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 Plc, the Swiss commodity trader, which on June 26 appointed mining executive Patrice Merrin. Prior to her arrival, Glencore was the last company left on the U.K.’s FTSE 100 Index with an all-male board. At the start of last year, five of the seven corporations on the U.K.’s FTSE-100 Index without women 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 Group Inc. investment banker and founder of executive search company Trewstar Corporate Board Services, which focuses on placing women directors.
Merrin’s appointment to the board of Glencore and her public endorsement of a goal of appointing women to a third of all board seats is a milestone for the $80 billion company run by billionaire Ivan Glasenberg and may open opportunities for more women directors.
Glasenberg’s company had been a lightening rod for criticism from activists, shareholders and U.K. business secretary Vince Cable for its all-male board. The appointment of the 65-year-old Canadian last month enabled Glencore to at last shed its status as the only company on the U.K.’s FTSE 100 Index lacking a female director.
Studies increasingly show that women on boards isn’t just good for a company’s image, it’s also good for business. Mixed boards contribute to stronger financial performance, according to a 2012 report by Credit Suisse Group AG. In the previous six years, companies with a market value of more than $10 billion, with at least one woman on the board, outperformed those with all-male boards in terms of share-price, the report said. Mixed boards also had a higher return on equity, the report showed.
Finding qualified women board members for mining companies should be no different than any other industry, said Stewart. Since 2013 Trewstar has placed 15 women on corporate boards and recently placed a female director on the board of Mosaic Co. (MOS), the largest U.S. producer of phosphate fertilizer.
When Mosaic chairman Bob Lumpkins first approached Stewart about finding a woman board member, he was skeptical she could find one suitable for what he called a “dirty-fingernails business,” she said. “Within a month we had ten candidates for him. He interviewed three, all of whom would have done well.” Eventually, the board chose 47-year-old Denise Johnson, vice president of the integrated manufacturing operations division at Caterpillar Inc. She’s now one of two women on the board of Mosaic.
Merrin, who joins former Morgan Stanley CEO John Mack and former BP Plc CEO 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 license to operate,” said Margot Naudie, a Toronto-based portfolio manager who has known Merrin for more than a decade and who helps oversee about $2.8 billion at Marret Asset Management Inc. “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,” Helena Morrissey, founder of the 30% Club named after its target for female representation on FTSE 100 boards by the end of 2015, said by phone from London. “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 also is the founding U.S. chairman of the 30% Club, which started in 2010 in the U.K. A government-commissioned study in the U.K. led by former Standard Chartered Plc Chairman Mervyn Davies recommended a 25 percent goal by 2015 rather than quotas.
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 finance minister.
More recently, she has been chairman of CML Healthcare Inc., an Ontario-based diagnostic services provider. In that role, she shepherded through last year’s C$1.2 billion ($1.1 billion) takeover by Lifelabs Medical Laboratory Services.
Merrin became a director of Stillwater Mining Co. in May last year, one of four nominees of activist investor Clinton Group Inc., 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 officer of Stillwater Mining, said in a phone interview from Billings, 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.”
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