GRT Lawyers discuss the ramifications for small caps of quick-fire executive exits

GRT Lawyers Scott Standen and Ashley Hill speak with Proactive’s Elisha Newell about the ramifications of the raft of CEO changes in the ASX small-cap sector in the past few months. Standen outlines the nature of contracts between companies and their executives, including the length of contracts and how both parties can protect themselves, while Hill outlines the fact that contract timeframes can be negotiated to the mutual benefit of both parties when an executive decides to leave.The pair also discusses what happens if an executive wants to leave within a three-month period – navigating a probation period and how to avoid ‘loose ends turning into snakes’. Also discussed are the financial and stock price implications of a CEO’s departure for a small cap company, which are generally tied to performance. Finally, the pair discusses the legal avenues for both parties that can help limit damage and protect brand.