Page 77 - Stakis Consolidated Teaching Note

Sir Reo & Andros Sir Lewis & David
1988 - 1991 1991 -
Stakeholders (banks)
Sir Reo & Andros are select Sir Lewis to turn
major shareholders the company around

Sir Reo is Chairman who selects Sir Lewis appoints David Michel
his son as Chief Executive Strategic drift develops
leading to financial and
corporate troubles
Andros appoints his own men David Michel creates a small
to the Board creating friction. but stable board operating to a
Managers start to function cost based strategy founded on a
independently return to core businesses

Family Based Business Professional Management

Figure 9

By 1994 the board essentially comprised some six

members - Michels, Chisman, and Sir Lewis; two non-

executives and Sir Reo (See Figure 10) who was now 82

and took no effective role. Paradoxically, the structure of
Stakis under the stewardship of Sir Lewis Robertson and

David Michels had reverted to a similar flat structure

evident prior to Andros’ stewardship. The difference being
that tight financial control was exerted from the centre

with little duplication of functions and concentration on

core business activities. Under Andros and Sir Reo there
was clear strategic drift with divisions entering and leaving

the portfolio e.g. in 1988 there were five divisions. By 1994

under David Michels, there were only two divisions (See

Figure 3).