To retire or not to retire: Rod Duke on succession planning
He’s 68, she’s in her early 70s. They’ve been together for close on 20 years.
Though it’s purely business.
Briscoes Group managing director Rod Duke and chair Dame Rosanne Meo have worked together since the company listed on the stock market in 2001.
And there’s no sign of either wanting out of the relationship.
Still, when Duke was re-elected unanimously to the Briscoes board at the AGM last week as part of the regular rotation of directors, it wasn’t surprising to hear the words “succession planning” popping up in question time from Alan Best of the NZ Shareholders’ Association.
“As Rod Duke commented in the annual report, directors with wide and deep retail knowledge and skills are not in plentiful supply, so an early move to find and groom directors to replace Dame Roseanne and Rod Duke makes sense,” Best said.
“Our concerns are not around capability, but simply to acknowledge the march of time and the potential difficulties that could occur without a clear succession plan.”
It’s hard to imagine Briscoes without Rod Duke. He bought what was basically a failing hardware wholesaler and wannabe retailer in 1989 and built it up to be one of the more successful retailers in the country.
Duke is very much a hands-on operator and is making it clear he isn’t thinking about retirement any time soon. But he tells Newsroom he’s not planning on being taken out of the company’s soon-to-be-finished, leak-free Auckland headquarters feet-first in a box either.
“I wouldn’t want to be there for an extended period. I’d like to think I can spend a bit [of my money] as well as earn it.”
The 2018 NBR Rich List values Duke at $750 million, including his 78 percent share of Briscoes. He and his wife Patricia are developing a large waterfront property in the Auckland suburb of Herne Bay, including a controversial James Bond-style helipad, with a fold-back roof. Defending his plans against local protest, Duke argues the helipad will make it easier to get to out-of-town courses to play golf - another passion.
So is he ready to spend more time on the course?
“Right now I don’t know that answer,” he says.
Duke’s long-term colleague and Briscoes chief operating officer Pete Burilin retired recently aged 60, after 20 years with the company. It’s got his boss thinking.
“It’s a personal thing. Some guys have these targets and 60 is the trigger. Some have health issues and some don’t.”
What Duke is clear about is he wants it to be his decision.
“I don’t want to be in the situation where I get a tap on the shoulder and they are saying ‘Rod...’.”
But replacing someone like Rod Duke won’t be easy.
“Rod is an incredibly good operator,” says NZ Funds chief investment officer James Grigor. “It’s incredible how that business has done, given the retail environment. So it will be a big change [when he leaves].”
Change at the top of a company is more complicated when the boss is also a major shareholder, Grigor says. It’s likely the other investors will be keen to see Duke stay on in some board position after he resigns as managing director, yet that could be challenging for his successor.
“It could be difficult for someone taking over the reins,” Grigor says. “There could be a definite tension. It will take a certain type of person to succeed.”
Take the recent changeover at Sky TV, with long-term CEO John Fellet being followed by new broom Martin Stewart. Although Fellet remained on the board for a short period, there were differences in approach and the outgoing CEO resigned as a director soon after Stewart’s arrival.
Had Fellet been a major shareholder, things could have got awkward.
On the other side, Stephen Tindall and Rod Drury have stepped out of the limelight in (respectively) The Warehouse and Xero, while remaining involved in the company at board level.
Meanwhile, chair Rosanne Meo joked at the 2018 Briscoes AGM, when it was her turn for re-election, that she’d promised her family to drop one chair role for each new grandchild she had. That promise has left her with two chair roles, plus some charitable positions, although she wasn’t clear on her two daughters’ future procreation plans.
Duke says the company isn’t ignoring the issue of succession planning - particularly in terms of grooming existing management for the top job.
“It’s been a topic of discussion between myself and the board about who we have inside, what sort of allocation of responsibility, and how we develop people inside. It’s going well.”
Briscoes has a number of senior managers with more than 15 years' experience with the company. CFO Geoff Scowcroft and general manager store development Nick Turner both joined in 2002; group GM Fraser Collins has been with the company since 1984.
And Duke says taking on new staffers is also an opportunity to bring people on board who could move up into top roles.
“We’ve been doing that for a while. The last two or three people we brought on board, we thought they had more capacity within them to take them not necessarily to CEO but to the next step.
Duke says shareholders should be pleased to see senior figures “who are well qualified and even today doing more than their job title”.
And while Duke isn’t planning anything dramatic, he’s not too concerned about the fate of his company if the unexpected happens.
“I’m not without people who at the least could hold the fort for an extended period.”