No Women on Glencore’s Board Marks Mining Imbalance: CommoditiesThomas Biesheuvel
Glencore International Plc’s $36 billion takeover of Xstrata Plc will unite about 130,000 employees that operate in more than 40 countries. The proposed board of directors doesn’t include a single woman.
Mining lags behind every other industry, including oil and gas, in terms of gender diversity, with women occupying just 5 percent of board positions, according to a January report by Women in Mining U.K. and PricewaterhouseCoopers. Of the seven companies in the U.K.’s benchmark FTSE 100 Index with all-male boards, five are miners. Four of the world’s five biggest mining companies trade in London.
“If I chaired an all-male board I’d set to work immediately getting some women on it,” said Mark Moody-Stuart, a former chairman of both Royal Dutch Shell Plc and Anglo American Plc, whose board appointed Cynthia Carroll as its first woman chief executive officer. “I don’t think they really have much of an excuse. It’s a matter of putting thought and effort into it.”
Mining has long been seen as a male bastion, with women banned from working underground in some countries until recently. That’s being challenged by a growing skills shortage amid unprecedented demand for natural resources. A strong pipeline of women in senior management is ready to take the next step to the boardroom, according to a lobby group, supported by a proven correlation with higher profit margins.
Antofagasta Plc, Kazakhmys Plc and Vedanta Resources Plc join Glencore and Xstrata as mining companies with all-male boards. Chemical maker Croda International Plc and Melrose Industries Plc are the two other members of the FTSE 100 Index without female board members.
Glencore said a search process for a female director had identified potential candidates before being held up by the deal with Xstrata to create the world’s fourth-largest mining company.
“The appointment of a female board director is a significant consideration and will be an important area of focus for the new nominations committee,” the company said in a statement.
Glencore fell 2.5 percent to 382.35 pence by the close in London. Xstrata also declined 2.5 percent to 1,148.5 pence.
U.K. Prime Minister David Cameron has urged companies to do more to promote women to board level, although his government has ruled out imposing quotas. A 2011 report by Mervyn Davies, a former banker, called for a target of 25 percent female representation at the biggest businesses.
There is “a long way to go,” Cameron said in Mumbai on Jan. 18, according to the Press Association. “If you look at the top businesses in Britain, there still aren’t nearly enough women in the boardroom.”
Men-only boards project a “blokey” culture that is damaging to the reputation of companies, said Fiona Hathorn, managing director of Women on Boards U.K., which campaigns to improve gender equality. “Those companies that don’t have women on their boards, it really speaks volumes that they really don’t believe women make a difference.”
Mixed boards can lead to better financial performance, according to a 2012 report by Credit Suisse Group AG. The report said that in the past 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 performance. Mixed boards also had a higher return on equity, lower gearing and better average growth, the report showed.
Anglo American has the highest percentage of women on its board among London’s biggest miners with 18 percent, according to data compiled by Bloomberg.
Carroll, the first woman, external hire and non-South African to run Anglo, said in October she would stand down. The mining company had lost almost a quarter of its value during her five-year tenure. Carroll’s departure in April will leave no U.K. miner with a female CEO and only two companies in the U.K.’s FTSE Index headed by a woman.
The board of BHP Billiton Ltd., the world’s biggest miner, is 15 percent female, while Rio Tinto Group has 14 percent. Anglo, Kazakhmys and Glencore all have more than 20 percent of women in management positions, according to Bloomberg data.
The U.K.’s Business Secretary Vince Cable, whose department is responsible for economic growth, wrote to the chairmen and CEOs of the seven companies without female board members last month, urging them to take action to redress the balance. Doing nothing is “not an option anymore,” according to Cable, who said he wanted to see the end of all-male boards by 2015.
The number of all-male boards in the FTSE 100 Index of leading U.K. shares has fallen from 21 in 2010, Cable said. While he recognized that some industries, especially mining, had “unique challenges” in diversifying their boards, partly because of the frequent travel and project work involved, that was no longer an excuse.
“Having more women on your board is a show of better corporate responsibility generally,” said Amanda Van Dyke, chairwoman of Women in Mining, a non-profit group that promotes women in the industry. “The skills required at the board level are not only operational and technical, they are also business skills.”
Of the top 500 mining companies surveyed in a January report by Van Dyke’s group, the 18 with 25 percent or more of their board made up of women had an average profit margin for the 2011 financial year that was 49 percent higher than the total.
For every two women directors there are three women in executive management positions, the report found. Their growing experience may eventually lead them to a place on the board, it said.
“Diversity is absolutely fundamental to the efficient operation of a global company,” said Moody-Stuart, who along with Carroll also appointed Maria Silvia Bastos Marques and Mamphela Ramphele to the Anglo board during his chairmanship. He said the additions improved the company’s board, changed the nature of discussions and led to greater cooperation.
Xstrata declined to comment when asked about the lack of women on its board. The company said in its 2011 annual report that it told executive search firms to include “suitable female candidates” on any shortlist for new non-executive directors. The company said at the time it hoped to welcome a female director to its board in “due course.”
Kazakhmys, the biggest copper producer in Kazakhstan, said the selection of board members “must be driven by professional need and merit.”
Antofagasta, the copper producer controlled by Chile’s Luksic family, says in its annual report that it will ensure board appointments “are made on merit, taking into account the benefits of diversity including gender diversity.”
Vedanta referred to a 2011 statement where it said it “aspires to have 25 percent of women on the board by 2015.”
“You have to believe in your head that it’s good for your business to have women around, as if the board doesn’t believe it they won’t do anything,” said Hathorn. “They’re operating in the 20th century, they need to get into the 21st.”