Greg Fitzgerald, who had been serving as the chief executive of Vistry since 2017, took on the additional role of chairing the housebuilding group in May. This move raised eyebrows as it goes against governance guidelines that recommend separating the roles of CEO and chair. The outgoing chair justified this decision by stating that it was necessary to maintain consistency and momentum in executing the group’s strategy and meeting medium-term targets.

However, critics argue that Fitzgerald’s new role simply overlaps with his existing responsibilities as CEO. The board had faced disruptions with the resignations of three non-executive directors the previous year, leaving only six members, two of whom are American. This composition has led to differences in approach between US and UK investors. Fitzgerald’s rationale for taking on both roles was to bring stability to the board.

Concerns have been raised about the risks associated with combining the CEO and chair roles, potentially leading to a lack of checks and balances and weakening board oversight. Despite facing a protest vote of around 20 per cent at Vistry’s AGM, Fitzgerald garnered support for his ambitious growth plans. Known for his charismatic and demanding leadership style, Fitzgerald has been instrumental in driving Vistry’s expansion through strategic acquisitions.

Under Fitzgerald’s leadership, Vistry has shifted its focus towards partnerships with local councils, social housing providers, and private landlords, emphasizing the ethical aspect of housebuilding. While partnership projects offer lower margins compared to speculative developments, they provide stability and require less capital investment. This model has resonated with US investors who value Vistry based on its earnings, in contrast to UK investors who focus more on balance sheet metrics.

In October, Vistry faced a setback when it was revealed that costs for upcoming projects had been underestimated, leading to a profit warning and a subsequent downgrade in profit expectations. Fitzgerald pledged to address the issues and initiated an independent review to identify the root causes. The share price took a hit, dropping significantly in response to the revised forecasts.

The review attributed the cost overrun to pressure from the center, particularly in the South Division, where inaccurate forecasting processes had led to underestimations. Remedial actions were taken, with key personnel stepping away from the business. However, the chief operating officer’s role was also abolished to streamline reporting lines to the CEO, adding to Fitzgerald’s workload.

While Fitzgerald’s deep understanding of Vistry’s operations is unquestionable, his multiple roles pose a key-person risk for investors. The need for vigilant non-executive directors and a more experienced chair becomes crucial in mitigating potential weaknesses within the group. Moving forward, Vistry will need to navigate these challenges to regain investor confidence and ensure sustained growth.