Less than a week after shocking the market with a profit downgrade, the board of AGL Energy (AGK) has done the right thing and got rid of CEO, Paul Anthony, who promised much but delivered little.
By the same rules of accountability, perhaps the board of AGK might also now look to review its performance.
After all, Mr Anthony didn't walk into the CEO's role by himself. He was interviewed by board members and appointed by resolution of the full board.
Perhaps chairman, Mark Johnson, will explain the board's thinking behind the appointment, and why he was replaced at the soonest possible time.
He attempted to do so yesterday at a media briefing and in interviews and guess what, we are none the wiser.
There is an opportunity for further discussion on November 8, the AGM, and the new CEO, Michael Fraser, has promised more information on the company's problems by then.
AGL Chairman, Mark Johnson, said: "Michael Fraser is a highly experienced and respected energy industry executive, who has worked with AGL in a number of key roles since he joined the Company in 1984, most recently as Group General Manager, Merchant Energy.
"Michael Fraser's appointment reflects the Board's view that the Company would benefit from a new management approach to complete the execution of our strategy to build AGL into a world class integrated energy company."
That makes you wonder why the board didn't appoint him last year instead of Mr Anthony.
Yesterday's statement was far short on a realistic explanation.
The way it read leads the ordinary shareholder to believe that Mr Anthony had thought it time to go because he had achieved much of what he set out to do.
In the words of former Elders boss, John Elliott, that is pigs.
He was sacked and will be paid around $10 million to walk. How to fail in corporate Australia and be rich.
It could very mean there is a fault in the decision-making process on the board and shareholders will need assurance the same error is not repeated.
But five days after confessing to serious problems in the retail division which would lead to the bulk of a $50 million earnings downgrade, Mr Anthony has gone.
In a statement, Australia's biggest energy retailer said long term group senior executive, Michael Fraser, would take over as managing director and chief executive officer effective immediately.
Two newspapers Monday reported on Mr Anthony's departure on Friday after discussions with the board and Mr Johnson.
The trigger was last Monday's surprise earnings downgrade that saw AGL reveal that its 2008 profit forecast would be up to $70 million lower than Mr Fraser had said only two months before.
AGL said yesterday it was "highly unlikely'' to issue further earnings downgrades to its 2008 profit forecast, but given that we didn't know the downgrade was coming, that assurance has to be treated carefully.
AGL shares were down 15c to $12.90 at the opening in the weaker market. They eased upwards to finish off 9c at $12.96, within sight of the 2007 low of $12.83.
Mr Fraser told a media briefing that he had no plans to change the group's business strategy, following the snap departure of previous chief, Paul Anthony. Why would he, he hasn't got his feet under the table.
But you can bet there will be more staff employed and silly, overly optimistic targets will be made more realistic.
AGL completed a $6.3 billion asset and debt swap with Perth-based Alinta last year, has been aggressively boosting its stakes in gas fields and acquired several power generating companies in Queensland state, such as Queensland Gas Co. That was one of Mr Fraser's babies at AGL.
But the statement issued yesterday makes you wonder why Mr Anthony felt it time to depart. The chat in the newspaper articles was a dysfunctional senior management team and unrealistic targets for the company's divisions and managers to achieve.
From last week's statement it was clear the integration and marketing decisions in the retail business (the most important part of the company) had been botched and that the majority of the earnings loss resulted from those decisions.
There was some impact of from the higher Australian dollar and changes in the world oil market pricing, but it was in the controllable domestic businesses where the majority of earnings loss were reported.
That is at odds with this statement:
"Paul Anthony has secured many achievements at AGL and has established a firm base on which to build our growth and integration strategy.
"In discussions with Mr Johnson over the weekend, Mr Anthony agreed that having achieved much of what he was asked to do by the Board on his appointment, it was an appropriate time for a change in management."
Mr Anthony said, "I am proud of what has been accomplished during my period as CEO of AGL. I accepted the role determined to achieve significant structural change and growth for the business. I wish the Company and its shareholders every future success."
Mr Johnson said, "During his time as CEO, Paul Anthony played a leading role in advancing the Board's strategic objectives. He resolved the Alinta merger / de-merger process; increased the company's retail base with the acquisition of Powerdirect; increased generating capacity with the purchase of Torrens Island Power Station and increased AGL's interest in upstream gas reserves with the investment in Queensland Gas Company Limited.
"As a result, we have achieved substantial scale, improved balance between generation capacity and customer demand and a significant degree of integration earlier than originally envisaged.
"However, the circumstances leading up to and surrounding the revised earnings guida
