Page 65 - Stakis Consolidated Teaching Note

By 1986 the company which had been developed by the
now ageing Sir Reo was facing the question of finding a

replacement. A number of replacements were suggested

for the post but none was found to be suitable. These
included the long serving Managing Director, John

Loughray who might reasonably have expected to be

considered for the post. Sir Reo and his son Andros at this

time increased their shareholding in the company giving
rise to speculation that it had always been their intention

to promote Andros to the premier executive position. The

outcome was, as was expected, selection of Andros by his

father as the new Chief Executive. Inevitably, this led to a
disunited board.

Andros immediately set about changing the board by
introducing his own appointed managers and non-

executive directors. The result was a cultural split on the

board. It may have been this split which in the end proved

too dysfunctional to allow the long term survival of Andros.

The power of Andros on the board at this time is

highlighted by the ease with which he pushed through the

decision to embark on the construction of the Country
Court Hotels project without the groundwork being fully

prepared or presented to the board. The questions here

are simple ones. Should a Chief Executive have such power
without appropriate constraints? Should he be allowed to

load a board with non-executive members to such an

extent that they outweigh the executive members? Andros

in this period had absolute power with little effective
resistance to his decisions.