global economy

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Keep it simple as suggested in yesterday’s Sunday Times article about Jack Welsh

As we navigate more and more treacherous business conditions, it is worth considering the common sense practices of one of the most successful CEOs in living memory, Jack Welsh.

He was a true leader of a business (GE) which grew in stature and commercial success under his expert stewardship; he is worthy of imitation. Check out the Sunday Times article here.

If you are still feeling punch drunk from last week and looking for entrepreneurial inspiration and to re-energise, see this YouTube video by Guy Kawasaki:

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All that glitters is not gold

We were well represented at the 2nd Annual Global Human Asset in Mining conference arranged by Fleming Gulf in London last month, where we spoke on the subject of maximising the benefit of relationships and dealings with external recruiters; we also contributed to a lengthy and cheerfully animated debate on ‘fly in, fly out’ and ‘drive in, drive out’ expatriate engagement choices and their operational efficiencies.

Branding and appearances

The conference was again extremely well attended, but there was a definite shift in language from the ATS systems and process focus of 2012, to a new emphasis on employer branding.  This manifested itself in a number of different ways, some cosmetic (i.e. visual branding) and some fundamental (i.e. portrayal of explicit values).  This has come about as the industry considers that good talent is becoming more and more difficult to attain, therefore the focus needs to be on keeping up the employer branding image.

There was specific disagreement of the prioritisation of the visual branding approach in isolation, particularly from the external recruiters in the audience and on the speaker register.  We and others emphasised that in fact the supply of labour is increasing, due to lay offs and project cancellations around the world, so there has never been a better time to target a preferred type of candidate.  However, it is most important that the company recruiting has a clear plan, that it is well communicated and that the recruiting process is consistent with that plan – this is what attracts quality individuals.

Applicants for roles are increasingly jaded with inefficient and pointlessly length processes – they are now much more willing to withdraw if they consider the recruiting process to be inefficient or undignified.  Companies need to enter the market with clarity and focus and ensure their reputations receive a boost, not a dent, in managing to a conclusion this very public undertaking (however secretive one believes it to be!).

Efficiency and profitability

There were also lengthy discussions on the recent fates of swathes of CEOs from the top mining companies.  It is clear that HR and recruitment in general have avoided much of the focus on commercial efficiency, but now the boom times are over, at least for now, increasing scrutiny will be placed on HR, its relationship with hiring managers, through to recruitment and retention of the best industry talent.

It is abundantly clear that inefficient hiring strategies, badly designed roles and poor recruitment execution or productivity (regardless of the involvement of external recruiters) will attract the ire of C suite executives and internal auditors – ultimately they will simply not let the basics lapse in favour of ‘glammed up’ employer branding pieces.  Gilding the lily is all very well, but if the flower is already wilting the image cannot possibly work.  Getting the basics consistently correct is clearly the way forward – it is not a mystery that any applicant wants clarity, simplicity and transparent, appropriate decision-making more than spangly, but disconnected visuals.

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Bribery Act 2010 – what does it mean for juniors?

BRIBERY ACT 2010 – What does it mean for juniors?

A “Red Letter Date” in any UK legal and management diary is 1st July 2010 – when the UK Bribery Act 2010 comes into force. Given recent media attention, the Act and its implications for UK businesses will be news to few. However, to mention the headline implications for UK companies  – the Act applies to all businesses registered and doing business in the UK; there is no upper limit on fines for companies found convicted of the corporate offence of failure to prevent corruption and the only defence for companies is to demonstrate to the court that they have in place “Adequate Procedures” to prevent corruption.

The “Adequate Procedures” have been generally described as including a statement of zero tolerance of corruption by management; an anti-corruption policy, anti-corruption training, Helpline availability and auditing and monitoring procedures. Implementing such procedures may present no difficulty for well-resourced companies but what does “Adequate Procedures” look like for small to medium-sized enterprises (SWEs) working in high corruption-risk countries, such as junior mining companies?

The most recent guidance on the Act published on 30th March 2011, repeatedly emphasises that the measures implemented by SMEs should be “proportionate” and that, in the words of State Secretary for Justice, Kenneth Clarke, “combating the risks of bribery is largely about common sense, not burdensome procedures”. The guidance fully acknowledges that for application of the 6 anti-bribery principles set out in the guidance is likely to be different for SMEs than multinationals. Common ground across companies however is that they should adopt a risk-based approach to managing bribery risks, specific to their circumstances.

