Can energy become the lever of competitiveness that we so need? We speak with Arturo Gonzalo Aitiri, CEO of Enagás since 2022. He held various management positions at Repsol as general director of people and organization and general director of communication. He was general director of the Environment Agency of the Community of Madrid and held positions in the Ministry of Environment of the Government of Spain. He has a PhD cum laude in Chemical Sciences and has published five historical novels.
How are you, Arturo? Welcome. The pleasure is ours to have the CEO, the CEO of Enagás, a company that is known, admired for its high performance, high achievement. But perhaps, Arturo, not much is known about what Enagás's business model is, how Enagás has that success, let's say, in stock market listing, in its dividends, in its performance, but we don't know what the business model is. Can you help us?
With great pleasure, Iñaki. Our reason for being is to contribute to security of supply and decarbonization in Spain and Europe. And we do this first by being the operators of the Spanish gas system. We operate, we are owners of the high-pressure gas pipeline network, six of the seven LNG regasification plants in Spain, the underground gas storage. Therefore, that there is gas every morning to make economic activity possible and also provide well-being to homes depends on Enagás's infrastructure being ready. We will play this same role in the coming years with the deployment of the hydrogen network. We have been designated as the operator of the hydrogen network and we also carry out some non-regulated businesses that also have as a point of union, as a nexus, the gas value chain in terms of infrastructure. For example, we are a major operator of LNG infrastructure for maritime fuel.
In a way, in your answer you are explaining that the public and the private coincide in Enagás. The public because you have a public service mandate and the private because you serve families and businesses. Also in the company's shareholding there is the public and the private. How is that coexistence in these times when it seems that public-private collaboration is complex? Is it in Enagás?
We demonstrate that this coexistence not only can take place in a completely satisfactory way, but is essential to carry out long-term projects like those related to the energy sector. We are a private company, we are a listed company, we trade on the stock exchange, 90% of our shareholding is in free float, we are one of the IBEX companies with the highest free float, but we also have the state present with 5% through SEPI, since we are an operator of critical and strategic infrastructure. This concept is very important. Perhaps in the energy world there are also some requirements of large public policies, which is the strategic and long-term vision for a country. Therefore, we are a private company, but we are an instrument of public policies because security of supply must be guaranteed by public authorities. And in the large projects we carry out, such as now the development of the hydrogen network or the large European hydrogen corridors like H2Med, which we lead from Enagás with our partners from neighboring countries, these are projects that need the collaboration of public authorities, states, companies, and also society as a whole. That long-term vision, country vision, is something that brings together large energy infrastructure companies like Enagás and public authorities.
Of course, Arturo, these lessons of collaboration so interesting also have another lesson: the managers of these companies, like in your case, have years of preparation, decades of preparation, decades of high performance. Arturo Gonzalo did not become CEO of Enagás overnight. Did you study for it, have you prepared? You have had hard experiences of success, high performance. That is, these CEO positions in a company, as you explained, listed on the IBEX 35, but with an evident public service, require preparation and are also positions of high performance and high toughness, right?
The truth is that it is a privilege for a professional who, as Iñaki rightly says, has been working in the energy sector for decades, training in the energy sector, knowing the public and private side of the execution of energy policies, it is a privilege to be able to reach a position like this and be CEO of a company like Enagás. It is a privilege, but also an enormous responsibility. We have to do things very well, the entire organization and the CEO at its head, because having guaranteed gas supply is key for the lives of millions of people, tens of thousands of companies, and in general for the prosperity and well-being and I would say the project of freedom of a country like Spain and a continent like Europe. So I have great gratitude for the opportunity I have had, the opportunities I have had throughout my career to get here, but I am very aware that it is necessary to be very well prepared to take on a responsibility like this and to be up to the circumstances.
That experience you have in energy perhaps leads you not to be surprised by the volatility of energy prices. For the rest of us, it never ceases to amaze us, as if it's not geopolitics, it's supply interruption, if it's not some other consideration, and it seems like quite a feat to manage a company so linked to such a volatile asset as energy. How is the day-to-day of a CEO who has to manage all that? Are you looking at the price of that type of energy? Are you very worried about the day-to-day of that volatility or do you work with scenarios and more in the medium to long term?
