Fluor (FLR +0.17%), one of the world's largest engineering and construction firms, has been refreshing its leadership with some major changes. Its executive chairman, David Constable, will step down on May 6, handing the reins to its Lead Independent Director Jim Hackett.
Fluor also expanded its board from 10 to 12 directors, while its number of independent directors rose from 8 to 10. That expansion diversifies its directors' combined skill set, helping the company serve a broader range of markets while tightly managing its major projects.
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One of Fluor's newest board members is Robert Card, the former President and CEO of SNC-Lavalin (the Canadian engineering and construction giant now known as AtkinsRéalis (SNCAF 5.23%)). Let's see how Card's appointment might move Fluor's stock this year.
NYSE: FLR
Key Data Points
What will Robert Card bring to Fluor?
Card started his career as an intern at the U.S. engineering company CH2M Hill, where he eventually became a Group CEO, board member, and the company's largest shareholder. From 2001 to 2004, he served as the U.S. Under Secretary of Energy under the Bush Administration. During his tenure, the Department of Energy expanded its renewable and carbon-free energy and research projects, accelerated environmental remediation of its legacy sites, and completed the original Human Genome Project.
As SNC-Lavalin's CEO from 2012 to 2015, Card led a recovery effort after the company identified ethics issues spanning the previous decade. Card revamped the company's governance, ethics, and compliance program while expanding its initiatives in health and safety, environmental protection, sustainability, and other aspects of corporate responsibility. Card also streamlined SNC-Lavalin's business by divesting some of its assets to expand its stronger oil and gas, mining, power, and infrastructure segments.
What could Card's appointment mean for Fluor?
Fluor has been expanding its energy transition, infrastructure, advanced manufacturing, and life sciences businesses to curb its dependence on fixed-price megaprojects -- which faced labor shortages, cost overruns, permitting delays, adverse weather conditions, and other challenges.
Card's experience clearly supports the expansion of Fluor's higher-growth businesses. Fluor also put him on the Audit Committee and the Commercial Strategies & Operational Risk Committee, indicating the company wants someone with extensive experience to assess the costs and risks of its massive projects. While Card's appointment probably won't boost Fluor's stock on its own, it's part of a broader effort to streamline its sprawling business.
For now, investors should see whether Fluor resolves the delays and cost overruns on several of its biggest infrastructure projects, or how much cash it raises by divesting its stake in the small modular reactor (SMR) maker NuScale Power. Those outcomes are more likely to move Fluor's stock this year than its recent management changes.
