FEW top 50 chief executives have copped as much flak as BHP Billiton boss Marius Kloppers (pictured). In the past 12 months, there have been leaks about him not being a team player, that he is "obsessive" and "controlling", and that his performance has deteriorated in the highly confidential Corporate Confidence Index.
There has also been speculation about his future. But the most curious leak appeared in the Financial Times midweek that a search firm was looking for his replacement. The article hit the headlines as a plane full of journalists were on the way to the US to tour the group's operations.
In all the media reports the company declined to be drawn on the specifics, but issued a generic response that BHP Billiton's board "has always ensured that it has a well-integrated, continual succession process in place for our most senior executives".
While it is true that one of the most important tasks of any board is ensuring a smooth succession plan, it raises questions about how BHP found itself in a situation in which its CEO is now be under intense speculation about when he will leave, and who will replace him.
As one analyst said: "The company's strategy will be sterile until the new bull comes in the gate." Another described him as being in the "departure lounge", while an investor said he was a dead man walking.
The company has just come through a major bull cycle, which it could arguably have used to better advantage in terms of the future. Much of this has been blamed on Kloppers, but they could not have been done without the imprimatur of the board.
Moreover, there has been some media and investment talk of tensions between the chairman and Kloppers, that senior management ranks have thinned out, and that the company's vision is not clear.
For obvious reasons BHP chairman Jac Nasser will be careful about his choice, as finding a replacement in such a big and complex organisation will not be easy, and Nasser's legacy will be judged by how well the new boss performs. (Kloppers was appointed when Don Argus was chairman).
But it will not stop the speculation about when he will leave. Indeed, rumours have already started to hint that Kloppers will be gone before the company releases its next set of results in February. Whether Kloppers stays for two months, a year or longer, the point is it is disruptive, and the board will need to shine a light on its own role in managing leadership risk.
Last time around, the board appointed two senior executives Chris Lynch and Kloppers to the board well before Chip Goodyear announced his departure. This time, the market has grabbed on to the news that Kloppers is on the way out, yet there does not appear to be any obvious contenders.
The BHP board is filled with some of the most respected Australian non-executives, including John Schubert, Lindsay Maxsted and Malcolm Broomhead. It also has some of the outstanding international directors, including its chairman, Nasser, and Carlos Cordeiro. Together they bring experience for which other businesses would give their right arm.
While a few of BHP's directors have been on the board less than two years, some have been there during its botched takeover of Rio Tinto, a failed iron ore joint venture proposal with Rio Tinto, a failed bid for PotashCorp, of Saskatchewan, and the more recent $US20 billion ($19 billion) shale gas purchases, including Fayetteville and Petrohawk Energy, in the US, the former resulting in writedowns.
It culminated in some investors opting to reduce their weighting in BHP. In March, the world's largest money manager, BlackRock, announced it had reduced its weighting in BHP. About the same time, Macquarie Equities released a strategy report revealing it had reduced its portfolio position in BHP from neutral to underweight. Part of the change in sentiment was due to an investor shift from growth stocks to yield stocks. Another part was due to BHP's expensive shale gas acquisitions, which raised questions about whether the purchases were poorly timed or whether the company misunderstood the dynamics of the domestic US market. Kloppers took a cut to his 2012 bonus due to the writedowns.
The issue for BHP is that as a mining stock it has been classified a growth stock. But with the Chinese economy slowing, commodity prices coming off their peaks and the costs of building and operating a mine ballooning, the game has changed and investors are chasing yield stocks and dumping so-called growth stocks.
Since Kloppers became chief executive on October 1, 2007, the group's share price has gone from $44.50 to close yesterday at $34.51. A year ago it was $38.33. With a yield of about 3.1 per cent, investors have become impatient, calling on the company to start diverting more of its cashflow their way through higher dividend payouts and share buybacks.
It will be interesting to see how BHP repositions itself, given that its assets are at the lower-cost end, making them less sensitive to commodity price falls than most of its peers.
BHP has put several projects on hold, including Olympic Dam and some of its iron ore expansions. It is not known whether this is due to a changing vision for the company or the board deciding to put off any serious decisions until a new CEO is found. Many believe that once a new CEO is appointed some of those projects will be revisited.
After all, many have a long lead time, so it is hard to see how short-term dips in commodity prices would have anything to do with it.
BHP has spent much of the past five years engaged with Heidrick & Struggles in assessing management capability, with the aim of building a pipeline of talent to close the gaps between what is available and what is needed.
But as one well-placed source said: "Can an organisation as complex and capital-intensive afford a CEO who is not a team player? Is the current furore around Kloppers just the tip of the iceberg? Are we really talking about the need to rethink the role, composition and work of the board in parallel with the CEO's replacement?"
They are interesting questions that will undoubtedly be answered in time.