Leave your corporate egos at the door, John Pollaers tells AGL Energy

Businessman Professor John Pollaers has listed the missteps of AGL Energy as a battle to form its new board heats up.

AGL Energy has suffered from a conservative outlook and a fear of reinventing its strategy – and requires a complete overhaul, says John Pollaers, the businessman rejected by the company for a position on its board.

Professor Pollaers was one of four proposed by billionaire Mike Cannon-Brookes’ Grok Ventures to renew the company’s board as part of a major strategy re-set at the 185-year old utility.

The move followed the demise of AGL’s demerger plan, which forced the departure of its chief executive and chairman.

Professor John Pollaers is critical of AGL’s approach at board level.

However, the energy company’s board rejected three of Grok’s picks – Professor Pollaers, Energy Security Board chair Kerry Schott and CSR director Christine Holman – setting the scene for a showdown with the Atlassian co-founder at its November annual meeting.

Professor Pollaers, chairman of the Australian Financial Complaints Authority, is weighing into the dispute for the first time with an attack on the current AGL board’s approach.

“There has been a level of conservatism and a level of ‘we know best’ which is easy to happen when your business is big and looks successful, and you get a level of ‘we can’t be told’,” Mr Pollaers told The Australian.

Atlassian co-founder and AGL board critic Mike Cannon-Brookes. Picture: Getty Images

“They got themselves on to a path that was very hard to pull back from. Even now I think decisions are measured in terms of reputation and will we be seen to be weak as opposed to let’s open it up and think through what the best outcomes are.

“It’s time to leave the corporate ego at the door and come together and work out how to solve the problems in front of us.”

AGL chair Patricia McKenzie has indicated the company would be seeking to bring on more directors over the next year. AGL would add candidates with merger and acquisition experience along with customer, digital retail and emerging technologies expertise.

Grok reiterated its support for Professor Pollaers on Tuesday.

Kerry Schott, head of the Energy Security Board. Picture Ryan Osland

“We consider John’s experience leading large-scale company and culture transformations across a range of complex industries absolutely necessary for the AGL board in executing on a more ambitious transition that delivers value to all stakeholders, including shareholders,” a Grok spokesman said.

AGL said it would contest a campaign by Grok to install additional directors to the board.

Professor Pollaers said he had carried out 16 major company transformations during his career, although not all were a success.

At Pacific Brands, he attempted to revitalise Bonds underwear and Sheridan sheets before resigning less than two years in the role.

A stint prior to that – leading Foster’s Group – ended with a $12.3bn takeover from SABMiller and a 42 per cent protest vote over the issue of up to $5.2m worth of free shares to Professor Pollaers.

Still, the veteran executive – also the Swinburne University chancellor – said he had the skills to help reinvent AGL as it switches off its coal power stations and moves to a green retailer.

Businesswoman Christine Holman was nominated, but rejected, for a board position.

I looked at it and thought this is a classic turnaround. But it’s a turnaround that actually has a lot going for if it gets the right leadership,” Professor Pollaers said.

“It fits with my desire to have an impact on Australia and fits with my desire to do good business.”

“Every turnaround that I had been involved in over the years you go in and it’s pretty easy to see exactly the point at which the board turned left, and they should have turned right.

“And I think that in many respects you can’t just put it down to the last couple of years. You’ve got to put it down to the decisions that have been taken probably over the last 10 years.

“This is a business with huge, huge upside for shareholders and huge upside for the country.

“There is the ability to really take a leadership position and transition industries into decarbonising and electrifying and it’s an opportunity that just requires the will of the board to shift towards solving the problem and then getting behind the execution.”

Earlier this month, AGL said its board would support only the nomination of ex-Tesla executive Mark Twidell from among those backed by Mr Cannon-Brookes.

AGL Energy chair Patricia McKenzie.

“The board has determined that the skill set and experience of the other (candidates) would not add to the overall effectiveness of the board,” AGL said at the time.

Professor Pollaers said directors needed to have a “sleeves rolled up” attitude to rethinking the company. Grok has proposed AGL backing “customer decarbonisation journeys” by offering financing products that help retail customers fund the capital expenditures as they convert their homes to renewable electricity.

“The board will be making decisions that will bind the next three or four CEOs. They need to have the skills to be able to therefore develop the right plan to hold the course but also to support those CEOs in doing better and ensuring the execution works.”

“The board does need experience in looking at new revenue and new products … In some ways they’ve probably been a little bit overly focused on ‘we’ve got a lot of customers and that’ll get us through’ and in that way not really thinking about how the environment is changing.”

Grok teamed up with Brookfield to lob two takeover offers for AGL – both rejected – but speculation continues to linger that either or both of the suitors may reprise a bid given tensions over the power giant’s future.

Brookfield emerged in June with a 2.5 per cent stake in AGL, stoking talk it may build a bigger hold on the company.