Most companies have some sort of problem with board member representation. However, a new report from executive search firm Swann Global suggests that mining company boards may not only reflect this but be a particular example of the failings of board representation.
The study looked at 686 board members, across 120 mining companies listed on the London Stock Exchange or Alternative Investment Market. In its introduction, it quotes corporate structure advisor the Pearce Trust as saying: “A company which applies the core principles of good corporate governance - fairness, accountability, responsibility, and transparency - will usually outperform other companies and will be able to attract investors, whose support can help to finance further growth”.
Naomi Kent, North America president of board member network In Touch Networks, tells us: “There are many different theories around what makes an effective board. There's been many, many studies done around what is right. I think what's right for the business and what's right for the company and the industry really depends on who you're talking to.
“My personal view is that the board needs to have different perspectives on the business. You can't just bring in anybody who’s different from the outside. You have to bring in somebody who's very familiar with the business and understands the industry but also brings a different perspective.
“You can look at age range, experience range, you can look at diversity in terms of gender and ethnicity and you can check a lot of boxes, and it doesn't always mean that the board is going to be effective and that they're going to work together well. There are other things that people look at, like attendance of meetings, how people work together, and having that cultural fit across a group. Being respectful of the CEO’s decisions, but also being able to advise and being able to get your point across wisely.”