Parker rings the changes at Anglo

Allan Seccombe | Wed, 04 Nov 2009 15:00
[miningmx.com] -- JOHN PARKER, chairman of Anglo American, wants to bring a professional miner onto the board of the company which is unlikely to make an acquisition any time soon and does not need to raise capital towards building its projects.

Parker, who was on a three-day visit of Anglo’s South African operations, said he is forging a close relationship with CEO Cynthia Carroll, who he is backing to the hilt, and that he’s helping steer the company towards delivering value for shareholders.

Parker’s took the role of chairman on 1 August after Mark Moody-Stuart stepped down after seven years in the position. His appointment came as Anglo was fending off the unwanted interests of Xstrata, which in June proposed a nil-premium merger of the two companies.

Analysts said at the time one of Parker’s key priorities would be to shake up management and the board, which was described as “not exactly covering itself in glory in recent years” and being largely responsible for the predicament Anglo found itself in where it was perceived to have under-delivered on its assets and opening itself to an approach from Xstrata, hoping to win support from disaffected shareholders.

Xstrata has since withdrawn its bid and Anglo has announced a major shake-up of the business, clearing out a layer of management and staff totalling some 2,700 people and setting up seven core business units, while at the same time putting a host of non-core businesses into a separate division to dispose of when the prices are right. Analysts have valued the disposals could raise between $6bn-7bn.

Among Parker’s priorities now that Xstrata has been successfully seen off is to strengthen the board, which currently does not have a professional miner on it, and unlock value within the group.

Chris Fay and Rob Margetts are to step down as non-executive directors, an opportunity Parker is using to bolster the board to hammer the company into shape.

I'M NOT EXPECTING FAILURE

“I’ll put together the strongest board I can, with the right range of skill sets. I would expect that between now and December we would announce another one or two members to the board. One of my priorities is to refresh the board and to ensure it’s absolutely fit for purpose,” Parker told Miningmx.

“There is no substitute for having the right breadth of skill sets and experience that when you pull it all together it can tackle any issue that comes through the boardroom door,” he said.

“It’s not easy to find people. For example, I would really like to find a professional miner with a life time of experience because I’d like to bring that skill set onto the board, which we don’t have at the moment amongst our non-executive team. I’m working on it closely. You’ll only know when it’s announced,” he said.

In one of the biggest surprises of the restructuring was the dismissal of Ian Cockerill, the former CEO of Gold Fields and the head of Anglo Coal. Asked why the experienced Cockerill couldn’t have stayed on and filled that position, Parker said: “You can’t move an executive into a non-executive point of view from a governance point of view, unfortunately not.”

What is clear from Parker is that he demands delivery from the management team at existing operations and those working on new projects.

‘ He dismissed speculation in the market that he’d given Carroll six months to effect meaningful changes at Anglo or move on.

“That’s ridiculous. No wise chairman would walk in and give his chief executive six months. In fact, if you thought someone could only last six months you should do the honest thing and replace them,” he said.

“I’ve been around enough companies to know what you should do. I’ve made it very clear from day one I’m backing Cynthia and the senior management team. This is a team effort,” he said.

“One of the things I hope I’ll leave behind is a very strong board that is team driven and a very strong executive team under Cynthia that is team-driven and people will only be replaced if they don’t deliver,” he said. “I’m not expecting failure.”

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