James Hardie CEO Dismissed On Grounds Of Breaching Company Values

Industry News

& Articles

James Hardie CEO Dismissed On Grounds Of Breaching Core Company Values

  • Non-executive director Harold Weins appointed interim CEO
  • Mr Truong successfully led James Hardie transformation in line with board strategic direction over past three years
  • Earnings upgrade for year to March 2022 in range of US$605 to US$625 million, compared to US$458 million FY21
  • Earnings growth driven by higher USA organic sales from residential and market growth, on increasing margins.

Background and Business Strategy

James Hardy Industries Plc (‘JHX’ or the ‘Company’) is the largest global manufacturer of fibre cement external cladding and internal lining products in North America and Asia-Pacific. Listed on the Australian and New York Stock Exchanges, the Company is headquartered in Ireland. The Company’s fibre cement products are water resistant, low maintenance and fire resistant. Importantly, in a carbon emission focused environment, these products are also lightweight. The products are predominantly used in residential construction, manufactured housing, repair and re-modelling and a variety of commercial and industrial applications.

North America is the Company’s largest and most strategically important market. JHX today has a 20 percent share of the fibre cement exterior cladding market in the US and this market share is growing steadily. The strategic importance of the North American market is that apart from being the largest in the world, housing stock in the US is ageing, in that 40 million homes are more than 40 years old. This supports consistent growth in the repair & remodel market as it takes market share from brick and timber products.

Another key driver of demand for the Company’s building products is the light-weight nature of fibre cement. This implies that it is likely to benefit from the ongoing introduction of carbon-reducing policies imposed on the building environment. This is in contrast to clay bricks, for example, which are susceptible to the negative impact of carbon-reducing policies that may restrict future demand, as the trend to lower carbon emissions gathers momentum.

Surprise departure of CEO

In a surprise announcement CEO Jack Truong has been replaced by non-executive director Harold Weins. The sudden departure of the former CEO follows employee complaints to the board regarding Mr Truong’s work-related interactions with the leadership group. According to the board, Mr Truong’s behaviour was inconsistent with the James Hardie Code of Conduct.  Specifically, the board pointed to breach of the Company’s core values, including Operating with Respect, as the key reason for the management change. Reference has been made to Mr Truong’s ‘threatening and  intimidating‘  behaviour by the board when commenting on their decision. Mr Truong will not be entitled to unvested Long Term Incentive payments and will only receive statutory entitlements.

Mr Truong was appointed to the CEO role on 1 February 2019, after the board identified the need for a CEO succession plan to lead the strategic transformation into a ‘New James Hardie‘. The board decision to terminate Mr Truong’s employment after nearly three years in the role is more surprising given the recent comments by Chairman Mike Hammes.  On 7 January 2022, the chairman observed that, ‘The transformation that has occurred over the past three years is truly remarkable. The Company now has a clear, correct and very well-defined strategy that is aligned with what the board and management identified as necessary in 2017’. This statement implies that Mr Truong’s strategic leadership capabilities were strong, and it was his ‘threatening and intimidating‘ behaviour that was the basis of his dismissal.

Higher FY22 Earnings Guidance

It is a notable coincidence that in announcing Mr Truong’s sudden departure, the board has also upgraded the Company’s earnings guidance for the financial year ending 31 March 2022. In its third earnings upgrade within a year, James Hardie expects to earn between US$605 million and USS$625 million. This compares to US$458 million for fiscal year 2021.

This earnings growth is driven by higher sales from ongoing residential and market growth in the USA , on increasing margins, supported by continuous product innovation.

In spite of his ‘threatening and intimidating’ behaviour toward senior staff, Mr Truong has left James Hardie in a strong market position with higher than anticipated earnings growth prospects.

Louis Mosmann

Louis Mosmann is a Private Wealth Client and Research Assistant at KOSEC- Kodari Securities. Louis covers macroeconomic events, global markets and ASX300 company announcements, allowing clients to make more informed investment decisions. Email Louis at l.mosmann@kosec.com.au.

Comment on this company

Latest Stories

Rio Tinto Limited Navigates Challenging FY21, Invests In Greener Future

Rio Tinto Limited (ASX:RIO) delivered its 4Q21 results today, presenting lower production……

JB HI-FI’s Preliminary Half Year After Tax Profit Down 9.4 Percent

Preliminary unaudited HY22 financial results suggest that the retailer has weathered COVID……

Long & Short Term Influences Impacting The Oil Price Outlook Ahead Of 2022

Assessing the future price of oil, an understanding of the drivers of supply……

More for you

Australian Ethical Investment Foresees Higher Cost Outflows For 2H22

Australian Ethical Investment confirm positive growth trajectory amid plans to invest……

Blackstone Raises Bid For Crown Resorts To $13.10 Per Share

Crown Resorts has announced an increased bid price for its shares from an entity……

