WOOLWORTHS' new chairman Gordon Cairns has sacrificed three non-executive director roles to devote more time to finding a new chief executive, as the retailer faces its biggest challenges since listing 22 years ago.
Mr Cairns told The Australian Financial Review he had given up his advisory role at management consulting firm McKinsey & Co and had stepped down as a non-executive director at fast-food operator Quick Service Restaurant Group and not-for-profit group World Education Australia to ensure he could devote at least three days a week to Woolworths.
Mr Cairns is also chairman of Origin Energy and a non-executive director of Maquarie Group and Macquarie Bank.
The former Lion Nathan chief executive took the helm last week from former chairman Ralph Waters and says finding a new chief executive is his first priority.
Mr Cairns is believed to have met for the first time last week with executive search firm Egon Zehnder, which has been charged with the task of finding a replacement for outgoing chief Grant O'Brien and at least one more non-executive director. Interviews are expected to commence this month.
Mr Cairns has yet to decide if retail experience is a prerequisite to making the CEO short list, but says Woolworths' next CEO must have leadership skills - a view backed by investors such as Angus Aitken, managing director of institutional equities at Bell Potter.
"They need a new CEO that isn't a plodder," Mr Aitken said in a recent note to clients.
"The last few CEOs of Woolworths have been completely uninspiring as retailers in my view. The better CEOs of the past were genuine retailers like Roger Corbett, Paul Simon and Reg Clairs," he said.
Mr Aitken said Woolworths also needs to take less advice from consultants, including Mr Cairns' old firm, McKinsey, which played a major role in developing the retailer's latest strategy.
"This company first went off the rails taking far too much advice from these type of players, in my view," Mr Aitken said, citing reports that Woolworths paid $45 million or more to McKinsey last year. "Whatever the number is, it isn't working!"
Mr Waters originally intended to stay on the board until Woolworths had found a new CEO. He finally bowed to pressure from shareholders, who argued that Woolworths would struggle to find a suitable chief unless there were major changes to the board and the company's culture.
Woolworths shares have fallen 17 per cent this year, from $30.57 to $25.26, the lowest level since March 2012.
While most analysts still rate Woolworths a sell, and about 8 per cent of the stock is sold short, several fund managers now believe the shares are undervalued and have been buying in recent weeks.
"I have been negative on Woolworths for a few years and couldn't have been less interested in doing anything but selling the shares," Mr Aitken said.
"I think [at] around 27 bucks or so, these are looking interesting on the buy side...there is genuine value here, they just have to solve a few things that are solvable," he said.