RS Group CFO resigns over relationship with colleague

Dive Brief:

David Egan, 55, the CFO of RS Group — a provider of product and service solutions for designers and builders of industrial equipment and operations — resigned after notifying the board of directors of “a personal relationship with a colleague,” according to a company announcement Wednesday.
“Following a detailed review by the Board, I recognise that there have been some shortcomings of judgment on my part and my actions have fallen short of the high standards expected of RS leadership. Therefore, it is right for me to step down from my role,” said Egan in the announcement.
Egan is leaving the company effective immediately, and Jane Titchener will take over as interim CFO until a permanent replacement CFO is appointed, according to the announcement.

Dive Insight:

In terms of next steps for RS Group, due diligence for both the organization itself as well as shareholders will be key, said Shawn Cole, president of boutique executive search firm Cowen Partners in an interview.

“Right now, there needs to be a full assessment of the team, as they have just unexpectedly lost their leader,” he said. “They really owe it to themselves and their shareholders to assess internally and externally what is best for the company.”

While the statement did not disclose the colleague that Egan is involved with, Cole also said the full impact will partly depend on the role that person played at the company.

“We don’t know who this colleague is, if it's the VP of Finance, well that’s double the trouble,” said Cole.

The company now faces a host of questions related to governance, according to Cole. In situations like these, it depends on the severity, but generally, “you have to assess the leadership in general and the choices this person has made maybe in the last six months to a year,” said Cole. “You also might want to bring in an outside interim to help stabilize the team and assess if there's any long term damage or anything that needs to be addressed there. Or if this is just strictly a personnel issue,” he said.

“They really owe it to themselves and their shareholders to assess internally and externally what is best for the company,” he said.

Titchener has been with RS Group for over 15 years and is currently the vice president of corporate development as well as the interim CFO, Asia Pacific. She also has financial leadership experience having previously held the roles of the vice president of group tax and treasury at RS Group. Prior to RS, she worked at Ernst & Young as a senior tax manager, according to her LinkedIn profile.

Outgoing CFO Egan has been with RS Group for seven years, having taken on CFO duties in 2016. He has also resigned from his role as director.

Although Titchener is taking on the duties of CFO for the interim, the company is now in search for a permanent replacement.

"Following a thorough review, the Board has accepted David's resignation and in stepping down he recognises the importance of leaders setting and abiding by exemplary standards. I would like to acknowledge the significant contribution David has made in his seven years at RS, driving transformation both as CFO and on two occasions as Acting CEO,” said board member Rona Fairhead in the statement.