Santos’ Sherry Duhe drops bombshell on CEO Kevin Gallagher
Sherry Duhe quit Santos after just a year as CFO. An internal note to colleagues reveals a falling out with long-time boss Kevin Gallagher.
Sherry Duhe said she was ousted from her role as Santos chief financial officer after speaking out over the leadership style of chief executive Kevin Gallagher, the latest flashpoint in his decade-long reign at the oil and gas producer.
Ms Duhe, widely viewed as a potential successor to Mr Gallagher, announced her unexpected exit last week, with Santos explaining she resigned to “pursue other interests”.
However, Ms Duhe said the decision was triggered by Mr Gallagher’s leadership style.
“I gave Santos my best shot, but in the end just couldn’t reconcile my leadership style to Kevin’s,” Ms Duhe said in an email to colleagues last week.
The experienced executive, who previously worked at Newcrest Mining and Woodside Energy, said both Mr Gallagher and people executive Kim Lee urged her to reconsider her decision to resign.
However, Santos chairman Keith Spence stepped in and said she should leave.
“Sadly, when I initially approached Kevin last week with my intention to resign, he and Kim both asked me to reconsider, and asserted that he wanted to try to improve his leadership style thus that I would stay, but then I was informed over the weekend by the board chair that my services are no longer needed, effective immediately,” Ms Duhe wrote in her email.
Ms Duhe had intended to serve out her six-month notice period, but instead left the company immediately.
“Although this is not ending for me at Santos at all in the way I would have chosen it, as I was very willing to work out my six-month notice period, I am looking forward to enjoying a bit more fun employment and then eventually seeing what is next.”
She has been replaced on an acting basis by deputy CFO and treasurer Lachlan Harris, a 15-year Santos veteran.
Despite the offer of a handover to Mr Harris, sources said Ms Duhe’s computer and email access had been revoked, which raises questions about the likelihood of the process taking place. Santos declined to comment.
The messy departure of a senior executive who had been tipped as part of the succession plan has sharpened investor concerns over governance and continuity at the Adelaide-based producer.
Broker MST Marquee said the Santos board had effectively dismissed a whistleblower who raised concerns regarding culture, governance and CEO behaviour.
“We note this board includes board members from Oil Search, who also reportedly failed to address behaviour and whistleblower concerns raised about the Oil Search CEO. This can appear a pattern of accepting unacceptable behaviour by the Santos board,” MST Marquee analyst Saul Kavonic said.
Mr Gallagher has been in the CEO role for nearly a decade but has endured periods of controversy over his leadership style and the board’s $6m golden handcuff deal in 2021, pitched at the time as a move to keep the Scottish boss from taking the top job at Woodside.
The use of a private jet for the Santos board and Mr Gallagher was also derided as a “terrible look” by a major institutional investor after the company admitted to the multimillion-dollar expense two years ago.
A $30bn takeover deal by Abu Dhabi could have handed Mr Gallagher more than $50m, with the deal ultimately collapsing amid tensions between the two camps.
The messy exit of Ms Duhe again raises questions over the tenure of both the CEO and chairman, according to Mr Kavonic.
“One asks if it might be time for shareholders to consider if they would be better off under a refreshed leadership, and for more urgent and independent succession planning.”
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