AGL chairman fires up to avoid becoming Cannon-Brookes’ fodder

This is why McKenzie has exercised a spark of defiance coming into the company’s annual shareholder meeting by rejecting three of the four directors Grok put forward to join the AGL board.

To have succumbed to Grok’s wish-list of board renewal candidates would have been the equivalent of McKenzie handing Cannon-Brookes the keys to the executive floor and the company seal, then jumping on a cruise liner for an extended all-ports world tour.

McKenzie has accepted one candidate, Mark Twidell, a former Tesla Energy director, on the basis that he brings new skills to the board.

But she was not happy to grant the remainder of Cannon-Brookes’ wish-list directors, former Energy Security Board chairman Kerry Schott, or experienced directors John Pollaers and Christine Holman.

The bigger corporate governance issue for AGL is not so much whether Grok’s nominees are capable – they almost certainly are – it is whether their appointment would make the current board and management redundant in terms of running the show.

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Earlier in the year Grok, in league with Canadian asset manager Brookfield, made a conventional takeover bid for AGL which the board rejected. At that time, a less environmentally enlightened AGL was looking to demerge its retail energy assets from its dirty energy generation assets – an outcome Grok argues would impede and long-date the transition to decarbonisation.

AGL rejected the takeover. It was arguably a fatal mistake.

Since then, Grok has managed to scupper AGL’s demerger plans and convince the board of the merits of a speedier transition towards becoming a clean powerhouse.

When the shareholders meet in four weeks, history will demonstrate whether Cannon-Brookes’ victory over AGL is complete.

If the four directors he has proposed for AGL are voted up, the existing directors will be in an untenable position.

But for Grok, winning over shareholders presents a higher hurdle for the master activist. He will need the support of 50 per cent of the voting share base compared with the 25 per cent he needed to torpedo the AGL demerger.

And there will be some shareholders that will understandably resist handing de facto control to Grok without a bid – which would have attracted a premium price.

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