AGL Energy appoints Patricia McKenzie as chair and Damien Nicks as interim CEO in corporate shake-up
Mike Cannon-Brookes has immediately voiced ‘reservations’ about the appointment of Patricia McKenzie as AGL’s new chair.
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AGL Energy’s largest shareholder, Mike Cannon-Brookes, has immediately voiced “reservations” about the appointment of Patricia McKenzie as its new chair and signalled he may vote against her re-election after the power giant unveiled a board shake-up following months of corporate turmoil.
The nation’s largest power generator has suffered a torrid year after a plan to reinvent the 185 year-old utility through a demerger was foiled following a high-profile campaign by its billionaire investor.
A management and board rout ensued but the company still finds itself at loggerheads with its shareholder base after major investors nixed AGL’s initial pick for chair, Paula Dwyer, last week with the veteran company director abandoning the role last Thursday.
The new chair, Ms McKenzie, said she was “drawing a line in the sand” and did not want to reflect on the circumstances which had led to Ms Dwyer being axed, but Mr Cannon-Brookes’ Grok Ventures gave a cool response to her appointment.
“Grok Ventures has reservations about Patricia McKenzie appointing herself to chair AGL given her involvement in the failed demerger and what has been a chaotic board renewal process,” Grok said in a statement.
The tech mogul said Grok may vote against her re-election at this year’s annual general meeting in protest.
“As AGL’s largest shareholder, we will continue to work with Ms McKenzie on further board renewal, while also reserving our position in relation to our voting intentions around her appointment.”
Still, the AGL chair indicated she would not be influenced by any single shareholder and appeared to back away from any expectation that Grok would win a board seat at the company.
“We will continue to discuss with our shareholders who we bring on the board and listen to them if they feel that there are other people who might be better. But we think that independent directors are the way to go,” Ms McKenzie told The Australian.
“Independent directors are the way forward. That’s the best way to ensure that the board represents 100 per cent of shareholders.”
Asked whether Grok had been told about its preference for independent directors, Ms McKenzie said: “I discussed with them that that was the view of the board, and that we were comfortable to hear suggestions from them as we were with our shareholders as to who might be an appropriate director for the company,” she said.
“Will we make every stakeholder happy? Probably not. But we will attempt to find the right course for AGL and for the energy industry and take a leadership role in that.”
Grok said AGL will be best served by a chair who is appointed externally “which we believed the Board was working towards” with either substantial renewable energy experience or major operational transformation experience.
“Grok again stresses the renewed Board needs independent, fresh thinking. We have one opportunity to get this right because the renewable energy transition is waiting to be captured by a reinvigorated AGL under new leadership,” Grok said.
AGL also named Miles George, a former managing director of renewable energy operator Infigen, to its board while chief financial officer Damien Nicks will take over as interim CEO — as revealed by The Australian on Friday — from Graeme Hunt, who will exit the company on September 30.
Ms McKenzie was previously nominated as chair of AGL Australia, a green retail focused company that was originally planned to be split off from AGL and replaces Peter Botten who will quit the company on Monday.
The investor protest underscores the huge task ahead for the 185-year old coal-dominated power generator to keep pace with an accelerating transition to renewables and chart a course that can meet the climate and environmental demands of its shareholder base.
The company fought off two takeover offers from the tech billionaire and Brookfield earlier this year but its year-long plan to rejuvenate the electricity utility then took a major back-step when a planned demerger into retail and generation arms was dumped after pressure from investors.
A board rout ensued including the removal of Mr Botten along with Mr Hunt.
Ms McKenzie started her career as a corporate counsel with AGL in the 1970s, and is currently the chair of NSW Ports and the Sydney Desalination Plant group companies. She previously worked as chair of electricity network Essential Energy and has been a director of gas pipeline giant APA Group, the coal-focused Macquarie Generation and power distribution operator Transgrid.
The process for appointing a permanent CEO was continuing as planned, AGL said, noting there was currently a short list of Australian and global candidates.
AGL had three separate processes underway to find a chair, a chief executive to replace Mr Hunt and also new directors after Mr Cannon-Brookes effectively sunk the company’s planned demerger in May in a stunning defeat for the nation’s largest power generator.
Finance and energy executive Gary Brown will act as interim CFO.
Diane Smith-Gander has also brought forward her resignation to today, AGL said.
AGL’s former boss, Andy Vesey, said last week the power operator had fallen victim to entrenched ways of thinking and must embrace a switch to clean energy.
As AGL’s new chair Ms McKenzie faces impatient investors looking for a cohesive plan to guide it through massive electricity market volatility.
Her fellow AGL directors Vanessa Sullivan and Graham Cockroft have faced a formidable to-do list by the end of this month: anchoring a fourfold strategy refresh that involves adapting the initial demerger rationale into a renewed single business, reworking its climate plans, executing the correct energy mix to guide it through the transition and determining the right capital structure to fund both its existing business and bulging renewables pipeline.
AGL shares fell 2 per cent to $6.97.
Originally published as AGL Energy appoints Patricia McKenzie as chair and Damien Nicks as interim CEO in corporate shake-up
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