Six months, still no F&N CEO

Is it a question of finding the right person or deciding on a new direction first?

IT HAS been more than six months since local food and beverage giant, Fraser and Neave (F&N) has been without a full-time chief executive officer following the hasty departure of Dr Han Cheng Fong last October.

Mr Lee Hsien Yang assumed the post of chairman in the middle of that same month and has since had to take on the CEO’s responsibilities at the same time. But he is on record as saying: “I have no desire to stay on as acting CEO or executive chairman for long.”

He also said that the company would be announcing a new CEO in “due course”. That was said at the company’s annual general meeting of shareholders in January.

It’s now coming to the end of April and there still is no CEO at F&N. F&N is not only the largest producer of soft drinks in Singapore, but the company is also into brewing beer, developing property, running serviced apartments and, under Times Publishing, printing and publishing.

Before that AGM, I had reported that the company had temporarily suspended its search for a CEO pending a review of its business units. The review was to determine whether the company was going to hive off its three main business units — food and beverage, property and printing and publishing — into separate companies or retain the status quo and keep the three businesses in one company.

This was vehemently denied by F&N group company secretary Anthony Cheong: “It has not been put on hold and is not ‘pending a review of the group’s future direction’.

However, the company was reported to have said that it was not in a hurry as it wanted to find the right person for the job.

But would it make sense to hire somebody to run F&N as it is now, only for him to see the company broken into separate units later on? Wouldn’t it be better to a make a decision now on the company’s direction and then decide on the appropriate person?

It was reportedly a finding by Dr Han, 65, that group morale would be adversely impacted should F&N be broken up that led to differences with then chairman Michael Fam and the former’s eventual departure from the company.

Many analysts believe that the sum of parts — that is if the group is broken up into separate business units and listed separately — would bring greater benefits to F&N’s shareholders.

It was only six years ago that F&N privatised Centrepoint Properties and Times Publishing and absorbed them into the main company. At that time, the rationale was: “The privatisation of Centrepoint and TimesPub is aimed at restructuring F&N into a stronger and more flexible group, to further enhance shareholder value and sustain long-term growth … F&N, as an entrepreneurial shareholder in these companies, already plays a proactive and pivotal role in charting the strategic directions of these businesses. The privatisation of Centrepoint and TimesPub will give more flexibility in managing their resources.”

Dr Fam also went on to add that “through appropriate rationalisation and consolidation measures, we hope to realise greater synergies within the group — for instance, by sharing best practices and tapping on the combined wealth of experience, knowledge and expertise of the management teams”.

While F&N should ensure that it finds the right person for the job, keeping its shareholders guessing for too long on where it’s going is also not fair to them.

Mr Lee is more than capable of running the company well, but his declaration that he does not want to be CEO or executive chairman for long might give the impression, rightly or wrongly, to shareholders that he is just doing a maintenance job.

Source : Today – 23 Apr 2008

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