CHAPTER 22
Rio Tinto takes its name from the famous red river of Andalusia whose mines had supplied the Phoenicians, Greeks, Carthaginians and Romans with copper and iron since time immemorial. According to local legend, they even supplied the empire of King Solomon and could justifiably claim to be the fabled King Solomon’s mines.
By 2002, Bob Wilson had risen to the chair at Rio Tinto after a golden run as chief executive. Born in suburban Surrey, Wilson studied economics at Sussex University. He began his career in 1966 as an economist at Dunlop – a move he later described as ‘my first career mistake’ – but soon moved to Mobil Oil. He then joined RTZ in 1970 as a financial analyst before switching to operational duties, running the European zinc and lead smelting subsidiaries.
Wilson played a key role in all of Rio Tinto’s major strategic developments, recognising the potential of the Escondida copper mine and negotiating RTZ’s 30 per cent stake in 1985, and then acquiring BP Minerals in 1989. As chief executive, he orchestrated the dual-listed merger between RTZ and its Australian subsidiary CRA in 1995, which created the modern Rio Tinto. 1
‘I became chief executive of RTZ in 1991,’ Bob Wilson says, speaking for the first time about the controversial merger that had so infuriated Don Argus. ‘RTZ owned 83 per cent of CRA in the early 1970s but had agreed with the Australian Government to dilute that percentage over time to 49 per cent. RTZ had traditionally been a bit more of a mining finance house than a mining company, but following the acquisition of BP Minerals it suddenly owned a lot of directly controlled operations. From that, it was going to be clear – clear to me, anyway, and getting increasingly clear to some people in CRA – that we were going to be treading on one another’s toes a bit because RTZ was now a mining operator and a mining company focused particularly and solely in that sector with global aspirations. Basically, we needed to work through what this meant for RTZ and CRA and how they would work together and how that relationship was going to work in the future.
‘A few of us had been thinking about it and talking about it for a little while. Then, fairly early 1995, RTZ did a deal to get into the other major copper discovery of the last 50 years. It had already got into Escondida, so the next one was Grasberg, which Freeport McMoRan had in Indonesia.’ 2
In early 1995, Rio Tinto and Freeport established a joint venture under which Rio Tinto became entitled to 40 per cent of additional production as a result of the expansion of the Grasberg mining project in West Papua. ‘We did a very attractive deal which in a way served to crystallise the potential issue between RTZ and CRA,’ Wilson says. ‘The operation was up there in West Papua, traditionally CRA’s doorstep – they’d never even had a look-in at a deal there. It became clear from both sides that not only were we heading for a potential conflict of interest but it was also going to be a problem for CRA’s aspirations, certainly outside Australia, if we couldn’t find a constructive way to resolve this.
‘It was also clear that, as RTZ and CRA were both substantially focused on mining, it would make sense in terms of rationalising the areas of overlap where we were wasting effort in terms of some of the overall research effort in identifying opportunities.’
Discussions about a merger began after the then CRA chairman, John Uhrig, asked Wilson if RTZ were prepared to make a takeover offer for the minorities. ‘He wasn’t saying he wanted that to happen but were we prepared to do that?’ Wilson says. ‘My answer was no. I actually wanted to retain the best of both companies, including Australian quotation of CRA and CRA management. We then spent six months between us, looking at various ways of how we might proceed, and we came up with a modernised version of the dual-listed structure that Shell and Unilever had used before; it had some characteristics of both of those, but we also said, “Surely they wouldn’t design them quite that way if they were designing with a clean sheet of paper today. What would they do differently?” We said, “Surely there has to be one head office, rather than multiple head offices, otherwise you don’t get a coherent management. Surely there has to be the same members of the boards of both companies or potentially you get a rather chaotic decision process, or a very bureaucratic or politicised one. So let’s have the same directors of both companies.”
‘We looked at what’s a modern-day version of the way those guys set things up 80 years ago in those companies. I think we did get it pretty well right. The issue then was if we are going to merge these companies on a non-premium basis, I – Wilson – don’t have a problem selling this to my shareholders. The problem is going to be selling it to the CRA shareholders and the Australian Government.’ 3
The burden of that argument wasn’t actually carried by Wilson – the hard work was done by John Uhrig, who was chairman, and Leon Davis, who was chief executive of CRA, in persuading those constituencies that this was the right thing to do in the interests of Australia and the Australian shareholders. ‘They bore the brunt of carrying the argument, which they did very effectively,’ Wilson says. ‘Hindsight has shown them to have been right because the benefits to shareholders that flowed through in subsequent years were very, very considerable.’ However, Wilson agreed that national self-esteem had suffered ‘in the eyes of people like [Peter] Costello’ from moving the head office from Melbourne to London.
