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Orica names interim CEO as Ian Smith departs

March 23, 2015
Chemical Value Chain
Explosives maker Orica has appointed non-executive director and former BHP executive Alberto Calderon as its interim chief executive following Ian Smith’s sudden departure.
 
Mr Smith was formally terminated today, after he last week stood down and admitted he had been too aggressive with staff.
 
He will now leave Orica immediately, after the company had originally intended he stay on until a replacement was found.
 
Orica (ORI) announced news of Mr Calderon’s appointment as it revealed it had postponed an investor briefing scheduled today, saying global markets remained volatile and uncertain and that fiscal 2015 profit guidance remained difficult to provide.
 
Mr Smith announced his departure last Wednesday amid allegations of an overly aggressive management style.
 
The move to appoint an interim CEO, foreshadowed by The Australian, was discussed by the board over the weekend.
 
The board had originally planned to keep Mr Smith in the chair until a replacement was found, but it realised there would be governance concerns over this strategy.
 
Mr Calderon has been a non-executive director of Orica since August 2013. His most recent executive role was as the head of BHP Billiton’s aluminium, nickel and corporate development divisions.
 
Mr Calderon was in the mix to replace Marius Kloppers as head of BHP but the board instead went with Andrew Mackenzie. He has not previously served as chief executive of a major mining company, but has previously sought the role.
 
“The board is pleased that Mr Calderon has agreed to step into the role of interim managing director and CEO,” Orica chairman Russell Caplan said.
 
“He is a global resources executive of high standing who has the skills and experience required to oversee the ongoing implementation of Orica’s strategy.”
 
All that was said in relation to Mr Smith and media reports of his temperament was that “both the board and Mr Smith have agreed that in the interests of minimising further distractions and enabling Orica to move on, Mr Smith will leave the company immediately.”
 
Mr Calderon said the importance of ensuring stability and operational continuity at Orica had been at the forefront of his discussions with the board.
 
“The ongoing implementation of our strategy will be my priority while the board continues the process of selecting a permanent CEO.”
 
The board has opted not to select chief financial officer Craig Elkington as the interim chief and instead hired resource specialist headhunter Swann Global to find a replacement for Mr Smith.
 
Mr Caplan said last week Mr Smith stood down because of managerial behavioural issues after an incident with a key executive in January.
 
Mr Smith admitted his management style had been too aggressive.
 
“It is sad, after all we’ve been through as a company, after we’ve set the strategy … and after all the work I’ve been doing with the board and chair over the years, to have that incident occur,” he told The Australian last week.
 
The January outburst is believed to have involved external relations head Karen McRae in the presence of then new communications manager Miche Paterson, both of whom subsequently resigned.
 
“It was a discussion that went from robust and forthright into me being a little bit too aggressive. I’ve apologised to the person,” Mr Smith said.
 
While the Orica board was locked in discussions about what to do with his role, Mr Smith spent last Thursday and Friday at a Transurban board meeting where insiders say he is a valued and highly successful director.
 
Last week, Mr Caplan said the board recognised Mr Smith’s behaviour did not always meet standards expected. “The issue is around direct behaviour, which can at times be over-aggressive,” Mr Caplan said.
 

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