also passed the hat as Woodside chair to his successor as Wesfarmers CEO, Richard Goyder — once more a fine businessman but a little in-house.

Now Chaney has given his long time friend Graham the Coles chair.

Incoming Coles chairman James Graham

Chaney will tell you the appointment passes the ASX governance standards.

But he simply doesn’t get the perception issue, or if he does he doesn’t care.

It’s not like the Wesfarmers board is kicking goals in its own patch given the Bunnings UK disaster, which was of its own making. And new boss Rob Scott is fast wiping out Richard Goyder’s legacy with the Coles demerger.

Just maybe the Wesfarmers board needs a rethink