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Cannon-Brookes said he had not yet decided whether he would seek a board seat himself,but flagged he would press for board and management renewal before any “major steps” were taken in setting the company’s strategic direction
“We want to make thoughtful decisions there in terms of the composition of the board and how it should look going forward,what the mix of skill sets are going forward ... to manage this sort of transition and change,” he said.
AGL’s coal- and gas-fired power stations are the biggest sources of greenhouse gas emissions in Australia,accounting for 8 per cent of the nation’s carbon footprint.
Cannon-Brookes and other investors have been pressing the board to bring forward the planned 2035 closure of its Baywaster power station in NSW and the 2045 closure of Loy Yang A in Victoria’s Latrobe Valley in order to meet the goals of the Paris Agreement.
In its statement,the board on Monday acknowledged Australia was at a pivotal moment in the clean-energy transition,and believed the coal plant closure dates would “continue to be accelerated”.
Debby Blakey,chief executive of super fund HESTA,which holds AGL shares on behalf of its members,has been calling for faster climate action at AGL and on Monday welcomed the “significant board renewal”
“Shareholders are increasingly expecting companies to do more to drive a timely,just and orderly transition to a low carbon future,” Blakey said.
“It’s vital that company boards consider if they have the right mix of skills and strategic thinking to ensure they remain adaptable as the need for climate action increases in the coming years.”
AGL’s board had insisted for months that the demergerwould unlock value for shareholders,creating a carbon-neutral retail and clean power company to be known as AGL Australia,which would be able to attract investors who are increasingly distancing themselves from fossil fuels. Meanwhile,they had argued that housing AGL’s giant power stations into a separate company,Accel Energy,would enable a greater focus on transforming coal sites into energy hubs that could also house renewables and batteries.
Shareholder activists on Monday said AGL’s board had ignored its shareholders and had “now paid the price”.
“The bloodbath in the boardroom of AGL today was years in the making and well overdue,” said Harriet Kater of the Australasian Centre for Corporate Responsibility.
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“With the abandonment of the demerger,the departure of four directors is a welcome step towards a brighter future for AGL shareholders.”
Analysts on Monday said it appeared AGL’s planning for a new strategic direction was “back to square one”,and described the failed demerger as an “expensive exercise”.
“AGL Energy has spent approximately $160m to date on the failed demerger proposal,” RBC Capital Markets analyst Gordon Ramsay said. “Perhaps some of this spend may still be useful,as there is potential to use some of the ‘extensive analytical work’ and ‘thorough assessment of the strategic plans’ that were developed for AGL Australia and Accel Energy for new analysis.”
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