FOLLOWING the footsteps of Andrew Forrest must be one of the hardest gigs in town.
Not only does Fortescue Metals Group CEO Nev Power have to live up to the performance of the company’s high profile, he has Mr Forrest watching him closely as FMG’s chairman and biggest shareholder.
It is the sort of arrangement that would make many executives uncomfortable, but Mr Power suggests he appreciates the star power Western Australia’s richest man has, both inside and outside FMG.
So, unlike many new CEOs who want a clean slate to start, Mr Power admits that having the founder around is helpful in meeting the targets set for him – most notably tripling the company’s iron ore production to 155 million tonnes per annum.
“The single biggest challenge I have is to continue to sustain the culture, in fact grow the culture that we have here in the company,” Mr Power said.
“It’s a very powerful culture and it’s one that differentiates us from other companies, therefore it’s really important for us to go forward.
“It’s a culture that’s come out of an entrepreneurial and family company, and if we can preserve that culture as we grow, we’ll have an enormous differentiator. We’re already seeing that it attracts people to the company and keeps people in the company, because we move fast, we empower people to make decisions and to use their brains and not their chequebooks to solve problems.
“The important part for me is to understand how I can sustain that as we get bigger, and having Andrew around as the start-up founder and the great visionary of the organisation is a tremendous resource to be able to tap into.
“So whether it’s standing up on the back of a ute on site, rallying the troops, representing in some difficult negotiation with government or in fact just the door opening-power that he has with so many different organisations around the place, there’s some tremendous benefits in that.”
It is not just Mr Forrest in this respect, Mr Power adds, pointing out that another of the company’s founding executives, Graeme Rowley, remains on the board and is equally important in keeping the company grounded.
Mr Power recounts that he has been in a somewhat similar position before, working for Smorgon Steel when the family floated it but retained 30 per cent.
“I think the other major value having the founder and major shareholder so close to the organisation as a chairman is that we know where those shares are getting voted; so we understand that he’s passionate about the company and still on the road to developing his vision; so we’re not trying to second-guess with a whole bunch of M&A activity in the background distracting us from what we need to do,” Mr Power told WA Business News.
When it comes to Mr Forrest’s hands-on role in terms of dealings with outside parties, such as controversial negotiations with indigenous groups and government, the new CEO believes that who performs which role within the leadership depends on the circumstances involved.
“I have been involved in some of the native title discussions already, directly involved, and I’ve been up to meet a number of people, sit down with them and discuss how it’s going, where it’s going, what their expectations and what our expectations are, and making sure that we are doing that,” Mr Power said.
“At the same time Andrew has continued some involvement where he’s had some strong relationships in that.
“But to give another example, we’ve recently concluded a land access agreement for our magnetite project, and that was managed by the approvals team and the heritage team independently. So it really depends on the circumstances, each one of those, but certainly I would look to be involved to the point of knowing the players, knowing the community and knowing and understanding what they are and making sure that we meet their expectations and vice versa so there were no major surprises in that.”
Mr Power is clearly part of a major transition for FMG as it moves from being a start-up to a major miner. The leadership of the past has seen the company grow from nothing to become a globally recognised player, and have become rich for their efforts.
Mr Power believes the mixture of old and new blood, just like that between himself and Mr Forrest, has advantages.
“We’ve got a very strong, experienced, and talented executive team, and they really are a remarkable team,” he said.
“And likewise, on the board, we’ve got diverse backgrounds on the board so you get a very, very rich set of experiences and advice coming back through both of those.
“And Fortescue’s about that, it is about making sure we tap into everybody’s wisdom and experience to make those decisions so they’re not one-out decisions by me or Andrew or anybody else.”
Mr Power acknowledges there may be different appetites for risk among the entrepreneurs who have significant wealth tied up in the company, compared with more recent arrivals who are more traditional employees with much less skin in the game – notwithstanding Mr Forrest’s unusual recent efforts to change that by buying shares for his management team.
“I’m certainly an investor in the company; I couldn’t think of a better thing to invest in, in terms of shares,” Mr Power said.
“That’s important to me on one level; and on another level I’m here as part of the organisation and I feel just as much a part of it and I own just as much of the history of it as those founders did.
“So I don’t feel any different to how they probably felt, irrespective of whether I was a founding shareholder or someone who has come in more recently.”
