Under fire Woodside chair Richard Goyder warns strategy change would destroy value

Woodside chair Richard Goyder says shareholders would be hit hard by a rapid shake-up of the company’s strategy as he fights off a climate insurrection.

The businessman has been under pressure ahead of Woodside’s annual meeting later this month after proxy firm CGI Glass Lewis recommended shareholders kick him off the board.

CGI hit out at the Perth-based company’s climate engagement and Mr Goyder’s role as chair of Qantas in a troubled year for the airline. Some investors have announced plans to vote against Mr Goyder.

Mr Goyder responded again on Tuesday morning, this time in a direct letter to shareholders.

“We are concerned that some stakeholders’ and investors’ requests to drastically change Woodside’s strategy and investment priorities risk eroding value for all shareholders and contributing to a disorderly energy transition,” he said.

“The energy transition will take time and significant investment, and I am confident that Woodside’s disciplined approach is the right path for our shareholders.”

Woodside had endured a series of tight votes linked to climate policy at recent annual meetings, including an unusually large protest against director Ian MacFarlane last year.

Mr Goyder said climate change was “an urgent global challenge”, and the company had stepped up engagement in response to shareholder requests.

Woodside has promised $US5 billion ($7.8b) of investment into green and low carbon energy by 2030. The business is also developing a huge gas project off the Pilbara coast at the Scarborough field.

That’s led to the ASX20 company coming under pressure from environmental activists.

CGI also advised investors to vote down Woodside’s climate strategy.

Australian Centre for Corporate Responsibility executive director Brynn O’Brien said at the time that Woodside had been determined to bet shareholder money against the energy transition.

Mr Goyder’s argument points to the broader economic challenge of decarbonisation.

Green hydrogen is yet to earn commercial success. Woodside delayed a final call on the H2OK project in Oklahoma last year and questions hang over the future of the H2Perth development.

Demand for gas has also been strong amid the energy transition, with the fuel used for flexible power generation which can firm up renewables — helping replace inflexible baseload coal plants.

The International Energy Agency has forecast global gas demand will grow 2.5 per cent this year, with falling prices helping boost industrial buying.

A series of investors and advisers have backed in Mr Goyder since the proxy war started earlier this month.

The non-profit Australian Shareholders Association — which advocates for retail shareholders — last week said Mr Goyder “has been good for Woodside”.

Industry super fund HESTA and Australian Council of Superannuation Investors backed Mr Goyder, but warned Woodside would need to improve its climate strategy.

Mr Goyder also touted Woodside’s financial management, pointing to the mega merger with BHP’s petroleum arm in 2022.

Woodside had paid almost $US4 in dividends per share since the merger, he said.

“This amounts to US$7.5 billion (equivalent to A$11.2 billion) distributed to our shareholders,” Mr Goyder said.

The company’s stock closed down 1.25 per cent on Wednesday at $29.93.