From sex scandal to police raids: why WiseTech has outgrown the cult of Richard White
From guitar technician to billionaire tech executive, Richard White's grip on WiseTech Global now threatens to destroy the empire he built from scratch.
For years, WiseTech Global’s success was an extension of the brilliance of its founder, Richard White: an ex-roadie and guitar technician turned logistics software creator, who built a multibillion-dollar company from scratch.
Mr White is eccentric with all the attributes of a late-age (he is 70) tech bro. Often unshaven, and despite his billions, dressed down, and choosing to live in the unremarkable suburb of Bexley in his renovated childhood home.
But that story has begun to unravel.
This week, Australian Federal Police and the corporate regulator raided the $23.7bn WiseTech headquarters and other locations as part of an alleged insider trading investigation — a dramatic development for a company already rocked by a sex scandal involving Mr White.
Insider trading, while notoriously difficult to prove, can have severe consequences. The late Rene Rivkin, a minnow compared to Mr White, spent time in Sydney’s Silverwater jail after being found guilty of insider trading in Qantas shares, despite netting a paltry profit of less than $3000.
No allegations of wrongdoing have been made against Mr White. He completed more than $260m of on-market share sales from late December before sensationally launching a boardroom coup on February 24 – the same day the company posted a savage profit downgrade, sparking a collapse in its shares.
WiseTech shares plummeted again this week, with the police raids wiping more than $5bn off its market value. Its shares have almost halved in the past 12 months. Yet the man at the centre of the maelstrom, Mr White, remains firmly in place, still turning up at WiseTech’s office in Alexandria each day.
Founder paradox
It is a corporate cult of personality saga running headlong into the demands of modern governance, akin to Elon Musk at Tesla – who is asking shareholders to back a $1 trillion payday – saying he is the only one who can deliver success for the electric vehicle maker.
For WiseTech, the central, unaddressed question for the market is no longer about the extent of the damage, but about the patience of its backers. When will enough be enough?
Mr White’s grip on the company is a double-edged sword: the source of WiseTech’s extraordinary success, and the root of its deepest governance woes. Since listing in 2016, WiseTech shares have soared by 1660 per cent, a track record that buys the founder significant latitude.
Investors find themselves caught in a founder’s paradox. They want the ‘old’ Richard White — the visionary who built the company over three decades — but are increasingly alarmed by the ‘new’ Mr White, whose private and professional troubles are colliding at the highest levels.
As Australian Shareholders Association chief executive Rachel Waterhouse said, the company is relying “too much on White for leadership and innovation”. The reluctance to fully abandon him is compounded by concerns over his successor as CEO, Zubin Appoo, who was appointed in July and is “yet to prove himself in the market”, according to some analysts. It is a tacit acknowledgment that, for now, the stability and long-term vision of WiseTech remain inextricably linked to the man whose controversies are tearing it apart.
Cult of success v transition dilemma
The challenge WiseTech’s board faces — the removal of a founder — is one of the hardest choices a board will confront.
Mr White has sought to insulate himself, rebuilding WiseTech’s board with long-term supporters – a move that has been questioned by the ASA and industry fund Hesta, which have both demanded more independence to clean up its governance woes.
But calls are mounting for a succession plan that doesn’t derail the already scandal-ridden company.
Former Xero, Microsoft, and Apple executive Steve Vamos, writing in his book, Through Shifts and Shocks: Lessons from the from line of technology and change, offers insight into this dilemma.
“Replacing a founder is one of the hardest choices a board and management team will confront,” he said.
Mr Vamos said that founders often struggle to grow as leaders as the business scales, an evolution not all are capable of or motivated to take on.
A friend of Mr Vamos, an executive at another successful founder-led tech company, shared his own predicament: the company was still growing revenue strongly, but he felt it was performing below its potential because it had “outgrown the founder”.
This is the central dilemma at WiseTech.
Mr Vamos outlines the steps a board should take. In his book, he says the board needs to understand exactly what is going on with the founder and the leadership team. The board must then provide the founder with feedback and help develop a plan, while also building internal and external succession depth. Finally, it must monitor progress before contemplating a transition.
For all the boardroom drama, some analysts are “cautiously” upbeat about WiseTech’s longer-term earnings prospects. They point to the potential for strong momentum into fiscal year 2027, driven by a new commercial model and product rollouts.
Veteran stockpicker Richard Coppleson said in a client note: “It may not run away just yet. But a floor around here will be established and stock should work back to $80 pretty easily in the next few weeks, leading into their AGM.”
Hesta also has continued to stick by WiseTech, despite threatening to sell its 0.6 per cent holding, saying it is continuing to engage with the company. This is unlike AustralianSuper, which sold its entire holding in WiseTech earlier this year, citing its ongoing governance issues.
Contingency plan
The limits of investor patience are being tested daily by the ASIC insider trading probe.
The investigation is complicated: Mr White was not on the board or an executive during the trades, allowing him to bypass the company’s “blackout period”. He was however, still a substantial shareholder.
The board has moved to stabilise the situation. Former chair Andrew Harrison returned as lead independent director and is quietly meeting investors – without White – to reassure them the company is “on track”. This is widely interpreted as a contingency plan: Mr Harrison would likely be named acting chair if Mr White is forced to step aside.
As WiseTech approaches its annual general meeting on November 21, the market is bracing for a showdown that will determine whether the logic of governance, as articulated by corporate veterans like Mr Vamos, finally outweighs the enduring cult of the founder. Macquarie and Jarden analysts are concerned the ongoing probes will “consume management’s attention”, distracting them from operations. For the board, the hard choice – recognising when a founder has been outgrown and replacing them – may soon become unavoidable.
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