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Wesfarmers Chairman Michael Chaney on succession planning and sustainability

Wesfarmers Chairman Michael Chaney's video on succession planning and sustainability transcript

I think it's widely understood that companies exist to provide good returns to their shareholders. That's why they were set up in the first place and that's their main purpose. But it would be a big mistake to think that companies were just about the money.

There are a whole lot of other things that companies have to get right if they're going to be sustainable and prosperous in the long term. What are those other things? Firstly, it means recruiting, motivating, developing and rewarding good people. It means having a strong focus on your customers' needs and desires and making sure that you satisfy them. It means making sure that you source your products, services and goods in an ethical way. It means taking care of the environment. Finally, making sure that you support the communities in which you operate, because if a company expects to get support from people in communities - its customers and so on - the communities in turn expect support from the company. These are the things that directors of a company have to make sure that management is taking care of.

On the people side, one of the important things that you need to do is make sure you have good succession planning practices and processes in the company. I think this is an area that Wesfarmers has always done pretty well. We've got the advantage in Wesfarmers of having a whole range of different businesses. We have the opportunity to move people around and give them a wide set of experiences which equips them for promotion later on.

We saw a good example of this I think in the last year, where we were faced with the retirement of a Chief Executive Officer and a Chief Financial Officer in the company and we were able to make those replacements internally rather then look for people outside. We have Terry Bowen retiring later this year as Chief Financial Officer and he will be replaced by Anthony Gianotti. Richard Goyder will be retiring in November as Chief Executive Officer and he will be replaced by Rob Scott.

Richard's been with the company as Chief Executive Officer for 12 years now and Rob's been with us for the best part of the last two decades. During this time, Rob has had a range of experience, most recently heading up the Industrial division, which has coal mining; chemicals and fertilisers; and industrial products.

The transition between Terry and Anthony and Richard and Rob will be a very smooth one, with them working together for the last six months of Richard and Terry's tenure. It will be a pretty seamless transition and that is what we aim to do with our succession planning exercises, to make sure that the people that replace those at any level are fully aware of Wesfarmers' culture and the expectation of the Board around all of those things I talked about with regard to sustainability.