PG&E set for major board shakeup
Half of the PG&E Corp. board of directors will be replaced in the coming months, the bankrupt San Francisco energy company announced Monday as it provided fresh details about previously announced plans to bring in new leadership.
PG&E said no more than five of its 10 current directors will stand for election at the company’s annual shareholders meeting in May. The boardroom shakeup is part of an effort PG&E revealed last month — before it filed for bankruptcy protection — to add “fresh perspectives” that will provide additional expertise in “safety, operations and other critical areas.”
PG&E did not say which of the current board members are leaving, and a spokeswoman had no additional comment
beyond the company’s statement that was filed with the Securities and Exchange Commission.
At the conclusion of the shareholders’ meeting, which is scheduled for May 21, PG&E intends to have 11 independent directors, a majority of whom will be new to their roles, according to the company’s statement.
One PG&E board member already left after the company announced its intent to reorganize under Chapter 11 of the U.S. Bankruptcy Code largely because of billions of dollars in potential liability it faces from the devastating 2017 and 2018 Northern California wildfires. The departure of that former board member, Roger Kimmel, came just after the abrupt exit of CEO Geisha Williams, who also resigned from her board seat.
In its statement, the PG&E board said it recognizes that the company must “re-earn trust and credibility with its customers, regulators, the communities it serves and all of its stakeholders” and is “continuing to make changes that reinforce PG&E’s commitment to safety and improvement.”
“We recognize the importance of adding fresh perspectives to the Board to help address the serious challenges the business faces now and in the future,” the statement said. “We have been working diligently to identify respected professionals with relevant experience in safety, operations and other critical areas, and we have identified a number of strong candidates.”
The composition of PG&E’s board had been publicly criticized by lawmakers including state Sen. Bill Dodd, D-Napa, who authored key legislation that will help the company handle 2017 wildfire costs. Dodd called for “systematic change” in PG&E’s management and board after recent allegations from state regulatory staff that the company repeatedly falsified certain internal gas-safety records for several years.
In a statement Monday, Dodd said he supported PG&E’s announcement but was critical of the timeline.
“While the change in the board is welcome, it’s still taken way too long,” he said. “And it doesn’t make sense to wait another day on these changes with another fire season on the horizon. Time will tell if this new leadership instills the badly needed culture of safety at PG&E.”
The New York hedge fund BlueMountain Capital Management, which has been critical of PG&E’s decision to seek bankruptcy protection, has also criticized the board composition. BlueMountain, which manages funds that own millions of PG&E shares, called on stockholders to replace the entire board and said it plans to announce its own slate of candidates by Feb. 21.