Combat or consensus: Cannon-Brookes’ team to meet this week with AGL

Loading

Cannon-Brookes will clearly want the AGL board to accept his request for two board positions, and has already got a list of preferred candidates drawn up. But interestingly, he is not asking for either of his nominees to be the chairman, and is happy for that role to be taken by an independent.

It seems likely the names of his candidates will be handed to Botten and Sullivan at this week’s get-together.

What is more difficult to assess in this muddy governance situation is who has the balance of power.

The current board doesn’t really have a mandate to do anything, and Cannon-Brookes has an 11.2 per cent stake – which alongside some shareholder allies was sufficient to stop AGL’s board from demerging, but is not enough to set the corporate agenda.

Thus Cannon-Brookes would be keen to get his candidates around the board table in order to have a say on who will take the most important roles in AGL – that of the new chairman and the new chief executive. (The current chief executive, the badly bruised Graeme Hunt, announced he was leaving when a replacement was found.)

There is already talk that AGL’s chief operating officer Markus Brokhof would be the most likely internal candidate to replace Hunt, and while the Grok camp recognise he is a talented executive it is more likely to push for fresh executive blood at the top.

Stage two of the masterplan

Given Grok can not exercise outright control of AGL, it understands this will need to be achieved by consensus.

Cannon-Brookes has managed to foil the demerger plans, but stage two of his master plan to bring forward the decommissioning of the company’s coal-fired power plants by ten years and have it invest billions of dollars in renewables can’t be achieved unless the board and management agree.

Loading

Investment bank UBS has suggested that Cannon-Brookes sees AGL as an opportunity to harness technology to develop an energy trading platform, which uses artificial intelligence to orchestrate all the power generated by households.

Fascinating as this sounds, Grok is still a long way from exercising this level of influence.

In the meantime, there remains a possibility that AGL could become the subject of a takeover bid, but if Cannon-Brookes gets two seats on the board, he would have the ability to block any deal.

All this goes to demonstrate that Cannon-Brookes has so far only won a mandate to stop a demerger. He will need more say before he can stop the company selling off one of its two businesses, and even more influence before he can dictate the minutiae of its operations.

No wonder he is now all about consensus building.

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.