Pryke to leave Contact board

Phil Pryke's decision to stand aside is understood to follow strong opposition from institutional investors to his continued involvement.

Contact Energy's [NZX: CEN] interim chairman Phil Pryke is to stand down from the board of the company he helped found 20 years ago, to be replaced as chairman by one of Australasia's most respected business leaders, Ralph Norris.

Mr Pryke's decision to stand aside is understood to follow strong opposition from institutional investors to his continued involvement.  They urged the company to use the departure from the share register of majority shareholder Origin Energy to pursue a fresh start.

"It is with a great sense of pride, and, I'll admit, a tinge of sadness that I have decided to retire from the board of Contact," Mr Pryke says.

"As part of the process to find and appoint new directors and a chairman, I have spoken with investors - large and small - to gather their input on the types of skills and expertise required to direct Contact in the future.

"While a large part of me would like to continue on as a director, now is the time for Contact to benefit from different expertise and fresh perspectives."

Mr Pryke said last month that while he would not seek reinstatement as permanent chairman at Contact, he hoped to be re-elected to the board at December's annual meeting. It appears that opposition to his candidacy made him change his mind.

Mr Norris comes to the Contact board after announcing he was leaving Fonterra's board in May. He cited the weight of other commitments for his departure. 

He was chief executive of the Commonwealth Bank of Australia from 2005 to 2011 and before that, its New Zealand subsidiary ASB Bank. A stint as chief executive of Air New Zealand occurred between the two banking roles.

Mr Norris's appointment is a first step in refreshing the Contact board following the sale by Origin Energy last month of its 53.4% majority shareholding in the NZX-listed electricity generator and retailer, which was the first state-owned power company to be privatised in a process that began in 1999. 

Mr Pryke was chairman of the establishment board that created Contact as a state-owned enterprise in 1995 and he had served as either chairman or deputy chairman since its inception.

He had returned to the chairman's role in an interim capacity following the resignation of Origin managing director Grant King at the time of Origin's exit.

However, Mr Pryke has faced long-standing substantial opposition from institutional shareholders, many of whom have long felt his actions as an independent Contact director were often too closely aligned the interests of the company's two foreign majority shareholders: Edison Mission Energy from California, and then Origin, who bought EME's stake in 2004.

His resignation means that only two of the seven person board that served during Origin's period of control will still be on the Contact board by year's end: former Chorus chair Sue Sheldon and former Fletcher executive, Whaimutu Dewes. One-time Origin director Bruce Beeren is to retire at the annual meeting.

(BusinessDesk)

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