Maxsted flags board exit

The Australian - - FRONT PAGE - JOHN DURIE

Lind­say Maxsted is step­ping back from pub­lic com­pany boards, with BHP con­firm­ing he will re­tire at year’s end and be re­placed as au­dit com­mit­tee chief by former Wes­farm­ers CFO Terry Bowen.

Mr Bowen will also join the Transur­ban board, which Mr Maxsted chairs.

The moves come as Mr Maxsted nears the end of his time as West­pac chair­man.

Lind­say Maxsted is step­ping back from pub­lic com­pany boards, with BHP con­firm­ing he will re­tire at year’s end and be re­placed as au­dit com­mit­tee chief by former Wes­farm­ers CFO Terry Bowen.

Bowen will also join the Transur­ban board, which Maxsted chairs, but BHP sig­nalled that Maxsted in­tended to step down from the re­source com­pany dur­ing his present term.

The moves come as Maxsted nears the end of his time as West­pac chair­man, which was sig­nalled late last year in the wake of the Aus­trac lit­i­ga­tion.

While Maxsted is step­ping aside from pub­lic com­pany board life, he re­port­edly plans to con­tinue an ac­tive role at his pri­vate ad­vi­sory group Align Cap­i­tal, which ad­vises pri­vate eq­uity and other com­pa­nies on fi­nance.

One of his clients is Ir­ish-based Cool­more Stud, which also hap­pens to man­age his race­horses.

Friends say re­tire­ment is not in his present plans. Maxsted didn’t re­turn calls to his hol­i­day base in Port­sea on the Morn­ing­ton Penin­sula out­side Mel­bourne.

BHP’s de­ci­sion to make the an­nounce­ment yes­ter­day dur­ing a tra­di­tion­ally quiet news time was un­usual and may well have been prompted by Maxsted him­self to clear the air on his fu­ture roles.

The West­pac board is look­ing at Maxsted’s re­place­ment with in­ter­nal can­di­dates, in­clud­ing former KPMG boss Peter Nash and former Mor­gan Stan­ley Aus­tralia boss Steve Harker.

A de­ci­sion on the new chair will come sooner rather than later to clear the way for a for­mal ap­point­ment of a new chief ex­ec­u­tive.

Nash fol­lowed Maxsted to the top at KPMG. He has strong bank­ing and reg­u­la­tory cre­den­tials for the po­si­tion.

In­ter­nal chief ex­ec­u­tive can­di­date, former CFO Peter King, has a good chance of be­ing ap­pointed long term, given the time taken to find a suit­able ex­ter­nal can­di­date. He has in­di­cated a pre­pared­ness to stay on un­til a per­ma­nent can­di­date is found, de­fer­ring a pre­vi­ously an­nounced plan to re­tire.

The board moves come amid al­ter­nate choices by ex­ec­u­tives on whether to take high-pro­file com­pany board posts.

The fact Bowen, a BHP board col­league, is fol­low­ing Maxsted on to the Transur­ban board will be seen as an in­ter­nal shuf­fle that does lit­tle to pro­mote di­ver­sity.

Maxsted last year an­nounced his de­ci­sion to step down from the West­pac board in the wake of the Aus­trac scan­dal, along with chief Brian Hartzer.

Share­hold­ers de­manded a pub­lic show of cul­pa­bil­ity from the West­pac board.

BHP main­tains a strict gov­er­nance rule re­quir­ing di­rec­tors to step down af­ter nine years on the board and this year marked Maxsted’s fi­nal term.

The com­pany has an­nual di­rec­tor elec­tions as man­dated by UK gov­er­nance rules. The nineyear rule saw highly re­garded di­rec­tor Carolyn Hew­son step down last year, but her move was not for­mally flagged sep­a­rately as Maxsted’s was yes­ter­day.

The early an­nounce­ment could well have been prompted by Maxsted to clear the air on his fu­ture roles.

Former Wes­farm­ers fi­nance chief Bowen, and former Mac­quarie boss Ni­cholas Moore, are sail­ing op­po­site tacks as they chart a post-ex­ec­u­tive ca­reer, with the former stick­ing to large cor­po­ra­tions. Nei­ther needs to work fi­nan­cially, so the is­sue is mainly one of in­ter­est.

Moore has cho­sen to join the well run not-for-profit The Smith Fam­ily, and a grow­ing soft­ware group Wil­low, as his start­ing base.

He has 3.1 mil­lion Mac­quarie shares worth about $360m and pay­ing $16.3m in div­i­dends, so the rent is cov­ered.

Like a lot of se­nior ex­ec­u­tives, he ap­pears to have de­cided to keep well clear of listed com­pa­nies for any non-ex­ec­u­tive role he takes.

Moore was a former cor­po­rate ad­viser work­ing closely with big com­pany boards, so the at­trac­tion of con­tin­u­ing to do so af­ter step­ping down from his ex­ec­u­tive ca­reer is lim­ited.