‘There was a famous cartoon which had the lion carrying off the kangaroo in its jaws,’ Marc Gonsalves recalls. ‘Reference was made repeatedly to me about it. On every one of Billiton’s forays into Australia, which weren’t without controversy, that was dusted off and metaphorically pushed into our face.’ 4
The merged company started off with a name that both Leon Davis and Bob Wilson detested. ‘We found it pragmatic to compromise and call the company RTZ-CRA – a ridiculous name, and we knew it was ridiculous, but there were sensitivities about retaining individual names and the link with the past,’ Wilson says. ‘We moved away from that as soon as we could and called the two companies Rio Tinto plc and Rio Tinto Limited.’
Wilson was due to retire in 2003 after reaching Rio’s mandatory retirement age of 60. In London on 4 July 2002, just four days after he had officially assumed full powers as chief executive, Brian Gilbertson made contact with the veteran miner (designated ‘C6’ – chairman of Rio Tinto – in Gilbertson’s code) about a possible merger. 5 According to insiders, his unsolicited overture was well received at Rio headquarters in St James’s Square, providing a happy augury for the new BHP Billiton regime and its ambitious chief executive. It was not, however, a scheme that could be announced to the markets, where there were gloomy predictions, following the disappointing third-quarter figures, that Gilbertson would preside over a poor profit performance for the year ended 30 June 2002, the merged company’s first full-year results.
In the event, Gilbertson astonished the doomsayers by unveiling a net profit of $US1.7 billion net ($3.18 billion), a rise of 10.5 per cent over 2001. In briefings beamed by satellite from Melbourne to Sydney, London and Johannesburg, he declared that BHP Billiton had overcome the worst economic conditions in a decade to record steady cash flows of US$3.9 billion after paying all interest and taxes.
These figures had been achieved despite a commodity-price slump – notably in oil, aluminium and copper – that alone slashed $US665 million off revenues. As outlined in his strategic-framework speech, the merged company had demonstrated its extraordinary resilience by coming through the economic turbulence relatively unscathed. 6
Gilbertson had also been lucky. He had merged Billiton with BHP before the stock market slumped in the wake of the 9/11 terrorist attack on the World Trade Center and in advance of a new Mineral and Petroleum Resources Development Act that almost halved the value of South African mining assets. ‘Due to his excellent timing, shareholders in the company that Gilbertson formerly headed ended up owning 42 per cent of the merged group,’ analyst Ivor Ries declared at the time. ‘Yet the 2002 accounts revealed that the operating-profit contribution from the former Billiton assets amounted to just 34 per cent of the group total. Given the plunge in the value of South African mining assets over the past 18 months, BHP today would be able to buy Billiton for significantly less than the $19 billion it agreed to pay early in 2001.’ 7
The dark mutterings of the old boy network about the ‘unfair’ equity split rumbled anew in the saloons of clubland. ‘Some people live in the past. Once it’s done, it’s done,’ the pragmatic Mike Salamon comments, ‘but there are people who try to keep the score.’ 8 Don Argus concedes that the deal left ‘some pretty bad scars’. ‘When the merger was done,’ he says, ‘there was a certain investment bank in London walking around saying, “This is a reverse takeover.” The reality was it was a 60/40 split and it’s still a 60/40 split.’ 9
There were also murmurings about Brian Gilbertson’s ‘autocratic’ style of management. At Billiton, he had been chairman and chief executive, answerable only to his shareholders – a set-up that appealed enormously to his entrepreneurial instincts. BHP Billiton, however, had a hands-on chairman in Don Argus, who was naturally determined to avoid the meltdown that had occurred through the slew of bad offshore investments in the 1990s. ‘The challenge for Gilbertson will be in translating his entrepreneurial and fast-moving management style into a much larger company with a very different governance structure than the one he grew up with,’ Ivor Ries noted. ‘If he succeeds, other mining houses had better watch out.’ 10
Gilbertson maintains he had no difficulty making that adjustment, despite later assertions in the press to the contrary. ‘The company was very well run,’ he says. ‘We were organised into production units and each one had a very good chief executive running it. Chip Goodyear and I were sitting in the centre of the organisation like the conductor leading the orchestra, but the orchestra didn’t need much leading. The iron-ore business was running very well; the copper business was running very well. We made a couple of key decisions from the centre, but essentially the company was in great shape. It didn’t need fixing; it wasn’t broken.’ 11
Gilbertson reported to shareholders that savings of $500 million had been identified and were being achieved, while Chip Goodyear confirmed that the vision of a diversified, cash-flow-generating machine had become a reality.
