By Harish Sridharan and Shashwat Awasthi
(Reuters) – James Hardie Industries, the world’s largest fibre cement maker, on Friday fired its Chief Executive Officer Jack Truong, saying his management style was “inconsistent” with the company’s code of conduct.
The move, which comes against the backdrop of a boom in James Hardie’s business in recent years following strong demand for its fibre cement products in the United States, sent its shares nearly 11% lower.
Truong’s work-related interactions over the last several months with a group of 30-50 employees, while not discriminatory, “extensively and materially breached” the company’s code of conduct, it said.
Executive chairman Mike Hammes said on a conference call that he had urged Truong to change his behaviour after employees complained about him and many threatened to quit as a direct result of Truong’s conduct.
Despite his calls, as well as engaging an external counsel and a third-party consultant to address the issues raised, “it was clear that sincere change did not occur,” Hammes said.
“He (Truong ) was unwilling to accept what caused the issues in the first place… it was not a chemistry problem, it was a lot more fundamental than that,” he said.
Hammes did not elaborate on what was the root cause of the issues, but emphasised that they did not stem from a disagreement about the firm’s strategy or the demands of the company’s work culture.
Truong, who took the reins as CEO in February 2019, did not immediately respond to a request for comment.
James Hardie named Harold Wiens, an independent non-executive director and a former executive at 3M Co, as its interim CEO, and said it would assess both internal and external candidates to fill the position permanently.
The company also raised its fiscal 2022 adjusted net profit forecast to between $605 million and $625 million, from $580 million and $600 million.
GRAPHIC – James Hardie stock soars since 2017 strategic transformation
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(Reporting by Harish Sridharan and Shashwat Awasthi; additional reporting by Upasana Singh; Editing by Devika Syamnath, Shailesh Kuber and Uttaresh.V)
