Home » Behavioural Investing » BHP Billiton Gets Mouthy with Everyone. This Board let it Happen. $BHP

BHP Billiton Gets Mouthy with Everyone. This Board let it Happen. $BHP

BHP Billiton (NYSE:BHP) is in a number of public relations debacles. They have been held accountable for serious mining safety problems. People die working for these guys.

Supervisors at one of BHP’s coal mines in eastern Australia are planning to strike this week over an ongoing pay dispute involving base pay and overtime hours. This is the second strike in the past few months, after workers picketed for two weeks at BHP’s nearby Appin coal mine.

 BHP strongly criticizing the government of Papua New Guinea over an immigration ban and it has also publicly criticized its own Australian prime minister about newly adopted executive pay disclosure laws.

Sounds like they just take everyone on. This type of combative culture comes from board influence. So lets take a look at the board make-up.

Jacques Nasser is the former director, ceo, president of Ford. He also sits on the board of News Corp British Sky Broadcasting. He surely has signed off on the fisticuffs. Or he is defaulting into it without realizing which is even worse.

John Gordon St Clair Buchanan previously deputy chair of Vodafone, non executive director of AstraZeneca and Group CFO and Executive Director of BP PLC. Phone company, a drug company and one of the seven sisters. Surely he would have some insights into public fist fights and how not to get into them.

Carlos AS Cordeiro is a former managing director and partner of Goldman Sachs. Not an organization known for its public relations savvy.

David Alexander Crawford puts on his résumé the chairmanship of Australia Pacific Airports, Lendlease, National Foods, Fosters. non executive director of Westpac and national chair of KPMG. OK so we got public travel, food, beer and accounting. Engage the customer do not attack him usually works in these lines of work. The Senior KPMG guy rarely would counsel a war of words.

John Michael Schubert  chairs G2 Therapies and lists on his résumé independent non executive directorship Quantas, CEO and Managing Director of Pioneer, Chair of Commonwealth Bank, Chair and Managing director of Esso Australia.

Shriti Vadera is an independent non executive director of AstraZeneca.

Lawrence Patrick Adrian Davies is CEO of SASOL

Kieth Christopher Rumble was the CEO of RIOTinto Iron and Titanium as well as other mining companies. Surely he would understand how resource companies should portray themselves in the public eye.

Carolyn Judith Hewson is the Chairman of Westpac Foundation and former executive director of Schroeders Australia. From the investment world to a charitable organization she should know a thing or two about public and government relations.

Malcolm William Broomhead is the Chair of Asciano and formerly was CEO and Managing director of both Orica and North.

Lindsay Philip Maxsted former CEO of KPMG Australia and Westpac Banking.

So in reviwing the resumes of the board several things stand out.

  1. They all have had senior experience and should understand the public relations process. Somehow this ability is not translating into practical leadership from the board.
  2. No one has any substantive experience in safety culture. Dangerous business need to manage risks. Death is not acceptable. no one on the board seems to have his game.
  3. A lot of a accountants, investment and commercial bankers abound. This probably creates a hyper focus on numbers. Safety and public relations are not understood.
  4. A flavour of AstraZeneca manifests. Watch this hookup.

Regardless of individual expertise getting into a public war of words with the Prime Minister is just plain bad politics. Resource extraction needs to practice RealPolitik with a very heavy dose of Machiavelli. So far we get the opposite. Despite the value of the properties this may not be the correct leadership team at the board level to maximize shareholder wealth.

George Gutowski writes from a caveat emptor perspective. Follow him on twitter@financialskepti or maybe follow his evil twin who is writing a Wall Street Murder Thriller at twitter@georgegutowski

 

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