Is your company’s board ready to take on tomorrow’s challenges? Here are five questions you should be asking now.
Energy & Mining International published an article written by Russell Reynolds Associates Consultants Jon Martin and Joe Saliba titled, “Is your company’s board ready to take on tomorrow’s challenges? Here are five questions you should be asking now.” The piece looked at the makeup of current boards of mining companies and highlighted the best questions to help mining companies build high-performing boards for the future. The article is excerpted below.
The global mining industry has experienced tremendously challenging market conditions over the past few years. Commodity prices declined dramatically and billions of dollars of market value disappeared. In response, mining companies focused on improving cost discipline, restructuring asset portfolios and driving productivity improvements.
Boards of mining companies have also had to respond, particularly in terms of the types of non-executive directors chosen to serve. As we head into a new, hopefully more growth-oriented phase of the cycle with price improvement seen across most commodities, we expect the topic of board composition to continue to capture significant attention.
We examined the makeup of a sample group of non-executive directors in large-cap and mid-cap companies from “traditional/Western” countries in 2011 and 2016, covering both the top and the presumed bottom of the current commodity cycle. (A follow-on study examining boards of mining companies from emerging market countries will be released later this year). What follows is what we found.
Age distribution – Interestingly, we found that since 2011, both large-cap and mid-cap boards within the sample group have matured, with a higher proportion of board members now in their 70s and fewer in their 50s. This aging of the boards has occurred despite relatively high director turnover on both large-cap and mid-cap boards and is likely due to a need to retain the most experienced directors during a very turbulent period of the market. We expect this trend to soften if not reverse as commodity markets continue to recover.
To read the full article, click here.