The week that was

The week that was

Considering how events have transpired this week Diabetic Investor can’t help but wonder if children in France are dressing up as Chris Viehbacher or Serge Weinberg for Halloween.  One thing is pretty certain stakeholders in that soap opera that was once known as Sanofi (NYSE:SNY) this week has been nothing but a nightmare as shares have lost over 12% as trading began this morning. Looking ahead the Board better get it right when they replace Viehbacher as they risk a major investor backlash if the selection is perceived to be less than stellular.

While Diabetic Investor continues to believe the Board made the right move by firing Viehbacher, they have now placed themselves at a critical juncture.  This is why we believe they should not rush to fill the position. However we have this feeling the Board has already set their sights on a few candidates and this process won’t take very long.  Reading between the lines and listening to the various accounts of how this situation came to be, the Board didn’t act rashly and actually have been looking at potential successors for a few months.

We also believe that now that CEO and Chairman posts have been split into two distinct roles one will be filed from within the company the other from outside the company.  This may or may not be in the best interest of the company and points to a huge problem facing the company. While the Board is claiming Viehbacher was canned for performance issues there is no question that Viehbacher direct style and move to Boston played into the decision. It’s also true the French government never liked Viehbacher who to his credit made decisions based on not what was best for France but what was best for Sanofi and the company’s stakeholders.

Again to his credit Viehbacher wanted Sanofi to become a global pharmaceutical conglomerate that was based in France, not a company run by the French government, unions or media. This is why the Board and company have issues that go beyond strategy. Either the Board tells the French government, the unions and the media to stop trying to run a pharmaceutical company then it really won’t matter who they put in what position. Sanofi is and should be run for their stakeholders and no one else.

Diabetic Investor suspects that Viehbacher will land on his feet just fine and likely be hired elsewhere, like him or not the guy has talent.  The concern for Sanofi stakeholders should be will the Board make a decision based on what’s best for Sanofi or what’s best for France; and no this is not a joke. Frankly Diabetic Investor can’t imagine an American company filing mission critical positions to satisfy President Obama or the media.  Unions come into play but not nearly as much as they do in France.

This search should be about one thing and one thing only hire the people who are most qualified, people who will put the interest of Sanofi stakeholders first. Let’s be honest here it’s not the French government, unions or the media who’s paying these people, they don’t not work for the government, unions or unions – they work for Sanofi stakeholders.  Stakeholders better hope the Board gets this for if they don’t a 12% drop in share price will only be the beginning of much deeper decline.