Santos facing scrutiny over claims CFO Sherry Duhe shown door after questioning Kevin Gallagher’s leadership

Santos boss Kevin Gallagher is facing renewed investor scrutiny in the wake of revelations the company’s chief financial officer was abruptly dismissed last week after raising concerns about his leadership style. Sherry Duhe, a former CFO at Woodside Energy and Newcrest Mining, left Santos suddenly after just one year in the job, with the company saying she had resigned to “pursue other interests”. However, Ms Duhe has told colleagues and friends she “gave Santos my best shot but in the end couldn’t reconcile my leadership style to Kevin’s”. In a text message first published in the Australian Financial Review and later shared with The West Australian, Ms Duhe said Mr Gallagher asked her to reconsider her resignation before chair Keith Spence intervened and told her to go. “Sadly, when I initially approached Kevin last week with my intention to resign, he and (executive vice-president, people and culture) Kim (Lee) both asked me to reconsider and asserted that he wanted to try to improve his leadership style, thus that I would stay,” she told a colleague. “But then I was informed over the weekend by the board chair that my services are no longer needed, effective immediately.” Santos did not immediately respond to a request for comment. Ms Duhe said her tenure at Santos had not ended “in the way I would have chosen” as she had been willing to work out her six-month notice period. According to the AFR, she refused to sign a non-disclosure agreement, potentially forgoing a lucrative severance payment. Mr Gallagher has run Santos for the past nine years and wants to remain at the helm until at least 2027. However, MST Marquee head of energy research Saul Kavonic, who has previously questioned Santos’ management and performance, said Ms Duhe’s departure was “another major governance and culture red flag” that should prompt questions about the need for a new leadership team and board. The Santos board “appears to have effectively fired a whistleblower who raised concerns regarding culture, governance and CEO leadership”, Mr Kavonic said on Tuesday. He said Santos had now lost two internal succession candidates in as many years, following the departure of Brett Woods for Beach Energy two years ago. “It is the board’s job to ensure CEO succession candidates are retained, and this is now the second failure in as many years on that front,” Mr Kavonic said. Ms Duhe’s exit comes at a difficult time for Santos, which is under renewed pressure to improve its returns following a second failed buyout in as many years. Last month, an Abu Dhabi-led consortium quit its indicative $29 billion offer at $US5.76 ($8.69) a share for Australia’s second-biggest oil and gas company after three months of due diligence. The Santos board had endorsed the offer, and opened up its books for due diligence. However, the consortium eventually walked away because of “a combination of factors”, including frustration over Santos’ insistence that the consortium assume liability for a capital gains tax payment due to the PNG Government next year and media disclosures last month of a methane leak at Santos’ Darwin LNG project. It is believed the issues had materially affected the offer price and undermined the bidders’ confidence in Santos’ disclosures. Santos shares closed 1¢ lower at $6.32 on Tuesday.