‘Special’ executives under fire
The trouble with mining bosses
Careful, conservative management is the best style for cyclical industries like mining, analysts agree
Jim Rutherford, former Capital International Investors fund manager and now a nonexecutive director of Anglo American Corp, says he applied the "4S" rule when he was an analyst. If within a few paragraphs of an executive’s report, the words "synergies" "strategy" and "shareholder value" were used, Rutherford applied the fourth S: "sell". Fund managers and analysts from institutions representing about $2 trillion, or seven times SA’s gross domestic product, agreed in a panel discussion at the Joburg Indaba that mining industry executives have been worse than those from any other industry in capital allocation, meeting forecasts and communicating with investors. "It is almost as if the mining industry believes it is special," one said. Jamie Horvat, manager of the M&G Global Basics Fund, said over the past two decades mining executives had lost their focus on return on invested capital and partnerships with governments and stakeholders. They needed to go back to those principles. Inst...
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