One of the things that symbolised the difference between BHP and Billiton attitudes was air travel. Gencor had maintained a fleet of aircraft that were used to fly staff to its mines scattered throughout South Africa. When the company moved further afield into Mozambique, Australia and South America, Gilbertson procured a long-range jet, starting with a Falcon and then a Global Express. BHP, on the other hand, dispensed with the company Gulfstream during its period of austerity.
‘Don Argus made a point of never flying in the company jet – he’d use commercial airlines,’ Gilbertson says. ‘The impression was created that this was there for my convenience. In fact, that wasn’t true – my usage of the plane was relatively low compared with people such as Mike Salamon, for example, who had a very broad portfolio. He could do a tour of South Africa and South America in two or three days rather than two weeks by having his own plane on tap. Anyway, the furtherest it got in my day was a request as to whether we really should have these planes and whether they were justifiable.’ 12
Mike Salamon, who had an apartment in Melbourne, a house in Johannesburg and a third home in Surrey, where his wife and children lived, was an outspoken advocate of corporate jets. ‘I was living in three countries,’ he says. ‘I slept on planes for a hundred nights a year for years. When we did the integration, I used our big plane like a bus. I went all over the place to talk to the management teams because I was writing the integration. I’d be in Melbourne on Friday, all over South America for Saturday, Sunday, Monday and back to Melbourne on Wednesday for a board meeting.
‘In any event, the directors – in particular the ex-BHP directors – felt that it was inappropriate for companies to have such accoutrements, so we had to sell them all. Because BHP had gone wrong, they went through this period of cutting costs, [yet] to do our jobs properly you had to show your face in the trenches regularly.’ 13
By now, Project 6 was already well advanced. Despite later claims about a lack of consultation, 14 Gilbertson says he kept key executives apprised of his every move. ‘There were follow-up meetings [after Danesfield],’ he says. ‘Minutes of these meetings went to members of the board.’
Asked whether Gilbertson had discussed the Rio merger with him at any point during 2002 following the Danesfield meeting, John Jackson replied, ‘Yes. Brian never had any doubt about the industrial logic [of a merger]. I think he was pretty certain that it would be strongly blocked by Don, partly because of The Don’s Australian blood.’ 15
Meanwhile, Gilbertson was spending much of his spare time keeping in shape. ‘I bought my most expensive bike in Melbourne and I used to go cycling,’ he says. ‘They had an around-the-bay race which happens once a year [in October]. It’s 200 kilometres, which is a serious bike ride, at least for me. I agreed to do one leg of it – 100 kilometres – and get someone to come and take me back. But it didn’t work that way. There was supposed to be a bus that brought me back but when I got there the bus was going to be another six hours, so I cycled back. I did the whole bloody 200 kilometres and I nearly died.’ 16
On 23 October, there was a farewell party in Melbourne for Paul Anderson. Then, a week later, Gilbertson gave an address entitled ‘Investing in Risky Geographies’ to members of the Melbourne Mining Club in which he turned conventional wisdom on its head by demonstrating that investing in politically stable places such as the United States (Magma) could be more dangerous to shareholders than investments in countries that apparently epitomised risk, such as Mozambique (the first Mozal aluminium smelter) or Chile (the Escondida copper mine).
‘I was still trying to dampen investor and press concerns that the merger had traded good, safe BHP assets for risky Billiton ones,’ he says. ‘The strategy was to direct BHP’s hard cash into Billiton-generated projects with the goal of achieving a 15–25 per cent return on a capital investment of US$10 billion and thus double the company’s earnings.’
There were many clues in Gilbertson’s exposition to his thinking and it set the hares running. BHP Billiton’s balance sheet and cash flows had been so healthy that he could afford to mount a US$10 billion takeover bid without raising a sweat. The question was: which way would he jump – acquisition or merger?
