WIM UK: Mining for Talent – Part 2 has been published

Published: 13/02/2014

Mining for Talent – a Review of Women on Boards in the Mining Industry is out and was launched at a WIM UK networking event last night hosted by PwC and attended by many members and supporters.

This report is the second in a series of three undertaken by WIM (UK), analysing gender diversity at board level of the top 500 mining companies around the world. It is co-authored with PwC, and supported by Anglo American, BHP Billiton and Rio Tinto.

The report analyses the correlation between company performance (financial, environmental, social and governance) and the presence of women on management teams or directorates within the global mining industry. This year it also analyses education and background of all board directors of the top 500 mining companies, male and female.

What is new is that it looks at a wider pool of companies across more stock exchanges and each company was evaluated via 75 performance metrics making this report more in-depth and wide ranging by analysing more factors.

“Themes that emerged from the report are:
– It makes good business sense.  Despite low numbers, there is a striking correlation between return on assets and the number of women on boards.  In simple terms, this means that on average, for every £1 invested in a business, those with all male boards lose £2 and those with two or more women get £6 back.
– It can preserve the social licence.  Women on boards have made a measureable impact on the level of disclosure as well as the management of environmental, social and governance issues.
– The mining industry is slow to change.  There has been just 2% increase year on year of female board appointments to the top 100 global listed mining companies and at this level of change it will be 2033 before we attain the target of 30% of womenon boards in the mining sector.”

Mining remains the sector with the smallest percentage of women on boards with 7.2% on the top 500 mining companies. Figures are slightly higher in top 100 companies with 10.3% representation.

Women hold 11.5% executive & senior management positions across the top 500 mining companies; and there are only 2 female chairmen in the top 100 mining companies and with Cynthia Carroll stepping down from Anglo American last year only 1 CEO remains, Kay Priestly of Turquoise Hill.

The report manages to debunk 3 myths:
1) Small pool of female talent available for board positions
2) Not enough women have the right experience to sit on a board – actually 62% of women in executive management positions work in operations, finance or legal.
3) Women don’t have engineering degrees hence can’t sit on boards of mining companies – Only 32% male board directors have an engineering degree. Moreover, no correlation exists between an engineering degree and better board performance.

This analysis proves strong correlation between women sitting on boards and improved corporate performance at different levels. Super interesting and relevant to the mining industry is that companies with women on their boards have a better return on assets and a higher Enterprise Value to Reserves ratio. Women on boards result in smaller water consumption, better governance disclosure, higher community spend, higher likelihood of being a UN Global compact signatory and to have a CSR policy, a CSR/sustanability committee & and anti-bribery ethics policy – all of these will affect soial lience to operate.

The report corroborates findings of many other research projects on women on boards and generally on how gender diversity and increased female leadership influence economics and business. Unfortunately it does not prove causation. Hopefully it will be enough to convince those that still need convincing.

Now that myths have been proven wrong what will the industry do to act on this information? I am very curious to see what the reactions will be and how this report will be used by mining companies this year to implement & spearhead change.