AGL: Botton, Smith-Gander and Hunt exit brings scope for fresh strategy

The Australasian Centre for Corporate Responsibility​ (ACCR) is commenting on AGL Energy’s announcement that Peter Botten and Diane Smith-Gander are exiting the AGL board immediately and that Managing Director and CEO Graeme Hunt will exit 30 September. Patricia Mckenzie has been announced as Chairperson, with CFO Damien Nicks to step in as acting CEO from 1 October.

Commenting on the appointment, Harriet Kater, Climate Lead (Australia) at the Australasian Centre for Corporate Responsibility (ACCR) said:

“The announcement that three key architects of AGL’s failed demerger are finally exiting the board will provide investors with comfort that the company could be more open to fresh ideas.

“The board renewal process has been sluggish to say the least.

“The fact the same board that delivered the failed demerger was continuing to progress the forward-looking strategy was becoming untenable.

“New Chairperson Patricia McKenzie was leading the board renewal process. After some well publicised false starts, she has ended up as the final pick. This whole process has been questionable and raises governance concerns.

“It is disappointing that AGL has appointed a Chair who is so close to its previous failed vision.

“Investors could not be clearer: AGL needs a Chair who can deliver a vision for the decarbonised energy needs of the 21st century. More of the same is not going to cut it.

“Mckenzie joined the AGL board in May 2019 and was the nominated chair for ‘CleanCo’ or AGL Australia, had the demerger been successful. Her background is weighted towards the gas industry so it will be interesting to observe her views on opportunities for AGL around electrification.

“It is encouraging to see Miles George, former Chair of the Clean Energy Council and CEO of Infigen Energy, announced as an independent non-executive director. These are the skills that the AGL board sorely needs.

“AGL remains committed to providing its shareholders with a vote on its transition strategy, a Say on Climate, at the 15 November AGM.

“There can be no running away from shareholders at the AGM, McKenzie as Chair needs to take ownership and deliver a credible, multi-decade transition plan for shareholders to vote on. Investors are sick of the can being kicked down the road.”

Background

Armina Rosenberg, who sits on ACCR’s Office Bearers’ committee, is also a portfolio manager at Grok Ventures. Grok Ventures is a business name used by the private investment group controlled by Mike Cannon-Brookes. "Grok Ventures" is a registered business name of Cannon-Brookes Services Pty Limited (ACN 616 170 542) (CBS). An affiliate of Cannon-Brookes Services Pty Limited, the Galipea Partnership, is the holder of a 11% interest in AGL. This potential conflict has been disclosed and Ms Rosenberg has had no role in ACCR’s decision-making on this matter.