There was also the question of the composition of the board, which had been slimmed down from 17 directors to 12, just two of whom, Gilbertson and Goodyear, would be executives. Derek Keys, having turned 70, had already departed, and John Jackson, who was three years older than Keys, was the next to go. ‘The last thing I did for Billiton,’ Jackson says, ‘was on Monday, 4 November 2002 when we had the AGMs and we ran them with a video link. BHP was meeting in Melbourne; Billiton was meeting in London. I chaired the London meeting.’ 17
The following day, the Gilbertsons were at Flemington to watch Media Puzzle win the Melbourne Cup. There were no visible squalls on the horizon, but a few short weeks hence the media would be puzzling over what exactly had happened to cause a sudden and traumatic breakdown in the relationship between the South African chief executive and his Australian chairman. For in that short period, Project 6 would hit the rocks and sink, leaving wreckage scattered through the corporate surf.
It had all seemed so hopeful.
There was agreement between the negotiators that one of the iron-ore assets owned by the BHPB and Rio might have to be sacrificed if government regulators raised objections; that would bring the value of the merged entity down below the US$100 billion mark, but it would still be close to it.
In the early stages, Bob Wilson talked about bringing in a third party to take the oil-and-gas assets; indeed, Lord Renwick still believes ‘that in the event of a combination Rio would have wanted to see the oil-and-gas business spun off’. 18 However, Brian Gilbertson maintains that BHP Petroleum would have remained an integral part of the merged company’s diversified portfolio.
Gilbertson says he was willing to stand down as chief executive, but it was agreed that he would become chief executive of the merged company, with 55-year-old, Adelaide-born Leigh Clifford of Rio Tinto nominated as his successor: a nice compromise in that the chief executive officer’s job would revert to an Australian for the first time since John Prescott had stepped down in 1998.
Clifford trained as a mining engineer before joining CRA in 1970. In 1995, he was seconded to London to work on CRA’s merger with RTZ. Clifford returned to Australia with Rio Tinto for several years but found himself back in London in 1999 and in 2000 was promoted to chief executive.
The question of Gilbertson’s successor was decided at a meeting between the parties in Melbourne on 18 November 2002. There were, however, governance issues about the composition of the board to be finalised. The scene then switched to London, where, on 27 November, Brian Gilbertson and Bob Wilson held a crucial rendezvous prior to the BHP Billiton board meeting the following day.
According to Gilbertson, Wilson saw the merger as an attractive opportunity and felt that if it could not be done now it would never be done. As he planned to retire shortly, he would not seek the role of chairman of the merged company, which raised the question of who would become chairman. Not Don Argus, apparently: his strident view – that RTZ had ‘pinched’ CRA – would not have endeared him to Rio’s upper echelons in St James’s Square. ‘The chairmanship was an issue,’ Gilbertson says. ‘And the Rio directors were also concerned to see that the synergies we had promised would be delivered.’ 19
That night, Gilbertson told Don Argus, who had just arrived in London, that Rio Tinto was prepared to return to Australia, or, in his emotive phrase, ‘the prodigal son comes home’.
Project 6 was still extant the following day – 28 November – when Chip Goodyear reported to the board at its meeting at BHP Billiton’s ultra-modern London headquarters at Neathouse Place, Victoria, on the shareholder value that would be released in a merger with Rio Tinto. Gilbertson told the meeting that Gresham Partners had been retained to report on financial issues. Bob Wilson’s points of concern were listed under four headings:
• Petroleum.
• Anti-trust.
• Synergies.
• People.
The board agreed that Project 6 had merit. ‘Brian reported to the board that he’d talked to Bob Wilson about a combination,’ Lord Renwick says. ‘But I think he triggered this discussion of merging with Rio too soon and also on a basis which wasn’t going to be acceptable to the Australian side, and that led to this eruption.’ 20
Renwick confirmed that Rio Tinto had wanted a new chairman. ‘This was unattractive to Don; it was unattractive to the Australian directors,’ he says. ‘The rest of us were not against a merger with Rio – we could see the benefits – but it was raised in a very abrupt way. There was nothing wrong intrinsically with the Brian vision. Raised in the way it was, I thought there was an inevitable difference of opinion which was bound to develop because the non-Australian directors for the most part could see the attractions of this thing, [but] everybody is influenced by where they come from, so the Australian directors naturally were less impressed, and, of course, there was a long history of not-very-good-relationships between BHP and Rio over the Rio acquisition of CRA and also tussles about iron ore in Western Australia. There was a feeling in Australia that CRA was supposed to be in a merger with Rio but it ended up effectively being a Rio takeover. I did hear from both sides that there had been a fair amount of friction between old BHP and Rio.’ 21
That evening, Gilbertson and Argus came face to face again when the directors attended a farewell party for John Jackson at the Design Museum on the Thames, opposite the Tower of London.
