Thursday 1st December 2016
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Michael Daniell, the former boss and current director of Fisher & Paykel Healthcare, has won the New Zealand Shareholders Association’s 2016 Beacon Award for guiding the company from a tiny startup with a handful of staff to a recognised world leader in the production of respiratory care and sleep apnea devices.
The annual award is given to someone who demonstrates outstanding performance, including leadership, corporate governance, and respecting the rights of all shareholders.
NZSA chairman John Hawkins said Daniell’s long career with the company was a “remarkable story of dedication, drive, and determination which has taken F&P Healthcare to the very pinnacle, including being named Exporter of the Year in 2015.”
It’s hard getting a man as modest as Daniell to say much about himself, he prefers talking about the people at F&P Healthcare where the culture of treating others fairly and an export vision was inculcated by the founders Maurice Paykel and Woolf Fisher and drummed into him by his mentor, Dave O’Hare, the company’s former medical division head.
He said the award recognises that F&P Healthcare’s people, “including myself as a small part of that, will do the right thing, the right thing for the business and for all the other people including shareholders.”
The right thing, he said, is acting with integrity and honesty.
Daniell spent 37 years with the company, retiring as chief executive and managing director in March this year though he has remained on the board as an independent director.
He said he had no problem separating the role of management from that of corporate governance, given he already had experience as a director of Tait and as chair of the governance board at the University of Auckland’s Medical Technology Centre of Research Excellence.
He wouldn’t mind picking up one more directorship but wants to avoid getting too busy so he can finally do the things the chief executive of a fast-growing global company never finds time for – things like taking photos and building computers in his garage as retired electrical engineers do.
F&P Healthcare was global from day one. Daniell recalls the majority of the $250,000 annual revenue when he joined in 1979 came from outside New Zealand.
Today the medical device maker is forecasting a record annual result for the 2017 financial year of $880 million revenue and profit in a range of $165 million to $170 million. The target is to grow to a $1 billion revenue company but Daniell said once that first target is hit, it should immediately aim for $2 billion given its low penetration in a huge potential market.
It has expanded the range of medical conditions its devices cover from respiratory to surgery and Daniell said it had so far only penetrated around 10 percent of how many patients could be treated by its products each year. With an ageing population and financially-strapped healthcare organisations looking for cost efficiencies, F&P Healthcare is well-placed to meet that growing demand, he said.
Achieving big ambitions is do-able from New Zealand, which he said is not as geographically distant as people think given the working day overlaps with Asia and North America which are just one flight away. He points to a number of high-tech companies on the annual TIN100 list that are poised for big global growth in the next few years and have the key factors to do so: the drive, good technology that meets a consumer need, and the right people. Beyond people, one of the keys to F&P Healthcare’s success has been the 9 percent of revenue spent annually on research and development to stay at the forefront of its industry, he said.
As to the rise of shareholder activism in New Zealand, Daniell said it was good to have an organisation such as the NZ Shareholders Association representing retail shareholders who often don’t have a particularly strong voice. He said when running the medical device maker who had hundreds of meetings with institutional and other shareholders and had a good understanding of their view.
“It doesn’t mean you do everything they want you to do. We have to think about the long term,” he said.
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