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Gold/Mining/Energy : GEAC.....Canadian best kept secret -- Ignore unavailable to you. Want to Upgrade?

To: Praxis who wrote (1419)	9/13/2000 10:07:18 PM
From: john.d	Read Replies (1) \| Respond to of 1571

Geac directors kept CEO on short leash Good corporate governance left at boardroom door Rod McQueen, Senior Writer Financial Post A year ago, Doug Bergeron looked like just the activist boss needed by Geac Computer Corp. After five months as chief executive of the Toronto-based software provider, he'd replaced seven of the 10 top executives and made five acquisitions that would double annual revenues to more than $1-billion. Share price, $22 when he arrived, had risen to $38. Today, earnings are soft, share price has plummeted to the $10 range and the company is for sale. Mr. Bergeron, 39, was left yesterday with little to say but make brave noises to analysts during a conference call and to shareholders at the annual meeting. "Our pipeline of opportunities is quite full," he said. "The dark storm clouds appear to be passing." Despite his optimism, Mr. Bergeron has run out of time. Last month, Geac received two unsolicited offers to buy all or part of the company. A data room will soon open so that any interested bona fide party can peruse the books. On the face of it, Mr. Bergeron looks like a miserable failure. But the fault is not his alone. This is a classic case where there is plenty of blame to go around. The Geac board is a dysfunctional body that would not let Mr. Bergeron get on with the strategy that the directors themselves had approved. Geac has long been known as a consolidator, one of those acquisitive companies that buys poor performing firms, picks the bones clean and adds the choicest cuts to the larder. A previous chief executive, Stephen Sadler, made 40 such acquisitions during his 10-year regime. After Mr. Sadler quit in 1997, he was replaced by Bill Nelson who lasted two years before being fired by the board. Although Mr. Nelson received a severance package, he did not depart. He stayed on as chairman, a situation that may not be unique but one that is certainly unusual. How do you say goodbye to someone who doesn't leave? Still, Mr. Bergeron and the other members of management believed that they had the board's consent to change the previous vision that had mostly been about buying junkyard dogs. "A lot of new CEOs spend a lot of time working on strategy and vision and not a lot of time on execution," Mr. Bergeron told me last October. "I wanted to get the vision articulated fast and clear and that was, basically, we're not just a buyer of troubled companies, we're a consolidator of good growth companies in key markets that we see are fragmented and ripe for consolidation. We are going to be a multi-billion company." At the time, however, Geac's first priority was getting through the Y2K frenzy. Once New Year's Eve passed without incident, the Geac board held a January meeting at an airport hotel in Tampa, Fla., where the directors seemed to arrive at a consensus about the future. Geac, according to the agreed-upon strategy, would become more growth-oriented, conduct its own research and development, hire additional sales staff and focus on specific e-commerce solutions such as software for newspaper publishing. Yet every time such a proposal came before the board, the directors would either refuse approvals or defer their decision. Too many of the directors, despite their apparent agreement in Tampa to embrace the new economy, seemed stuck in the old economy. Such action by directors is a far cry from what constitutes good corporate governance. Good corporate governance is about discussing strategic possibilities and agreeing on a direction, then letting management proceed while the board monitors results. This board, by contrast, became mired in minutiae and tried instead to run the company. Audit committee meetings, for example, would wander along all day. Selling Geac wasn't supposed to be the outcome. Mr. Bergeron had hoped to grow Geac to be large enough so that it could not be readily swallowed. "Good companies should always be considered for sale," he said last fall. "You get to the point where it's tough to eat you. The number of acquirers of billion-dollar companies is few. If the opportunity presented itself, we would evaluate it. I've got a lot more things I'd like to do in my life." Well, he got that part right.

To: Praxis who wrote (1419)	9/14/2000 7:33:04 AM
From: dug_s	Read Replies (3) \| Respond to of 1571

Praxis: Sorry if I over stated the sentiment in the article. Regardless, it was not very enthusiastic. The one point that I still find unsettling is: "Without the gain, Geac would have had lost 5¢ a share." I realize that GAC is a buy, re-shape, sell type of operation. However, when you run out of things to sell your earnings are going to get crushed. I would like to see more earning's strength from their day to day operations (as I am sure we all would). Dug S.