James Hardie sacks CEO Jack Truong alleging code of conduct breach

Building materials manufacturer James Hardie Industries (ASX: JHX) has removed its CEO Jack Truong after employees repeatedly raised concerns regarding his conduct in the workplace.

In an ASX announcement made today, the group's board said it had conducted due diligence into allegations made about Truong's behaviour with the help of external lawyers and consultancy, claiming to have given him "opportunities and support for sincere change".

After receiving additional employee complaints about Truong, the board conducted third-party consultant surveys and analysis, and also received direct input from executives.

It concluded his conduct was not discriminatory, but alleged it “extensively and materially breached the James Hardie Code of Conduct."

Truong was hired as president of international operations in 2017, and was eventually promoted to CEO in February 2019.

“It has been a privilege to serve as CEO of James Hardie,” said Truong.

“I was appointed with the goal of creating and executing a strategic transformation of the company. We exceeded all expectations. In less than three years, James Hardie’s sales and profits grew substantially and its share price more than tripled.”

“I’m equally proud of the progress we made in building a culture of inclusion and respect with our more than 5,000 devoted employees. Based on employee and customer feedback, it was clear that they recognised our progress. I was blindsided by the termination and unequivocally reject the assertions made by Mr. Hammes and the company.”

As a result of the termination, Harold Wiens has been appointed as interim CEO.

“Harold is well placed to step into the role, and lead James Hardie as the board conducts a global search for a permanent CEO,” said chairman Mike Hammes, who has been appointed as executive chairman while the succession takes place.

A previous executive vice president at multinational conglomerate 3M, Wiens joined the board of James Hardie Industries as an independent non-executive director in May 2020.

“Harold has been a wise and insightful board colleague reflecting his time as a senior international executive, that was evident as we have worked to refine and oversee the implementation of our strategy.

“We are fortunate that he is able to take on these responsibilities.”

Sean Gadd will also take the helm as president of James Hardie’s North American operations.

Per the terms of Mr Truong’s contract, his on-foot incentives, including unvested long-term incentives, will lapse. He will only receive statutory entitlements.

Shares in JHX fell by more than 4 per cent to $51.54 per share by the market close today.