Nuix: A 101 in CEO departures
The Nuix announcement on 11 January that Eddie Sheehy has resigned as CEO has been interpreted by the legal market as a clear sign that there has been a Nuix board fall out and a sour parting of ways.
Sheehy joined Nuix in 2006 and, alongside his brother (and former COO) Morgan Sheehy, built the company up from R&D to a stage where it is now preparing for IPO. He was not quoted in the release announcing his departure and has been replaced on an interim basis by Dentons partner Jeffrey Bleich, while Nuix seeks “a CEO who has a global IPO skillset to lead it through its next phase of growth and development.”
Until the board appoints a permanent CEO, Nuix cofounder and chairman Dr. Tony Castagna will assume many of the current CEO responsibilities.
In the one and only reference to Sheehy in the announcement of his departure, Dr. Castagna said: “As the face of Nuix for more than a decade, Eddie can be proud of his contribution at Nuix as one of Australia’s great success stories in innovation and technology.” That Nuix has entered a new phase of its development is not in question. Nor that Sheehy, an entrepreneur by background, is not the right person (and by all accounts would not choose) to lead Nuix as a publicly-listed company.
However, it is an ignominious departure for a man who led the Australian-headquartered forensic software company through its twists and turns for over a decade, diverting it into eDiscovery and information governance, before returning to a focus on investigations in around 2011.
This has culminated in Nuix – reasonably well known in legal circles for many years but less so in the wider business community – being put squarely on the map in 2016 after working with the International Consortium of Investigative Journalists on the leaked Panama Papers – its technology was at the heart of the ICIJ’s ability to sift through the millions of documents from Panamanian law firm Mossack Fonseca.
Asked about the manner of Sheehy’s departure, Nuix global communications director Naomi Beames told Legal IT Insider that “it is neither remarkable nor unusual, and not unlike that of many CEOs who recognise that their milieu is with early-stage companies.” Beames added: “The board’s intention to commit to an IPO has been well known at Nuix for more than a year, including Eddie’s decision to not continue as CEO of a public company.” Of slightly more interest is Beames’ assertion: “The timing of Eddie’s departure was at his calling and the Board accepted his decision.”
However, one senior eDiscovery player said: “Leaving before a replacement is found is not normal. He would normally wait for a replacement to be announced and take on the role of chairman or president.”
Given that Nuix has announced its plans to IPO, it will inevitably be cautious in any public announcement it makes. It is possible that the extensive and almost exclusive focus on Bleich’s incoming capability was a deliberate attempt to ward off market jitters.
But Jonathan Maas, founder and managing director of the Maas Consulting Group, echoed the sentiments of many, in commenting: “What I find most puzzling is the deafening silence from, and about, Eddie Sheehy. You don’t just walk silently away from a company you practically founded with your brother nearly 11 years ago without thanks, without a shareholder-reassuring handover to the next era of management. That’s not a senior officer’s style. It’s not Eddie’s style. My guess is that there has been an irreconcilable boardroom disagreement, but only time will tell. Whatever, I wish both Nuix and Eddie a very happy and prosperous New Year.”
This article first appeared in the January Legal IT Insider news letter – click here to sign up for your free copy: https://www.legaltechnology.com/latest-newsletter/
Note: In the newsletter we said Morgan Sheehy was continuing COO: that’ll learn us for relying on LinkedIn – Morgan Sheehy’s profile still said he was Nuix COO at the time of going to press but Sheehy was replaced in 2015 by Rod Vawdrey.