‘We’d had the board meeting,’ Gilbertson says, ‘and the major issue was the top two posts in the merged company: CEO and chairman. Bob Wilson was not looking for either position, and I was prepared to step down but Don said he was not prepared to be traded.’ 22
The man most favoured to take the chairmanship, we can reveal, was 52-year-old BHP Billiton director Michael Chaney, the Perth-born son of Sir Fred Chaney, a navy minister in the Menzies government and later administrator of the Northern Territory. Michael was educated at Aquinas College and the University of Western Australia, and had completed the Harvard Business School’s advanced-management program before working in the finance and petroleum industries in Australia and the United States. Concurrently managing director of Wesfarmers and a director of Gresham Partners, he was one of the stars of the Australian business community. 23
At the Design Museum, amid the clink of champagne glasses and the buzz of social chatter, Gilbertson and Argus agreed to meet the following day to discuss how to conduct the negotiations with Rio and to define the boundaries of future negotiations.
However, Argus had not been a party to the talks to date and he made it clear to Gilbertson that he had no intention of yielding his position. As he had said at the board meeting, ‘Why not make the CEO the lightning rod and not the chairman?’ He also wanted to see BHP Billiton properly bedded down before making any more big plays. John Jackson recalls that Gilbertson seemed ‘unhappy’ at the party, although he was unaware of the reason.
Without informing Gilbertson, Don Argus then called Bob Wilson. ‘I suggested to Bob that in the world I come from, normally chairman to chairman sit down and talk about any proposed merger,’ Argus says, ‘and I thought it would be a good idea if he and I sat down and talked about this particular initiative.’ 24
On 29 November, Argus met Wilson. ‘That’s when the thing all started to unfold,’ Argus says. ‘Then I had a phone call with Mr Gilbertson, and it probably would have been one of the most unpleasant phone calls I’ve ever had in my life.’
Asked to describe the content of the call, Don Argus leans back in his chair in the Copper Room. ‘Oh, I won’t go down that path,’ he says. ‘Clearly, there had been some discussions about a potential merger with Rio and BHP Billiton at the time, but not many of the board members were privy to those discussions.’ 25
Brian Gilbertson says he had always been conscious of the need to take board members with him in every mergers-and-acquisitions situation. ‘I briefed Don Argus after every meeting with Rio and the board at every board meeting,’ he says. ‘I also did the occasional note for the board – maybe I should have phoned every board member after every meeting with Bob Wilson.’ 26
Says Mike Salamon, ‘The most challenging part of these big deals is what they call “social issues”. The social issues are the key board members and the key executives. What happens to them and how are they perceived in history? Those are very important things at the time of doing a deal. You had some pretty big personalities around the table who were not always going to agree about things.’ 27
Gilbertson then phoned Bob Wilson, who told him that Don Argus did not have much enthusiasm for a deal, that he wasn’t up for it and that he felt the whole thing was too hard. The biggest merger in the industry’s history had effectively been torpedoed. ‘It was in the bag – we would have been heroes in Australia,’ Gilbertson says. ‘We hadn’t written the agreement, but everything pointed in the right direction. Under different circumstances, I think Don would have been in favour of the deal.’ 28
By 2008, time and geography had not quite succeeded in merging the endeavours of Brian Gilbertson and Sir Robert Wilson but physically they were indeed very close. Wilson was working as chairman of the BG Group (formerly British Gas) at 108 Jermyn Street, just a couple of blocks from Gilbertson’s Pallinghurst Resources at no. 54 in the same street, a fluke that both men found amusing.
The smart but totally anonymous offices of the BG Group are sandwiched between a men’s outfitters and a shoe shop. Wilson’s spacious sixth-floor office overlooks Piccadilly. He is of medium height, a dapper dresser with neatly brushed grey-flecked hair, blue-checked shirt, autumnal tie, light tweed suit. He had vowed not to talk about BHP Billiton but, aware of his role in these momentous events, he relents and discusses them for the first time.
Asked whether Brian Gilbertson had approached him in July 2002 about the possibility of a merger between Rio Tinto and BHP Billiton, he replies yes.
