The future of BHP Billiton boss Andrew Mackenzie has come under renewed scrutiny ahead of the miner’s AGMs, as its new chairman looks to further reshape the board.
Investors have urged BHP to begin succession planning as Scottish-born Mr Mackenzie approaches his fifth anniversary as chief executive – and 10th anniversary with the company – in March next year.
Mr Mackenzie, a former BP executive, has been under pressure to boost shareholder returns after activist investor Elliott Advisors began campaigning for a shake-up in strategy earlier this year. In June it called for Ken MacKenzie, BHP’s new chairman, to “review the executive management team”. The Anglo-Australian mining giant has been forced into a number of strategic reverses in recent months, admitting it would accelerate the sale of its costly onshore US shale assets and pause development of a potash fertiliser mine in Canada – plans that had been championed by Mr Mackenzie.
One BHP shareholder said: “The number-one item that comes up in conversation between investors is Mackenzie.” Another investor said BHP would need to look to external candidates when it pressed the button on a change at the top. “We think the culture within BHP needs a good shake, if not a change,” he said.
The new chairman, who took up the role in September and was previously boss of packaging giant Amcor, is understood to be encouraging board members to consider stepping down after nine years, in line with recommended best corporate practice.
This could see three directors announce their impending retirement in the next 12 months.
Coupled with two new board members who joined BHP last week, this would result in the departure of directors who sanctioned the miner’s heavy spending on US shale earlier this decade. Veteran analyst Peter O’Connor, of Sydney-based Shaw & Partners, said that on past form, a new boss was likely before May 2018.
“History suggests a CEO change is due,” Mr O’Connor said. “Andrew Mackenzie is coming up for five years as CEO and around 10 years at BHP – not an unreasonable amount of time as a CEO in the current turbulent corporate world.”
But Hugh Young, Singapore-based head of Aberdeen Asset Management, said: “Andrew Mackenzie’s doing a good enough job and five years is a short time for a CEO.”
BHP will go before its shareholders at its London AGM on Oct 19 and its Sydney AGM on Nov 16.
The company declined to comment.