US Inflation Data Prompts First 2022 US Fed Rate Hike In March

US Labour Department statistics chart the highest inflation rates in 40 years……

Regulatory Approval Received For Afterpay Merger With Block Inc

Australia’s largest merger deal is set to proceed after final regulatory approval……

Electric Car Batteries, Inflation, And Omicron: To Drive Commodity Prices

The electric vehicle market, along with growing concerns of inflation and……

US Cap Tech Corrections Expected, Innovation Drives Australian Tech

Analysts maintain a cautious view on US large cap tech companies for 2022……

KOSEC Terms & Conditions

Kodari Securities Pty Ltd (CAR 399556) trading as KOSEC is regulated by the Australian Securities and Investment Commission (ASIC). KOSEC is a financial services company and any information provided by its platforms, portals, reports and documents is protected by copyright. Any unauthorised production of this information is prohibited.
KOSEC reserves the right to change or remove any information provided on our website, reports or any documents including these terms and conditions at any time without notice. The change or modification to the terms and conditions will be effective immediately upon posting an updated version on our website, necessary platforms and documents. It is recommended that you review the information provided on our website, including these terms and conditions frequently for any changes.

KOSEC provides general advice only. The information provided is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. KOSEC recommends that you obtain your own independent professional advice before making any decision in relation to your particular requirements or circumstances. Please make sure you read our Financial Services Guide (FSG).

KOSEC does not guarantee any returns. Past performance of any product discussed is not indicative of future performance. (We urge that caution should be exercised in assessing past performance. All financial products are subject to market forces and unpredictable events that may adversely affect their future performance). Investing in the stock market can incur huge losses. Please also be aware that fees will incur on every transaction regardless of the performance of your investments or returns generated. Employees and or associates of KOSEC may hold one or more of the stocks, securities or investments reviewed by the company.

Your use of information from our website, reports, documents and from talking to our representatives/associates is at your risk. Under no circumstance should the investment be based solely on KOSEC information and general advice. You should seek professional financial planning advice.
KOSEC aims to maintain the accuracy of the data and information provided on this website, by using information prepared from a wide variety of sources, which KOSEC to the best of its knowledge and belief, considers accurate and does not make any representations or warranties of any kind, expressed or implied, about the completeness, accuracy, reliability, suitability or availability of the information provided.

We may at times refer to third parties, which the details of these third parties have been provided solely for you to obtain further information about other relevant products and entities in the market. KOSEC has no control over the information third parties have, or the products or services offered, and therefore make no representations regarding the accuracy or suitability of such information, products or services. You are advised to make your own enquiries in relation to third parties. Our inclusion of any third party content is not an endorsement of that content or the third party.

As a client you will be charged a yearly service fee and a set brokerage fee per transaction. Your service fee will automatically renew at the end of your agreed 12 month period at the same rate advertised at the time. Your credit card or bank account will be charged for a further year following which will again auto renew until you cancel your yearly service fee. You can cancel the auto renewal at any time in advance of the renewal date by contacting us. KOSEC is aware of the need to ensure the security of your credit card details and our payment systems are compliant with the Payment Card Industry (PCI) Data Security Standard.

You consent to receiving email correspondence from KOSEC, as well as companies KOSEC has an association with. These emails will be sent by KOSEC and third party companies. You can opt out of receiving any category of emails at any time by contacting us. We may from time to time inform you of special offers, or even ask your opinion of the services we provide, but your involvement is optional. Should you request us to do so, we will archive your details.

Indemnity and Liability
You indemnify KOSEC from all claims or threatened claims, suits, demands, damages, costs as well as including legal costs incurred in dealing with any threatened claim, expenses made by any person or corporation against KOSEC and any other amounts which is caused by KOSEC providing information, execution and General Advice.

You hold KOSEC harmless and release it from any liability in respect of any loss, harm or damage arising from a decision made by you on the basis of information obtained through the use of our portal, reports, documents or any General Advice given and any transaction taken place.

You hold KOSEC harmless and release it from any liability in respect of any loss, harm or damage arising from delays in executing orders for the client and acknowledges KOSEC makes no guarantees about the time taken to execute an order on behalf of the client. You acknowledge that KOSEC relies on third parties in providing technology and release KOSEC from any harm, loss or damage you may suffer as a result of the failure of such information technology.

Cookies and Links
KOSEC website, and its portal uses cookies, which lets us identify your browser while you are using the site or our portal. Cookies do not identify you personally. They simply allow us to track your usage patterns. If you prefer not to receive cookies, you can configure your browser to reject them or to notify you when they are being used. The functionality of the KOSEC website may be impacted if you restrict the use of cookies.

Fill up the form below and we will get back to you as soon as possible.



KOSEC’s CEO, Michael Kodari’s new book, “Stock Market Success” valued at $39.95, available at Dymocks book stores with all the proceeds going to Dymocks Children’s Charities.


Latest TV Commercial