Elliott takes another jab at BHP with push to "upgrade" board ahead of its new chairman

Courtney Goldsmith
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Elliott is calling for changes to BHP Billiton's board (Source: Getty)

Activist investor Elliott Advisors today urged BHP Billiton to "upgrade" its board ahead of a new chairman's appointment this week.

Elliott said a "strong, experienced and visionary chairperson" would only be the first step in its vision to overhaul the board.

"BHP has an entrenched board, with long-tenured directors having approved the disastrous acquisitions and poorly timed share buybacks that are at the root of much of today’s underperformance. A significant upgrade in directors is needed," Elliott said.

The New York-based firm first outlined a plan for unlocking shareholder value in April. Its recommendations included unifying the company into a single Australian-headquartered firm, demerging its US oil arm and revising its capital return policy.

BHP said Elliott's claims were overstated.

Australian wealth management group Escala, hedge fund Tribeca Investment Partners and a number of other shareholders have also pushed for a revamp, Elliott said.

AMP Capital, an Australian fund manager, asked BHP to conduct an "independent assessment" of Elliott's proposals in a note to investors.

BHP's board is expected to select a new chairman imminently.

"The way forward for the next chairperson is clear. That person will need to address the company’s poor capital allocation and underperformance, nominate diverse and qualified directors, and review the executive management team," Elliott said. "BHP’s shareholders have sent a clear message to the board and management team: it is time for change at BHP."

The FTSE 100 miner has previously said it is committed to a "structured and rigorous approach" to board succession and planning in regard to the skills, experience and attributes required to effectively govern the business. With the exception of chairman Jac Nasser, who will step down later this year, the average tenure on the board is about four years.

BHP declined to comment on Elliott's statement.

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