Questions must be asked about delayed AGL board renewal and CEO appointment
The Australasian Centre for Corporate Responsibility (ACCR) is commenting on AGL’s annual results which were at the low end of previous guidance for the year ended 30 June 2022. EBITDA was down 27% from previous year, profit after tax down 58%. Lower wholesale prices and plant outages were key reasons for this. No meaningful announcements were made with regard to the nomination of new board members and the appointment of a new CEO.
Commenting on AGL’s annual results, Harriet Kater, Climate Lead (Australia) at the Australasian Centre for Corporate Responsibility (ACCR) said:
“Today’s results drive home why it is in shareholders’ interests to bring forward the closure of AGL’s antiquated coal fired power stations.
“The Loy Yang A unit outage occurred in the midst of a raging energy crisis, failing not only AGL shareholders but all consumers across the national electricity market.
“AGL also burned around $145 million of shareholders' money on the abandoned demerger.
“The company states that its strategy review process will be completed in September and yet we still have no new Chair and CEO. These unexplained delays in appointing new leadership put the new strategy at risk.
“Today AGL has confirmed it will release a Climate Transition Action Plan to be voted on at the 2022 AGM. Whilst ACCR encourages the provision of a Say on Climate, shareholders will understandably question the timing of this particular vote.
“It is absurd that the same board that oversaw the failed demerger and extraordinary value destruction is responsible for forward-looking strategy. How can investors have confidence in a transition plan developed without the involvement of future company leadership?
“There is increasing agitation amongst AGL investors around the pace of board renewal and CEO recruitment.
“A market announcement from June stated that the Chair replacement process was ‘well advanced’ and yet the same language is being used today, two months later. Diane Smith-Gander, who was due to exit the board today, is also staying on until the November AGM. Chair Peter Botten must urgently and transparently explain the reasons for the recruitment delays.
“At this point, AGL seems to be managing their board renewal and recruitment about as well as they managed their demerger.”
The 30 May 2022 ASX release announcing the board departures and recruitment plans can be found here