Gilbertson seemed to think those talks were going quite well. Would that be your take on it?
Yes.
There was a crucial BHP Billiton board meeting in London in November 2002 when Don Argus was apprised of the fact that possibly a change of chairmanship was in the offing. We understand he contacted you and was somewhat abrupt.
Wilson laughs heartily.
Is that a fair summary?
That’s a fair summary.
There was another name mentioned in terms of the chairmanship: Michael Chaney. Would that also be a reasonable thing to say?
Not as a part of any discussions I had. [Brian Gilbertson insists Chaney’s name was in fact discussed.]
But a new chairman would have been a requirement if the combination had proceeded?
Umm, I’m not sure that the conversation had really got that far, quite honestly.
How far had it got?
I think that it was beginning to touch on some of those questions. Who’s going to be doing which jobs? It was fairly close to when I intended to retire. I told both Brian and my own board that I didn’t intend to have this become the basis for me staying on if it went ahead. And that caused some problems with my own board. ‘Well, we don’t think you should be doing this unless you commit to staying on to see it through’ was the view of some of them. This was not a discussion I’d had with Brian at that point and there were also issues ... If it is going to be a BHP condition – a Don Argus condition, not a Brian Gilbertson condition – about where the head office of this company should be located, I think that was going to be a problem. The head office should be where the head office should be.
The Rio board would have preferred it to be in London?
Not necessarily. I’d spent quite a lot of time thinking about a number of alternatives, one of which was Sydney, none of which was Melbourne. One of which would have been the west coast of the States. Basically, in my view, there were three options: one would have been Sydney, one would have been London and a third would have been somewhere like San Francisco. I don’t think I’d had that discussion with Brian. I can’t be certain whether I did or not, actually, because it’s quite a long time ago.
Brian Gilbertson seemed to think there was scope for movement: that the head office could move from London.
For me, it’s a pragmatic decision: where is going to be the best place to run the business?
Why Sydney not Melbourne?
I see Sydney as being more outward-looking, better communications also to the outside world.
Melbourne would be considered to be the traditional home of the mining companies.
Yes, but it’s not particularly well connected to the rest of the world. There is now a notably different quality of transport availability out of Sydney compared with Melbourne. It hasn’t always been quite as notable as it is today. Also, I think if the two companies were to get together there was some merit in an entirely new location.
It seems the idea was that Brian Gilbertson would stay for a little while if this happened and that Leigh Clifford would then take over as chief executive.
That was most likely.
Do you recall discussing Leigh’s name at all in this context?
Yes.
Was there a chance of a merger between Rio Tinto and BHP Billiton in 2002?
Chance? Yes, there was a chance. I wouldn’t say it was a strong likelihood.
Back in Melbourne, Brian Gilbertson mulled over what had happened in London and decided in early December that he had to resolve the governance issue. But first, he phoned his former boss Derek Keys to seek his advice. It was unequivocal: ‘Just put up with it.’
Gilbertson could not. He sat down at his computer and wrote a ‘back me or sack me’ memorandum to the board, detailing the events leading up to the curtailment of Project 6. He saved the memorandum without sending it to give himself time to consider Derek Keys’ advice.
‘Headstrong’ and ‘unpredictable’ were two of the adjectives used to describe Brian Gilbertson in the aftermath. Derek Keys, who knows him better than anybody in the business world, says, ‘I won’t say unpredictable, and headstrong would be the wrong term. He’s a highly entrepreneurial chap and he doesn’t sit on his ideas – he gets on with them.’ 29
Don Argus does not believe he is an overbearing chairman. ‘I’ve had my day in the sun [as chief executive officer] and I’m very protective of the space a CEO needs,’ he says expansively. ‘If I start to overstep the mark, I always challenge myself and say, “Would I have liked that?” And if the answer is “no” then I step back out of it very quickly. Now I believe in adult conversations. If I see something is going on, I’ll go and sit down with the CEO and say, “I’m sure this is the way to go.” Not everyone likes adult conversations, but I don’t hesitate.’ 30
Gilbertson had spent the previous 30 Christmases at Plettenberg Bay, South Africa, and he saw no reason to change that enjoyable routine. However, there had been some criticism the previous year about South African employees going to South Africa, so he and Rensche decided to spend the second half of the holiday in Tasmania. On 16 December, sitting in front of his computer, with Brigitte Bardot smiling down from the photograph on the wall behind him, Gilbertson re-read his memo and considered the consequences.