Glencore female director marks progress

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IOL BR HMorrGlencore

Mining companies, long laggards in appointing women to their boards, are starting to catch up under pressure from corporate governance groups and activist shareholders.

The latest is Glencore, the Swiss commodity trader, which appointed mining executive Patrice Merrin on June 26.

Prior to her arrival, Glencore was the last company left on the UK’s FTSE 100 index with an all-male board. At the start of last year, five of the seven groups on the index without female board members were mining companies.

Now all five have at least one female director.

“If a board has open spots and open-minded men, finding outstanding women is the easy part,” said Beth Stewart, a former Goldman Sachs investment banker and founder of executive search company Trewstar Corporate Board Services, which focuses on placing female directors.

Merrin’s appointment, and her public endorsement of the goal to appoint women to a third of all board seats, is a milestone for the $80 billion (R854bn) company, which is run by billionaire Ivan Glasenberg, and may open opportunities for more female directors.

Glasenberg’s company had been a lightening rod for criticism from activists, shareholders and UK business secretary Vince Cable for its all-male board. The appointment of the 65-year-old Canadian last month enabled Glencore to shed its status at last as the only company on the index lacking a female director.

 

Studies increasingly show that women on boards is not just good for a company’s image; it is also good for business.

Mixed boards contribute to stronger financial performance, according to a 2012 report by Credit Suisse.

In the previous six years, companies with a market value of more than $10bn, with at least one woman on the board, outperformed those with all-male boards in terms of share-price performance, the report said.

Mixed boards also had a higher return on equity, the report showed.

Finding qualified women to join the boards of mining companies should be no different from any other industry, said Stewart.

Since last year, Trewstar has placed 15 women on corporate boards and recently placed a female director on the board of Mosaic, the largest American producer of phosphate fertiliser.

When Mosaic chairman Bob Lumpkins approached Stewart about finding a woman for the board, he was sceptical she would find one suitable for what he called a “dirty-fingernails business”, she said.

“Within a month we had 10 candidates for him. He interviewed three, all of whom would have done well.”

Eventually, the board chose 47-year-old Denise Johnson, the vice-president of the integrated manufacturing operations division at Caterpillar. She’s now one of two women on the board of Mosaic.

 

Merrin, who joins former Morgan Stanley chief executive John Mack and former BP chief Tony Hayward on Glencore’s board, brings more than a strong voice on women’s representation to the table.

Those who know her point to decades of experience as an executive at mining, energy and health care companies, and a reputation for an unyielding stance on corporate governance.

Merrin “understands the inherent cyclicality of the mining business and she is incredibly attentive to the importance of the social licence to operate”, said Margot Naudie, a Toronto-based portfolio manager who has known Merrin for more than a decade and who helps oversee about $2.8bn at Marret Asset Management.

“This is a very astute appointment.”

 

And it likely won’t be the last.

“I suspect they will be following it up with a second announcement before the year is out,” said Helena Morrissey, the founder of the 30% Club – named after its target for female representation on FTSE 100 boards by the end of next year.

“I hope that they are widening the net to include people who perhaps don’t have direct mining experience.”

Peter Grauer, the chairman of Bloomberg LP, the parent of Bloomberg News, is a non-executive director of Glencore.

He is also the founding American chairman of the 30% Club, which started in 2010 in the UK.

Born in Toronto and raised in Fort Erie, near Niagara Falls, Merrin began her career in the mid-1970s working for Marc Lalonde, Canada’s minister for the status of women. Lalonde later become Canada’s finance minister.

More recently, she has been the chairwoman of CML Healthcare, an Ontario-based diagnostic services provider.

In that role, she shepherded through last year’s $1.1bn takeover by Lifelabs Medical Laboratory Services.

Merrin became a director of Stillwater Mining in May, one of four nominees of activist investor Clinton Group, as shareholders intensified a contest for control of the palladium producer’s board.

She’s very, very strong on the corporate governance side of things and the market-facing aspects,” Mick McMullen, chief executive of Stillwater Mining, said from Montana, where Stillwater is based.

“There’s some big names on that board and working within the confines of that will be an interesting challenge, or an opportunity.” – Bloomberg



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