Fletcher confirms KPMG hired to run the rule over major projects

Fletcher chair Sir Ralph Norris said the board would be refreshed as part of a normal rotation.

Fletcher Building has confirmed it has hired audit firm KPMG to review four major projects to bolster governance in its construction division.

The Auckland-based company said KPMG is reviewing its two biggest projects in the Building & Interiors construction division and the two largest projects in its infrastructure business "to augment existing governance processes". Fletcher noted speculation about the appointment after the National Business Review last week reported the accounting firm was auditing the Justice and Emergency Services Precinct in Christchurch, the SkyCity Convention Centre and Commercial Bay developments in Auckland, and another unnamed project.

"The company notes that it routinely uses a variety of external consultants across a range of disciplines within its businesses, including in the construction division," it said in a statement. "Fletcher Building remains in full compliance with its continuous disclosure obligations."

Last month, Fletcher chairman Ralph Norris said the board would be refreshed as part of a normal rotation when fronting the company's annual results after chief executive Mark Adamson was dumped. Profit slumped after two major construction projects blew out, although the rest of Fletcher's workbook is seen having positive margins.

Fletcher kicked off its boardroom refresh last week, saying John Judge, who is chairman of the board's audit & risk committee, will leave at next month's annual meeting while Kate Spargo, who has joined the board of ASX-listed Cimic Group, departed immediately. The board has started looking for replacements to expand its range of skills, especially in construction and contracting.

The company's auditor, EY, was paid $3.7 million to audit and review the 2017 accounts, up from $3.3 million a year earlier, and was paid $572,000 for other services in the year, compared to $854,000 in 2016.

The shares last traded at $7.79 and have dropped 27% this year.

(BusinessDesk)


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The initial announcement said that Spargo was retiring but now we hear she is going to Cimic/CPB, the old Leighton's. They would be the primary contender to take over Fletchers mantle as #1 contractor in NZ.

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Fletcher reverting to type!

Who can forget the orgies of fees extracted by the likes of McKinsey & Co, Boston Consulting Group, Arthur Anderson, CFSB etc etc from the numerous strategic reviews and project proposals under Hugh Fletcher.

And who can forget the mess that Fletcher got into following all those reviews?

Nothing beats a strong management team with accountability, experience and willingness to take risks, gentlemen and lady of Fletcher Building.

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They should be applying the ruler across Norris's knuckles. Repeatedly.

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More like a boot out the door!

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The problem with the likes of KPMG doing these reviews is all it is for is the inept directors so they can blame someone or something lese for the mess they have allowed to happen

What would KPMG know about their business or sector - other than what is in the text books. they end up wasting the time of the employees when they do the report and suck their brains for the answers - such answers that are already in the company. If Norris and co had of hired the right CEO in the first pace they would not have had the problem

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Hiring 'advisors" is an admission of a lack of capacity and capability. The 'advisors" are being asked to 'advise" the Directors on the core business of governance. Clearly this Board lacks the governance skills to govern.

If this Board had any ethical and moral compass it would seek a fresh mandate from the shareholders. if it was confident that the majority holders of shares backed it them no problem.

It is relying on its legal tenure of office hiding behind these skirts rather than facing up and being held to account.

Shame on every one of these Directors.

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Once Sir Ralph is able to appoint a new board to his satisfaction and high standards, with his undoubted leadership abilities, we can look forward to an ever increasing return to shareholders.....much the same as occurred under his governance both at Air NZ and Commonwealth Bank.

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You must be joking. Norris has been there 3 years and presided over the all the debacles during that time. His chairmanship has been abysmal with a total lack of oversight over the CEO, lack of oversight by the A&R Committee, lack of internal controls processes and procedures.
The governance of this company is little better than the local tennis club.

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Exactly lastmanstanding - take a look at all the CBA fall out post his tenure there !!!! Says it all. Great governance at CBA...... NOT!!!

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