Well, Iñaki, the truth is that in the energy field we have to combine a double vision that is not always easy, but is essential: a long-term vision because energy infrastructure takes many years to develop and then has a lifespan of decades. We need to understand these long-term cycles in energy because otherwise we would not know what the correct bets are to go to a decarbonized, competitive energy system that provides security of supply, strategic autonomy, for example, in 2050. Therefore, the long term is very important. However, Iñaki, it is true that we encounter surprises almost daily. For example, I was appointed CEO of Enagás on February 20, 2022. On the 24th, three days later, Russia invaded Ukraine and the world changed radically and we had to respond to that radical change of scenario in a very short time. What is important is to understand that these radical changes occur with increasing frequency. That transformation is increasingly part of the context. We are no longer talking about black swans, we are talking about transformation having become part of business as usual, whether due to major geopolitical disruptions like the war in Ukraine or since February 28 of this year the Gulf war, whether due to technological revolution, extreme weather events like the DANA of 2024 in Spain, or operational circumstances of the energy system like the blackout of April 28 last year. Therefore, Iñaki, Michael Ignatieff said we live in times of fracture and it is so from different angles. Preparing to respond to these disruptions and knowing how to have the capacity to absorb impacts and provide resilience to something as key as energy infrastructure on a day-to-day basis is also part of this challenge. So, long term, but capacity for response and resilience to daily disruptions.
That ambidexterity, those two hands that a CEO must have, thinking about the short term but also the long term, especially if you manage infrastructure, leads you as CEO to also have a double view of the national market but also Europe, the international concert. How is your relationship with your European colleagues and your European peers? If we can say that there are European peers to Enagás. Have you also maintained that double view towards the national but also towards the European, inevitable because of some of the projects you have with France.
I am convinced that Europe will have to provide more and more European responses to global challenges. And just as the energy sector has been very fragmented at the community level, when Europe became aware of responding to the challenge of the war in Ukraine or the uncertainties about security of supply caused by the Gulf war and the closure of the Strait of Hormuz, Europe now knows that it has to give European responses to these challenges. And in these European responses, a key agent must be the operators of energy infrastructure networks, and in the case of gas, the operators comparable to Enagás in other European countries. We therefore have a very close relationship with the equivalents of Enagás in our neighboring countries, in Portugal, France, Germany, Italy, and in particular some of the large strategic projects that will transform the face of Europe, that will usher in a new Europe in the field of energy, security, and strategic autonomy, we are carrying out with our neighbors. I speak continuously with my colleagues from Portugal, France, the Netherlands, Belgium, Germany, and I believe we are building a framework in which alliances will take place that will allow us to make Europe stronger and more autonomous in this future of strategic autonomy that we seek to protect ourselves a bit from these great geopolitical turbulences that originate from the fact that the large fuel producers are outside Europe and we are a large consumer and therefore vulnerable.
Let's talk about people and teams. High-performance companies are managed by teams, not by individuals, although many times the tip of the iceberg is the CEO, that face we recognize, but we are talking about high performance always being linked to teams. How have you managed people throughout your career? And how have you had to face moments that are not always simple when working with people, because not always are there pleasant news, there are complex conversations, sometimes you have to fire colleagues, and other times you have to have conversations that lead to improvement because otherwise the consequences are more drastic. What is your experience with people and what can you recommend in that area?
I have had the good fortune, Iñaki, that in my professional career I have had the responsibility of directing the people management area, for example, in a company like Repsol with more than 20,000 employees spread around the world. And that has made me understand very well the importance of putting the person at the center of the life of an organization, but doing this with all the consequences and providing the means, creating the organizational context so that people can truly be the protagonists of change. My greatest experience in this regard is, of course, now at Enagás, Enagás since 2022, and it was something already in the company's culture, but we put people at the center and we seek, and I as CEO am the main responsible for creating the organizational conditions of leadership, people management so that the Enagás team is truly the protagonist of this change and transformation. The learnings are innumerable and also become evident when we have to make difficult decisions or, as you say, give bad news. I think the main thing there is that the leader has a clear vision of exemplarity. That is, the leader must be an example for the organization, must have the interests of the organization above those of any person in the organization, and therefore making decisions is always something that can be explained when it responds to and seeks the long-term good of the organization. With those principles, with great knowledge of the matters on which the day-to-day of the company and the business of the company are based, with great empathy towards people and the determination to always put oneself in their place and create opportunities for them to give their best version. I think that allows teams to understand the decisions made and individuals to also feel protagonists of that process.
Of course, those requirements you cite to be a good leader are not easy, that is, they become a series of very difficult, very ambitious ingredients, because we now also incorporate that we have to serve many stakeholders, no longer just as CEO, employees, customers, suppliers, shareholders, society in general. We are more exposed as CEOs. Therefore, a derivative of all that I have just said is that the duration in CEO positions has been reduced. That's right. In the past, the CEO was for decades, each year it goes down a few months, down a year, and it is increasingly easier for a CEO not to continue in the first two years and the average duration is 4-5 years. It is a sword of Damocles when managing knowing that you are exceeding that average life of a CEO.
