Last August, The Daily Telegraph newspaper reported that Anglo American’s chief executive Cynthia Carroll had been asked by the company’s shareholders to step down.
This was despite the fact that she had just led the take-over of the global diamond miner, De Beers.
Anglo acquired an additional 40 percent stake in De Beers for more than $5 billion taking its total shareholding in the diamond company to 85-percent.
Although the pressure to see her back was simmering, De Beers and Anglo announced - on October 3, 2012 – the appointment of Carroll as the diamond group chairperson.
“The Board of De Beers Société Anonyme is pleased to announce its appointment of Cynthia Carroll, Chief Executive of Anglo American plc, as Chairman,” read the statement.
Following her appointment, Carroll said: “I am honoured to accept the role of Chairman of this great company. Anglo American has been a shareholder in De Beers since 1926. That shared history between Anglo American and De Beers has given me a deep appreciation for the business and the unique nature of diamonds. I look forward to leading the Board and continuing to support the management of the world’s leading diamond company.”
After her appointment as De Beers’ chairperson, some of us thought that the shareholders had upgraded Carroll’s report card from zero to a pass with credit.
Ephemeral joy
However, 23 days later, the media and the mining industry woke up to some “shocking” news from Anglo.
Carroll had decided to step down as chief executive, with the board’s agreement.
This meant that apart from her executive role, she was going to relinquish her position as the chairperson of Anglo American Platinum and of De Beers as well.
The company said she would remain in her post(s) until a successor has been appointed.
“It is a very difficult decision to leave, but next year I will be entering my seventh year as Chief Executive and I feel that the time will be right to hand over to a successor who can build further on the strong foundations we have created,” Carroll said.
So what happened to someone who not more than a month said was “honoured” and looking “forward” to lead De Beers as its chairperson?
Why is she all of a sudden saying that time was “right to handover to a successor”?
What is it that influenced her decision now that could not convince her 23 days earlier that she was not the right person to lead De Beers and Anglo to the “promised land”?
Surely, one does not need to be a rocket scientist to establish that Carroll had no plans of leaving the group but her exit was more of a boot.
Livid shareholders
As stated at the beginning of this article, Anglo shareholders were not happy with Carroll as the captain of their ship.
Shareholders, according to The Daily Telegraph, were worried that the company’s poor performance had made it vulnerable to an opportunistic takeover.
Shares in Anglo were also 20 percent lower than when Carroll became the chief executive in 2007 and 45 percent lower than their peak in May 2008.
"The company is suffering from bad execution, a poor strategy, and a crisis of confidence in the leadership," an unnamed shareholder was quoted as saying.
“We haven't been happy for a while but the last set of results was the coup de grace.”
Some reports claimed that her 2008 decision to invest $5.5 billion in the Minas Rio iron ore project in Brazil made strategic sense on paper, but endless problems had turned the project into a “wasteful boondoggle”.
Recent labour woes in South Africa had also revived long-standing worries among some investors over Anglo’s exposure to South Africa.
Some shareholders were also livid about Anglo buying back shares at the top of the market in 2008, while others said it overpaid for an increased stake in Kumba, De Beers and the recent purchase of the Revuboe coal project in Mozambique.
Carroll’s sysmpathisers, however, said that she should not be blamed for the main causes of that underperformance.
They said Carroll had improved safety issues, as workers were dying at a rate of more than 40 a year when she arrived in 2007 but this had fallen by more than half.
“The outgoing boss may have reached the limit of what an industry outsider with a Harvard MBA could achieve. But her eventual successor is unlikely to have an easier time,” reported Fin24.
However, in as much as safety issues were of paramount importance, it is a matter of reality that shareholders were mainly concerned with someone that safeguards their pockets as much as he/she protects employees underground.
This is a task that Carroll failed, according to shareholders, and seeing her go was the only way out.
The way, however, this played out, did not portray the company as serious in solving its problems effectively.
It surely does not make sense that you report a promotion of someone today only to fire that person three weeks later.
If that is not confusion, I don’t know what it is.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
