EnCana (NYSE:ECA) got a new boss today. Doug Shuttles formerly of BP got the nod after a six month search by the Board. Doug Shuttles was formerly chief operating officer for exploration and production, was named president and CEO. He fills the vacancy left by long-time President and Chief Executive Randall Eresman. Randal Eresman left after a 35 year career with EnCana after a poorly executed expansion within the gas business as prices declined. A cash cow in the oil business was sold off.
So the board that fired him is the same board that signed off on Randal Eresman’s strategic vision which did not work. Doug Shuttles is known as a fixit type will probably look at fixing the board before too long. she who he will pick and who he will spit out.
David O’Brien 71 Chairman obviously signed of on Doug Shuttles. But at 71 how much longer does he want to keep active in high stakes business. Watch for him to retire in dignity. David O’Brien will also probably become Chairman much to the chagrin of governance experts. David O’Brien also sits on the board of Royal Bank of Canada which is an important corporate hook up. So someone who is well connected with Royal Bank will probably get an EnCana seat.
Two other directors also hold seats on large Canadian financial institutions. Jane Peverett 54 sits on the Canadian Imperial Bank of Commerce board as well as BC Ferry Authority, Postmedia Network and Northwest Natural Gas. An important West Coast power broker will most likely stay. Brian Gordon Shaw 59 also sits on board of Patheon and Manulife Bank another large financial institution. An alumni of CIBC World Markets (Read Wood Gundy) A long-time Toronto based financial wheeler dealer. But you know what. So what. If you were so good with numbers how come you signed off on the last set of disasters. EnCana can get to capital markets without this guy.
Fred Fowler 66 sits on boards for Spectra Energy and Pacific Gas & Electric. EnCana needs access to political clout to punch through the pipelines. This is not the right guy.
Suzanne Nimocks 54 sits on the board for Arcelormittal who provides steel for pipelines. The vendors do not need to sit on the board unless they can bring financing to the table and very preferential terms. In the meantime she also sits on the board for Owen’s Corning, Valerus Compression Services and the Houston Zoo. Probably a keeper for now. Younger female plays to her advantage. That pipe better be cheap.
Peter Dea 59 has no other corporate connections indicated on his profile. So what does he bring to the table.
Claire Scobbee Farley 54 sits on boards of FMC Technologies, Samson Resources and Sonic Industries. An energetic women with roots in the energy business. So unless she helped guide some of the more ill-considered ventures of recent past she will be pick and keeper.
On balance the board seems anemic. A strong management team had been able to run over them. Governance Karma says most will be good within a year. Next AGM late April 2014 isn’t it?
George Gutowski writes from a caveat emptor perspective.