REBUILDING CORPORATE GOVERNANCE
Asbestos is a set of six naturally occurring silicate minerals, the inhalation of which fibers can cause serious illnesses, including malignant cancer, mesothelioma, and asbestosis. The company which insisted on the mining and manufacturing of this dangerous factor of production has killed thousands of unwitting workers and customers that it earned the title of “Killer Company” in a book written by Matt Peacock in 2009.
James Hardie Industries Limited (JHIL), a firm founded by James Hardie in 1888 and then owned by his partner Andrew Reid, operating in the field of production of building materials, technologies and processes, had relocated from Australia to Netherland in Dec 2001 and then moved their corporate domicile to Ireland in 2010. The genuine reason behind these activities remained opaque under the management of CEO McDonald, yet later was revealed in a civil action brought by the Australian Securities and Investments Commission (ASIC) to be the stigma of its asbestos liabilities. The directors of the company were found to “[indulge] in false and misleading conduct in statements about the financial capacity of its Foundation – established to pay current and future claims against James Hardie from sufferers of […] Asbestos –related health issues – to pay those claims into the future.” (Alex Harris, 2009)
The large amount of liability was due to the past and future number of claims for mesothelioma would be made against the company (which was expected to be more than 12,500 in total by the Australian Council of Trade Union.) To deal with this liability and move offshore, the directors and managers led by Meredith Hellicar – Reid’s successor – agreed on moving assets out of Amaca and Amaba, two of James Hardie subsidiaries which undertook all asbestos operations, and leave them with the asbestos liabilities (Anil Hargovan, 2009). These two entities then were acquired by the Medical Research and Compensation...