Fortescue has announced a $8.5 billion net profit for the financial year, but its CEO of 6 months is stepping down.
👉 Background: Fortescue Metals Group is an Australian mining company specialising in iron-ore. While it's a public company, Fortescue founder Andrew 'Twiggy' Forrest and his ex-wife still own around 37% of the total company.
👉 What happened: Now, Fortescue has announced a $8.5 billion net profit for the financial year, but that's not what got investor-tongues wagging... It's the fact that Fortescue casually slipped into the annual results that the CEO of just 6 months will be stepping down.
👉 What else: That's the 7th senior executive to step down from Fortescue's broader group in the past 2 years. And clearly, many investors did not like this.
💡Leadership changes at the executive level can have significant consequences on share performance and investor sentiment.
💡When there are many changes in leadership, it can cause investor unrest, which almost always has an impact on the share price. In the case of Fortescue, Fiona Hicks' sudden departure led to a 5% drop in the share price.
💡Stable leadership is not only important for the daily operations but also for long-term strategic planning. If there are frequent changes at the top, it can bring into question how the company can achieve its big, hairy vision.
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