Is your company’s board ready to take on tomorrow’s challenges?

Here are five questions you should be asking now.

By Jon Martin and Joe Saliba

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. 

Today’s Boards

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.

Gender representation – Our study confirmed that the mining industry is progressing towards greater gender balance on its boards. The share of female directors within our sample has almost doubled (from 14 percent to 27 percent) for large-cap companies and tripled (5 percent to 15 percent) for mid-cap companies in the past five years. However, while the overall trend towards more gender balance is positive, it remains uneven and starts from a relatively low base.

Geographical diversity – This seems to have been a lower priority for mining companies. Despite a globally diverse spread of assets, over 85 percent of directors of both large-cap and mid-cap companies in our sample continue to hail from the following five countries: Australia, Canada, South Africa, the United Kingdom and the United States. Little has changed along this dimension since 2011. In the future, we expect to see a more pronounced move towards greater board representation from the markets in which many of these mining companies operate.

Operational/technical expertise – Our analysis has revealed that mining boards possess less technical and/or operational expertise than one would imagine, a surprising finding for such a technically challenging industry. Large-caps in particular were seen as underweight in this area, with some companies in our sample lacking even one director who met the criteria. Boards should also consider having at least one qualified technology executive (QTE) as a director to help evaluate capital allocation, risk and other strategic decisions from a “digital” perspective, particularly as mining companies accelerate their adoption of data analytics and other innovation approaches.

Tomorrow’s Boards

There are five questions that may not have received sufficient consideration in the recent past, but that we believe are critical to helping mining companies build high-performing boards for the future:

1. As we bring new directors onto the board, are we appropriately balancing the need for industry experience and institutional memory with innovative and fresh perspectives that may challenge existing norms?

2. Does our board represent and foster diversity of thought, whether it be grounded in gender, ethnicity, regional/cultural background or any other dimension of diversity?

3. Does our board reflect the geographic diversity of our operations so we can fully appreciate the complexities surrounding our social license to operate in our various host communities?

4. Do we have directors with sufficient operational/technical expertise who can help to evaluate capital allocation decisions from an on-the-ground/at-the-mine-face perspective?

5. Does our board include directors with the credentials to address the threats and opportunities that digitization will bring to our business?

Finally, boards should engage in succession planning well ahead of the urgent need for a new director – both to establish which capabilities are needed and what type of profile would be suitable to fill the requirements.

Jon Martin is a managing director in Russell Reynolds Associates’ Toronto office and co-leads the firm’s global Mining and Metals practice with Joe Saliba, a managing director based in Melbourne. Russell Reynolds Associates’ full report, “An Industry in Flux: Building a Mining Board for the Future,” can be accessed at



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