The appointment of Marius Kloppers as the new chief executive of BHP-Billiton is at one level a sensible promotion for an experienced and tough professional mining man. However, it also continues Australia’s unique trend of having to import more of its top CEOs than any other developed country.
London-based Rio Tinto has just replaced Australian-born CEO Leigh Clifford with American Tom Albanese, and now Melbourne-based BHP has opted for a South African to replace incumbent American CEO Chip Goodyear.
Poor old Melbourne is the worst offender, given that its four biggest listed companies – ANZ, BHP-Billiton, NAB and Telstra – are still all run by foreigners.
BHP-Billiton chairman Don Argus is clearly a patriotic man given that he reportedly offered the gig to our most impressive home-grown global CEO, Dow Chemical boss Andrew Liveris.
Whilst Australia struggles to produce genuinely global companies or CEOs of our biggest companies, we are very good at exporting executive talent. After all, over the past decade, Australians have run the likes of Ford, McDonald’s, Philip Morris, Kelloggs, Coca-Cola, Campbell Soup, Allied Domecq, Scottish Power and Silicon Graphics.
Whilst a global mining man like Kloppers was probably a better alternative to a home-grown number-cruncher like BHP finance boss Chris Lynch, the appointment does stoke some controversial coals.
The merger of BHP and Billiton was a disastrous deal that has cost Australia tens of billions because the South Africans — including Kloppers, but led by Brian Gilbertson and current Xstrata boss Mick Davis — out-negotiated the BHP board back in 2001 by extracting a $5 billion premium.
Then, over the next six years, they enjoyed a second windfall as the BHP iron ore, copper and oil assets in particular delivered huge profits to the merged entity.
Don Argus rammed the merger through on the grounds that the Big Australian needed to buy the top Billiton management team to fulfill its potential. Having quickly lost Davis and Gilbertson, it would have been even more embarrassing if Kloppers had been overlooked and subsequently walked out.
Can anyone else think of a country that boasts a “biggest company” that has had to import four CEOs in a row? Sure, the last Aussie BHP CEO, John Prescott, was bad, but the Australian mining industry seems to have been negligent in not producing more talented executives to develop and operate our magnificent dowry. Instead, we have a resources industry that is majority foreign-owned but with a domestic component that is now also largely run by foreign CEOs.
If this was sport, we’d all be up in arms.
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