At the electricity and gas supplier’s investor meeting on Tuesday,AGL chairman Patricia McKenzie confirmed all Cannon-Brookes’ nominees – former Energy Security board chair Kerry Schott,Swinburne University chancellor John Pollaers,CSR director Christine Holman and former Tesla director Mark Twidell – had won election as independent directors despite the board endorsing only Twidell.
Mike Cannon-Brookes’ investment company,Grok Ventures,succeeded in blocking power giant AGL’s proposed break-up.Wolter Peeters
“The board welcomes these new directors to the board and will work constructively with them in the best of interests of shareholders,” McKenzie said.
The meeting followed months of intensifying pressure from shareholders over AGL’s response to climate change,the future of its coal-fired power stations and the make-up of its board of directors.
Cannon-Brookes’ privately owned Grok Ventures,which this year amassed an 11 per cent holding in AGL,has been fighting to “refresh” AGL’s leadership. Grok argued the board was ill-equipped to steer the 185-year-old utilities giant away from coal towards lucrative decarbonisation opportunities as more homes and businesses switch to 100 per cent electricity.
Geoff Wilson of Wilson Asset Management,an AGL investor,said the appointment of the new directors against the urging of the board marked a “very positive step forward” for shareholder democracy in Australia.
“It’s important that all Australian company boards understand that they only serve the wishes of their shareholders,” he said.
BetaShares,which owns 0.3 per cent of the AGL register,voted in favour of all four Grok nominees because it believed they would help navigate the challenges and opportunities of transitioning to a “net-zero” emissions economy.
“It’s our hope the new board unifies around the task of building long-term value for shareholders,” BetaShares responsible investments director Greg Liddell said.
The board shake-up is the latest victory over AGL for Cannon-Brookes,the co-founder of tech giant Atlassian and one of Australia’s richest people. Earlier this year,he ran a successful push to block AGL’s planned demerger,arguing it would have left two weaker entities less-able to invest in clean energy and accelerate the closure of coal-fired power stations in line with global targets to avert catastrophic climate change.
His campaign forced the resignations of several AGL directors,including its chairman and chief executive. Grok nominated four candidates for election as independent directors ahead of Tuesday’s investor meeting.
AGL’s board refused to support Holman,Pollaers and Schott,claiming they would not provide necessary “additional experience and skills”,and questioning whether they would truly be independent of Grok.
However,the candidates attracted significant support from other shareholders and the influential proxy advisers that guide them on how to vote.
“History has been made today,” said Brynn O’Brien of the Australasian Centre for Corporate Responsibility,a shareholder activism group.
“The board of an Australian listed company has been transformed by shareholders over its handling of climate risks.”
AGL is Australia’s biggest electricity supplier,with 4.5 million customer accounts and a fleet of coal,gas and renewable generation assets. Its power plants account for 8 per cent of Australia’s overall emissions.
“Today’s events have demonstrated that the direction of high-emitting companies can change and that energy transition is an immense opportunity that must be harnessed to enhance shareholder value and mitigate climate risk,” said O’Brien,who called on the boards of other big Australian polluters to take note.
Following the collapse of AGL’s demerger plan this year,the board revised its climate strategy to of its last-remaining coal-fired power station,Loy Yang A in Victoria’s Latrobe Valley,by up to 10 years to 2035. It also pledged $20 billion to add up to 12 gigawatts of new renewables and back-up “firming” assets by 2036.
Voting results showed about 70 per cent of AGL’s investors supported the climate strategy.
Interim chief executive Damian Nicks said the broad endorsement meant AGL could now rapidly progress its “ambitious but achievable” strategy.
McKenzie said she was excited about AGL’s future,and expected to name a permanent CEO in “coming months”.
“AGL now has a renewed board and management team and has set a new strategic direction – one that shapes a stronger,more sustainable future for AGL,” she said.
Some shareholders,however,did not endorse AGL’s climate strategy. BetaShares voted its 1.8 million shares against it,saying it wanted the incoming board to have the “opportunity to consider amendments” before taking it to shareholders again in 2023.
Cannon-Brookes’ wants to see AGL’s board embrace even more ambitious decarbonisation measures than what the climate plan contains,arguing that exiting coal in 2035 is still not aligned with the Paris climate agreement’s ultimate aim of limiting global temperature rises to 1.5 degrees.
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