BHP is rumoured to be close to announced Jac Nasser’s successor, with board newcomer, former Amcor boss Ken MacKenzie, said to be the frontrunner.
Elliott noted that there had been growing calls for change from BHP shareholders in recent weeks, with the likes of AMP Capital, Tribeca Global Natural Resources, Schroders Investment Management, Escala Partners, BT Investment Management and Aberdeen Asset Management joining the chorus.
Elliott said today that the impending selection of a new chairperson provided BHP with an opportunity to heed the calls of shareholders and conduct a “thorough and independent re-examination of its business and its governance”.
According to Elliott, the new chair should initiate an independent review of the petroleum business and explore the separation of the US oil and gas operations, unlock BHP’s franking credit balance by unifying the dual listing, develop a capital return plan that protects the balance sheet and prioritises shareholder returns, and refresh the board of directors.
Elliott said protecting and growing the investment of shareholders was a weighty charge and one that the board had failed.
“BHP recently rolled out a $10 million branding campaign called ‘Think Big’,” Elliott said.
“We would prefer BHP to ‘Think Smart’ by addressing the company’s underperformance holistically and putting shareholders first.”
Elliott said the appointment of a “strong, experienced, and visionary chairperson” would be a welcomed first step for BHP.
“But it would only be a first step. BHP has an entrenched board, with long-tenured directors having approved the disastrous acquisitions and poorly timed share buybacks that are at the root of much of today’s underperformance. A significant upgrade in directors is needed,” Elliott said.
“The way forward for the next chairperson is clear.
“That person will need to address the company’s poor capital allocation and underperformance, nominate diverse and qualified directors, and review the executive management team.
“BHP’s shareholders have sent a clear message to the board and management team: it is time for change at BHP. We hope the board will listen.”
Shares in BHP were up by A14c this morning to $23.81.