Former Deutsche ad­viser Scott Perkins is one of the few merg­ers and ac­qui­si­tion bankers who has hit the pub­lic board trail, with po­si­tions on the Wool­worths, Origin and Bram­bles boards.

Cor­po­rate lawyers such as David Gon­ski and former col­league John Green have, of course, pur­sued suc­cess­ful nonex­ec­u­tive ca­reers, along with Ni­cola Wake­field Evans, Christine McLough­lin and oth­ers.

The think­ing by some is that big com­pany boards are high-risk with lit­tle up­side and too much fo­cus on com­pli­ance and lit­tle in the way of strat­egy.

This de­pends on how com­pany chairs han­dle the role, which is why due dili­gence is needed by both sides.

Moore would much rather join some­thing he can be closely in­volved in and where he can be part of the team, like Wil­low.

Former CBA boss and now AMP chair David Mur­ray took the view he didn’t want to be on the board of a com­pany over which he had lit­tle in­flu­ence.

The re­vival of AMP is a chal­lenge and one in which he can clearly play a big role.

Bowen, by con­trast, en­joys big com­pany boards and has rel­ished his time at BHP, be­ing Ken MacKen­zie’s first ap­point­ment.

The com­pany on Tues­day said Bowen would take Maxsted’s place as chair of the key au­dit and risk com­mit­tee.

Bowen will also join the Transur­ban board and is on the path to take over from Maxsted as chair.

Bowen, in con­trast to Moore, likes work­ing with big pub­lic com­pa­nies and his BHP ex­pe­ri­ence has proved in­valu­able as the com­pany trans­fers to a new chief ex­ec­u­tive, Mike Henry. His role at pri­vate eq­uity con­cern BGH Cap­i­tal is also chang­ing to a lesser one now former KKR ex­ec­u­tive Matt Claughton is on the job.

Af­ter trav­el­ling from his Perth base for 38 weeks last year, he is keen to travel less.

The key, he fig­ures, is to do your own due dili­gence and in BHP and Transur­ban he has two well-run com­pa­nies in very dif­fer­ent sec­tors.

If, as ex­pected, he as­sumes the Transur­ban chair, his key task will be to find a re­place­ment for Scott

Charl­ton, who af­ter eight years in the top job is due to step down shortly.

It should be noted the Transur­ban board has not made a de­ci­sion and an­other highly re­garded in­ter­nal can­di­date would be Christine O’Reilly.

A good CEO gen­er­ally lasts be­tween seven and 10 years, but the av­er­age ten­ure is 4.8 years.

The con­flict­ing ca­reer paths come down to a ques­tion of choice, with dif­fer­ent peo­ple seek­ing dif­fer­ent roles.

While pub­lic com­pany boards are seen as be­ing all down­side, there are plenty who en­joy the ex­pe­ri­ence that comes down, in part, to hav­ing a good chair and board and a well-run man­age­ment.

Pri­vate com­pa­nies have their share of sna­fus. It’s just we don’t al­ways hear about them.

Tough de­ci­sions ahead

Amid the changes at non-ex­ec­u­tive level, Bo­ral chair Cather­ine Fagg has some de­ci­sions to make, with the mar­ket ex­pect­ing chief ex­ec­u­tive Mike Kane’s term to be cut short.

He was due to step down in 2022 but in the wake of the fi­nan­cial prob­lems at the com­pany’s newly ac­quired US busi­ness share­hold­ers say they want ac­tion sooner rather than later.

The board is due to meet to­wards the end of this month where the fi­nan­cial ir­reg­u­lar­i­ties at the US busi­ness will be con­sid­ered along with Kane’s term.

Kane came to the top job at Bo­ral in 2012 when former chair Bob Ev­ery showed Mark Sel­way the door amid an in­ter­nal ex­ec­u­tive re­volt.

Kane joined Bo­ral two years ear­lier and was run­ning its US op­er­a­tion af­ter a ca­reer in the sec­tor in the US.

Since then he has gone some way to stream­lin­ing the busi­ness, get­ting rid of bricks and mov­ing closer in Asia with the Knauff joint ven­ture — but, through his $US2.6bn Head­wa­ters ac­qui­si­tion, Kane went against trend.

The in­ter­nal man­age­ment was reshuf­fled at the start of last year to pre­pare for suc­ces­sion, with CFO Ros Ng given wider du­ties, Ross Harper placed in charge of op­er­a­tions, and Wayne Man­ners in­stalled as Aus­tralian boss.

If Fagg wanted a read on fund man­ager sup­port for Kane af­ter a 52 per cent underperfo­rmance in his seven years at the helm, Novem­ber’s Sims Met­als an­nual meet­ing told the story.

The prox­ies were run­ning strongly against Kane’s ap­point­ment to the board and his nom­i­na­tion was with­drawn to pre­vent em­bar­rass­ment.

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