MEMORANDUM

To:
From:
cc:
Date:
Re:

Members of the Board

Colin Findley, Board Member
Dennis Bakke, CEO, and Roger Sant, Chairman
November 24, 2013
Support for company founders of AES Corporation

AES Corporation is facing one of the most difficult business circumstances in its 21-year history.
The company has a host of problems, both financially and socially, on a global scale. From the
California power crisis, to the fall of Enron Corporation, to the meltdown of the Argentinian economy
and its repercussions for AES across Latin America, the leadership team has a lot on its plate.
These combined factors have caused AES to lose 90 percent of its stock market value in the last
few years, and also recently lose an investment grade rating on its unsecured debt. Therefore, it is
not surprising that many members of the board and also many shareholders are calling for a
change in leadership and a new direction for the company.
I want it to be very clear that I fully support the founders of AES, Mr. Dennis Bakke and Mr. Roger
Sant, and the innovative culture and spirit that they have fostered within AES to make it one of the
most successful companies of the last decade. The concerns my fellow members of AESs Board
of Directors have with the current management style and the steps the company founders have
taken to deal with the crisis have merit, but I believe both Mr. Bakke and Mr. Sant have the skills
and experience to navigate the company through these troubled times. I urge that the AESs Board
of Directors give full support to the founders decisions on how to deal with current problems facing
the company.
It is true that Mr Bakke and Mr.Sant have created an unusual management structure and employee
culture compared to the average corporation. However, this management structure and employee
culture has fostered tremendous growth and success for most of the companys existence. AES is
the world's largest independent power generator and has one of the strongest and most respected
brand names in its industry. AESs values and unique honeycomb management structure have led
to high levels of achievement and a low turnover rate amongst its employees. Although there has
been criticism by industry analysts and financial journalists about AESs unique management
structure, the proof is there that the structure works. The company structure fosters company
growth by speeding up the processes of decision making, preparing and obtaining contracts, and
taking those contracts to completion. The system works, as company history shows, and although
the current company strucutre does need some tweaking to face the companys current external
problems, the founders realize what the problems are taken the necessary steps.
Our CEO, Dennis Bakke, is taking the steps to make sure AES not only survives its current crisis,
but also to stay competitive in an increasingly cutthroat business environment. Dennis Bakke has

taken the necessary first steps to reorganize the company to still fit the companys ideals and also
return it to profitability. Bakke stated in the most recent press release that we are taking
aggressive action to restructure and deleverage AES. Given todays market climate we are going
to rely on the cash flows of our solid operating businesses. We have taken additional steps to
provide a more substantial liquidity cushion. We believe the actions we have announced will
provide for a more conservative business model. I must remind you, the AES Board of Directors,
unanimously approved the steps to de-leverage AES and position the company to compete in the
future. It would be a mistake to turn against our founder and CEO after he has taken the necessary
first steps, which were approved by the board, to restore profitability while still trying to maintain the
values that the company was built upon.
There are voices from the Board that keep saying that the CEO is not doing enough in this time of
crisis. They are urging that the companys founders can remain in place, but that an outside
influence is needed to come up with strategies to change the company for the better. I
wholeheartedly disagree with this idea. The case of keeping the founders with the company, while
adopting new non-founder strategies would not work. The founders of this company have a
specific vision for AES, and that vision has led the company to great success. I believe that the
founders of the company would leave if the board decides to force new, outside values and a new
management style on them when times get tough. Both Mr. Bakke and Mr. Sant are both men of
outstanding character, and I cannot see them pushing changes that are not their own on a
company that they founded.
There are even some board members that want to force both founders out. I know we all
understand that AES was built from the ground up with a unique vision and business structure, and
removing the architects of this vision would cause chaos. The only way this would succeed is if the
board somehow is able to find a person that currently understands the companys values and
eases the transition to a new business structure, which would be no easy task. Would this not
potentially compound the companys current external problems by creating new internal ones?
Could the company survive an internal transition to a more standard management structure? Both
are great questions that all board members need to ask themselves when considering such an
extreme solution to AESs problems.
I believe that a company's board has a responsibility to recognize opportunities to please our
shareholders by increasing shareholder value in these troubled times, while still trying to maintain
the founders prospectus that the pursuit of integrity, fairness, fun, and social responsibility is more
important than profits. The only person that I am confident in to that pull this off is Mr. Bakke. In my
opinion, any further delay in doubting the plan of our CEO will reflect a lack of expertise on the
board. This is not a time for short term solutions or a total reinvention of the company. We must
trust that Mr. Bakke will implement the necessary changes to get AES and AES philosophy back on
the path to prosperity.
Sincerely,

Colin Findley
Board of Directors, AES Corporation
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