Mysterious exit of Fortescue CEO shows Forrest’s iron grip

Hosting Fortescue’s 20-year birthday party at the Pilbara on Saturday night, chairman Andrew Forrest’s showmanship was dialled up to max, but his candour meter not so much.

Which seemed a bit strange, until Fortescue delivered another management shock on Monday, with Fortescue Metals Group chief executive Fiona Hick becoming the latest senior executive to find the exit door. Hicks’ tenure lasted less than six months.

Fiona Hick with Andrew Forrest in November, when she was announced as Fortescue Metals chief executive.
Fiona Hick with Andrew Forrest in November, when she was announced as Fortescue Metals chief executive.Credit: Tony McDonough

Maybe Forrest, who made his entrance at the Pilbara party on a massive dump truck, waving a company flag, didn’t want to spoil the mood on Saturday, with 700 VIPs invited to marvel at the speed at which he had created a $61 billion ‘third force in iron ore’.

While Forrest belted out songs with rock veteran Jimmy Barnes, Hick’s future at Fortescue had already been sealed.

Executive turnover has been a recurrent theme inside Fortescue, one which Forrest once referred to as “natural selection”. Forrest has been honest enough to concede in the past that some executives were not the right fit for Fortescue, which is attempting to morph from an iron ore company to a renewable energy innovator.

Hick would have been acutely aware of this before she put her feet under the desk at Fortescue in February. At the time of her appointment, she assured us she was “not concerned” that only three of the 11 people on the 2020 executive team remained three years later.

Most notable exits at Fortescue included those of former Reserve Bank deputy governor Guy Debelle, who resigned as chief financial officer of Fortescue’s green arm, Fortescue Future Industries, and Ian Wells, who had been CFO of the iron ore division.

Governance has never been a textbook affair at Fortescue. Individual executives, picked for formal roles inside the company, may be supremely talented, but the real decision-making at Fortescue rests with its largest shareholder and executive chairman, Forrest.


Further complicating governance, executives have to work inside a company that has two agendas – the first maximising the profits from iron ore and the second, undertaking risky decarbonisation projects funded by those massive iron ore revenues.

Each arm of the company needs to fight for the capital to pursue growth ambitions.

Rock legend Jimmy Barnes performing at Fortescue’s 20th anniversary celebration.
Rock legend Jimmy Barnes performing at Fortescue’s 20th anniversary celebration.

Hick, who was in charge of the iron ore arm of the business, would have taken the job with her eyes wide open. However, her premature departure will need to be explained. The company’s disclosure hygiene is clearly lacking, as analysts who attended Fortescue’s full-year results announcement on Monday were left unsatisfied.

What we do know is that at the end of last week, Fortescue’s senior management and board held a three-day talk fest at which Hick’s future was clearly a topic of discussion. By the end of that process, she was no longer the chief executive.

While it has been described as a mutual decision between Hicks and the board, the reality is that these things rarely are.

Hick on Monday wasn’t giving anything away, posting on social media that she valued the opportunity at Fortescue but was looking forward to spending time with family and friends.

Meanwhile, Fortescue was spinning the latest reshuffle at the top as an opportunity to promote its chief operating officer of two years, Dino Otranto. Answering the obvious question about why this wasn’t done six months ago, instead of appointing Hick, Forrest maintains Otranto was not ready.

Without any real explanation, the void was filled by numerous conspiracy theories. Was it connected to the $1 billion write down in Fortescue’s Iron Bridge project? Was there a personal falling out between Forrest and Hick?

Iron Bridge ended up costing $US4 billion to build, way above the $US2.6 billion expected in 2019 and was also about a year behind schedule. The impairment dragged the company’s $US5.5 billion underlying profit down to $US4.8 billion.

Or did it have something to do with Fortescue’s abandonment of its previous policy that 10 per cent of the iron ore profits be allocated to the green arm of the company?

Forrest says he isn’t concerned about the unfortunate optics of executive turnover. Which is understandable because that’s just not how he rolls.

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