Among the myriad roles that could be ascribed to Australia’s wealthiest man, Andrew Forrest, salesman ranks well above the others. But being a conventional manager barely ranks at all. It goes a long way to explaining why there is a revolving door for executives of Fortescue and its renewables arm Fortescue Future Industries (FFI).
Forrest has masterfully sold his dream of saving the world from carbon-led extinction to plenty of talented, high-profile and similarly passionate executives who have joined team-Forrest.
But in the cult of Forrest not all disciples who sign on can operate under this messianic leader or within its governance structure.
The appointment of the former deputy governor of the Reserve Bank Guy Debelle as head of finance at FFI was a major coup for Forrest, thus his departure nine months later is an equally large loss, at least from a public relations perspective.
Debelle would have had his pick of corporate appointments or board positions, not least of which potentially taking on the top job at the RBA.
His decision to leave his executive post at FFI and “transition” to a board position has been explained as the need to look after his health after a biking accident.
Regardless of how many talented people it employs and the titles bestowed on them, Fortescue is ultimately governed by Forrest.
Regardless of whether people are buying it and although it is probably legitimate, it will still get caught in the tide of perception that Fortescue is dysfunctional.
Fortescue has never been a gold-star governance enterprise. Companies founded and controlled by a major shareholder rarely are.
Relatively speaking, it is still a maturing start-up, founded 20 years ago by a passionate entrepreneur who achieved the unthinkable by breaking into the iron ore duopoly controlled by BHP and Rio Tinto.
But regardless of how many talented people it employs and the titles bestowed on them, Fortescue is ultimately governed by Forrest.
Over the past 10 years as a successful iron ore miner, it had become financially strong and predictable.
But the birth of its renewables division, now funded from the proceeds of iron ore, has created a company with two personalities.
Crunching two cultures together is a tough call – even for someone with Forrest’s salesman skills.
As the most senior executive at Fortescue and its chairman, Forrest has to manage both sides.
To say Forrest’s life is chaotic is a wild understatement. Selling the dangers of climate-led catastrophe and convincing investors of the positive economics of green hydrogen is a full-time job for Forrest who jets around the world selling his message during whistle-stop tours and photo-ops with the globe’s most powerful people.
Doing all this while running a $60 billion iron ore company with more than 10,000 employees stretches anyone’s attention levels.
It is almost a year since former Fortescue chief executive Elizabeth Gaines announced she was stepping down from the role.
But after an extensive recruitment process, there is still no sign of a replacement, and based on Forrest’s comments at Fortescue’s shareholder meeting this week, he is in no hurry to hand over the executive reins to someone else.
As for the Forrest-curated Fortescue board, the departure of Debelle (regardless of whether it was health issues that led to the decision) should serve as a reminder that they are there for all shareholders.
In Forrest, Fortescue has plenty of leadership – but it must also be organised.
Roles and responsibilities need clear definition and detail is important.
Forrest has proven himself an adept collector of talent. But he needs to find a way to retain it.
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Source: Thanks smh.com