Stephen Bartholomeusz
BHP's anointed one
Eighteen months after it began, the process to appoint the next chairman of BHP Billiton has ended with the anointment of Jac Nasser to succeed the long-serving and highly successful Don Argus.
The unusual process – one of the longest and most thorough conducted in this market – was overseen by BHP’s senior independent director, the UK-based Dr John Buchanan. It involved independent advisers, Heidrick & Struggles, a secret ballot conducted by KPMG, and was ultimately a very close contest between Nasser and Commonwealth Bank chairman John Schubert.
The board was spoiled for choice. Both men had outstanding claims on the chair of the world’s largest resource house and either would have been endorsed by shareholders and the market-at-large, despite their significant differences.
In some respects Schubert, a more deeply-known quantity in the Australian market, might have been the more conservative choice and a natural successor to Argus as a calm, controlled and immensely experienced boardroom presence. He has had petroleum experience, with senior executive roles at Exxon and international experience as CEO of Pioneer International.
Nasser, who started with Ford at Broadmeadows and who ran the Australian operations in the late 1980s and early 1990s, is the former president and chief executive of Ford Motor Company who transformed Ford into an industry leader and earned the sobriquet ‘’Jac the Knife’’ for the radical overhaul of Ford’s global operations. He was regarded as the best executive in the motor industry when he fell out with the Ford family and left the group in 2001.
Outgoing, deeply connected with international business and brought into the BHP boardroom by Argus (who had previously sponsored him onto the Brambles board that Argus chaired) he is, perhaps, the more charismatic of the two who contended for the chair. He certainly has the less conventional CV.
Schubert’s tenure on the board – he joined in 2000 – may have counted against him, given that by the time his tenure as chairman could have ended he would have been on the board for a decade and a half - although he would have some useful memory of the traumas BHP went through as it recovered from its flirtation with disaster at the end of the 1990s. Nasser joined the board in 2006.
Nasser’s great appeal, apart from an apparent willingness to largely relocate from the US to Melbourne, would be his deep experience of running a global business.
Argus, who was the young and newly-appointed man in the boardroom when BHP made an entire series of disastrous decisions in the 1990s, would be conscious that a contributing factor to the mistakes made in BHP’s past was that it was an Australian company with international operations but hadn’t managed the transition to becoming an international company with the systems and processes and mindset to managing an international portfolio.
After Paul Anderson and Chip Goodyear’s terms as CEO, and the merger with Billiton, BHP is today a global group that thinks, and operates, as a global set of businesses.
Nasser’s experience in managing a vast global company in a very challenging and fast-changing sector and his demonstrated preparedness to contemplate radical and continuous change, could enable him to make a unique contribution to BHP’s next phase of development.
That he isn’t quite as deeply enmeshed in Australian business and political circles as Schubert, as past president of the Business Council (which is not to say that he isn’t engaged locally) is not necessarily a negative. At 61 he also has time to make a significant contribution as chairman – Argus will have served nearly 11 years in the chair by the time he retires after a staged handover early next year.
With a young, dynamic and aggressive CEO in Marius Kloppers, the next chairman of BHP had to act as a counter-balancing force within the group. Both Nasser and Schubert, from those who have seen them operating within the BHP boardroom, would be very capable of performing that role.
Argus, a stickler for propriety and corporate governance who wasn’t involved in the succession process beyond its establishment, doesn’t appear to have any strong personal preference for either candidate, content that either would look after the group he has played such a major role in developing.
Argus will go down as one of the great chairmen in BHP’s history, presiding over its passage from the big but mistake-prone BHP to a company of global scale and importance.
An economic nationalist of sorts, Argus would be well-pleased that the choice was between two Australians with deep local connections and experience and the outlook on the sector that comes from some of experiencing of living and operating within a resources-dependent economy.
Related Industry Sectors
Related People
Related Companies