Cleanaway boss admits 'unacceptable conduct'

Cleanaway Waste Management chief executive Vik Bansal has admitted to a multiple instances of "unacceptable conduct" after an investigation revealed he had created a "culture of bullying and harassment" that has led to the Mark Chellew-chaired board putting the garbage boss on final notice.

"Mr Bansal has acknowledged that his behaviour should have been better and expressed contrition," the company said, in a statement authorised by Mr Chellew and the board of directors.

"He has discussed this openly with the board and with his colleagues and has embraced changes in his approach. Following this investigation, the board implemented a range of measures including executive leadership mentoring, enhanced reporting, and monitoring of the CEO’s conduct."

Shares in Cleanaway were battered by investors on Monday, with a 7 per cent slide in the stock wiping $350 million off the company's $4.5 billion market capitalisation, following revelations in The Australian Financial Review that Mr Bansal was investigated in June over accusations he fostered a toxic workplace culture and created an environment where senior managers couldn’t escalate bad news for fear of reprisal, while expecting employees to work from the Melbourne headquarters against Victoria’s coronavirus guidelines.

On Monday, Cleanaway also announced the company's chief financial officer Brendan Gill was resigning, to be replaced by current Nufarm finance boss Paul Binfield, after six years in the role.

While declining to label the alleged conduct as bullying and intimidation, as described by current and former employees, Mr Chellew said Mr Bansal had “some issues with overly-assertive behaviour” in the workplace and that the boss had acknowledged he needed to address them.

“The board will not tolerate any further instances of unacceptable conduct,” Mr Chellew said.

In a statement, Mr Bansal said he accepted the feedback and was committed to creating a “progressive culture” at Cleanaway.

Of Cleanaway’s nine-member executive committee, only one is a woman: human resources boss Johanna Birgersson. The company's Workplace Gender Equality Agency report shows that only 15 per cent of manager promotions were awarded to women.

Cleanaway shares have rallied more than 300 per cent since Mr Bansal joined the group in 2015, transforming the company into a top ASX100 company.

Mr Bansal late last month sold 73 per cent of his 5.5 million shares in the company for a total of $10 million.

The on-market share sales came just days after fine print in Cleanaway’s full-year financial accounts showed Mr Bansal “offered to forgo” his short-term incentive bonus “due to COVID-19 related challenges faced by the group” and that the board had “agreed to reduce” his short-term bonus by 25 per cent.

No other Cleanaway executive manager volunteered to reduce their bonus that year and no reason was provided to the market for Mr Bansal's share sales. The company has declined to answer questions about the share sale.

In its annual report circulated to Cleanaway shareholders on Friday, Mr Chellew thanked Mr Bansal for "responding efficiently and effectively to the unusual challenges the business faced during the year, while delivering another strong financial and operational performance", while Mr Bansal noted that keeping the company's people "safe and engaged" was one of four main ways the would see "sustained financial performance" as a "natural outcome".

One former employee said the allegations in the Financial Review were "spot on".

"It is good to bring these things into the public forum. I saw him affect the health and mental wellbeing of senior leaders in very bad ways," the former employee said.

Mr Bansal’s alleged reticence to allow employees to work from home triggered the whistleblower complaint in May, in which it was claimed the chief executive told employees and managers that he expected workers to come into the office. That went against guidelines issued by the Victorian government that required workers to stay home unless it was not practicable for them to do so.

Australia's biggest superannuation fund, the $180 billion AustralianSuper, declined to comment on Cleanaway. The fund holds a 4.85 per cent stake in the group, worth $250 million. Dimensional Fund Advisors, which holds an $180 million stake in Cleanaway, also declined to comment.

Former and current Cleanaway employees who have worked with Mr Bansal argue his leadership style is the chief reason for the company’s high rate of turnover in senior management and lower-level employees, which included a recent instance where six out of eight general managers resigned within a six month period.

Mr Bansal is now receiving “mentoring” and is subjected to “enhanced reporting and monitoring”.

“The board is disappointed in the circumstances but has taken appropriate action,” Mr Chellew said.

“We have noted the committed and sincere manner in which Mr Bansal has responded.”

Cleanaway said Mr Gill, who joined the company as chief financial officer in September 2014, would remain in his role until February and that he was leaving the group’s balance in a “very healthy state”.

“While I am disappointed that Brendan has made the decision to retire, I am also excited Paul will be joining our team,” Mr Bansal said.