Critics say Landsvirkjun board cannot appoint new CEO

Björn Ingi Hrafnsson, an aide to the Centre Party leader, says Landsvirkjun’s board should not appoint a new chief executive while the company’s governance is under review and key questions remain about Hörður Arnarson’s departure, Mbl.is reports. Andrés Magnússon, representing the editor of Morgunblaðið, says a new CEO could also face a difficult position with the board.

Upheaval has emerged in the senior management of Landsvirkjun, described as the country’s most valuable company. The concerns were raised in a discussion on Spursmál.

Björn Ingi criticised the decision to continue the recruitment process under the current circumstances. He also pointed out that the board does not intend to publish the names of applicants.

“A board that does not enjoy trust, a minister in serious difficulty and fighting for survival […] and yet they still intend to decide who will lead the country’s largest company for years to come,” Björn Ingi said. He added that he did not believe this could be accepted.

Björn Ingi asked what would happen if further information led to Finance Minister Daði Már Kristófersson having to step aside. By then, he said, the board appointed by the minister might already have completed the appointment of a new CEO.

He described the appointment as taking place “under some kind of cover of darkness” after the board had, in his view, driven a successful CEO out of the company. Hörður had previously worked with many governments, finance ministers and boards without comparable problems, he said.

Andrés shared the concerns about trust in the recruitment process. Even if the conclusion were that everything had been done properly, he said, the company would also need to be seen as trustworthy and credible.

He stressed that Landsvirkjun was in a sensitive position and mattered greatly to everyone in the country. Its operations affected business development across the country and people’s daily wellbeing, making public trust in the company especially important.

Andrés also questioned what the relationship between a new CEO and the board would look like, given what had emerged about the board’s practices. He referred to meetings held without the CEO and reports that the board had spoken with the company’s customers and stakeholders.

“What position would the new CEO be in with this board, and what position would the board be in with him?” Andrés asked.

He questioned whether a new CEO could set clear boundaries around the division of responsibilities after being appointed by the board. Even if a highly capable person were found, he said, questions would remain about that person’s working conditions and relationship with the board.

Björn Ingi said the minister had options for responding to the situation.