The guidance does not have statutory authority but must be regarded by the two bodies which have the power to bring prosecutions under the Act – the Serious Fraud Office (SFO) and the Department of Public Prosecutions (DPP).

In responding to the Act’s introduction, juniors must realise that Bribery Act 2010 compliance is primarily a practical matter of implementing policies and processes. A number of the “Adequate Procedures” measures are straight-forward and easily able to be implemented. The world’s leading anti-corruption NGO, Transparency International, and The United Nations Global Compact (UNGC) have developed tools specifically to assist SMEs with anti-bribery compliance. It is important that juniors take a timely, responsible, proactive attitude to the Act and its introduction and are able to demonstrate that they have done so to the court.

  1. A responsible response and Board statement

The company’s Board should receive a presentation on the Act from its legal or policy advisers, discuss the Act’s implications for the company and the steps it will take. These may include delegating authority for the implementation of procedures to staff, legal counsel or engaging short term consultancy. However, the guidance says that it does not intend Bribery Act 2010 compliance to be burdensome for SMEs. Transparency International (www.transparency.org) has published a step-based, practical tools to assist SMEs to implement anti-bribery measures.

The Board should make a statement on zero tolerance of corruption. The statement should be published internally to offices and operations and externally and reproduced in the company’s Code of Conduct and Anti-corruption Policy.

2. Gap analysis

The company should assess the policies and procedures it already has in place to forestall anti-corruption, as a basis for the further measures it needs to systematically implement.

3. Risk analysis

Risk analysis should be periodic, informed and documented. Risks, especially in the mining industry, change over time given such considerations as government stability and cultural attitudes to corruption in countries where mining companies operate. A junior should assess the nature and extent of its exposure to potential internal and external risks of bribery. The guidance sets out examples of the risks that should be considered:

i. Country risk – perceived levels of corruption reflected by indicators such as Transparency International’s annual Corruption Perceptions Index (CPI).

ii. Sectoral risk – what are the risks specific to the mining industry?

iii. Transaction risk – certain types of transactions such as charitable and political contributions, licences and permits give rise to higher levels of risk.

iv. Business opportunity risk – higher value projects or those involving many contractors or intermediaries indicate higher potential risk.

v. Business partnership risk – relationships involving intermediaries, consortia, joint venture partners, politically exposed persons and  foreign public officials entail high potential exposure to risk.

vi. Procedural risk – to what extent may internal structures or procedures forestall risk?  There may be deficiencies in employee anti-corruption or general training, skills and knowledge; lack of policy or clarity in policy on key areas and lack of a strong, public top level commitment to anti-corruption.

4. Code of Conduct

The company may already have a Corporate Code of Conduct. This should be revised to include the statement of zero tolerance of corruption.

5. Anti-corruption Policy

An anti-corruption policy need not be extensive. What is just as important as its content is that the policy is practical, accessible to employees – across office and mine site operations, implemented and widely published and distributed. The policy should be augmented by communications materials underpinning key aspects of the policy. The Policy should contain statements on the following key areas:

–       Bribery

–       Gifts and hospitality

–       Facilitation payments

–       Conflicts of interest

–       Use of company assets

–       Use of intermediaries

–       Relations with foreign public officials.

6.    Due Diligence

Due diligence undertaken on renewing current and undertaking new projects and contractual relationships should also be proportional and risk-based. Due diligence should already be part of good corporate governance, though may need to be augmented by enquiries related to corruption-risk. The due diligence research may be internet based, augmented by specific enquiries appropriate to the sector and country and require the prospective intermediary or project partner to provide information and documentation in response to a questionnaire.  For example, providing examples of their own Code and Anti-corruption statements/policy.

Under the Act, a company’s employees  are presumed persons ‘associated’ with the organisation. Therefore, companies may wish to incorporate ethics-based questions and due diligence into their recruitment and human resources procedures and  ensure that all new employees receive training on the company’s anti-corruption policy on joining the company.

7. Anti-corruption training and communications

Internal communications should convey zero tolerance of corruption by management and provide a system for employees to ask questions or report concerns. Training of employees should be proportionate to risk. It might entail a general presentation on the anti-corruption policy to the majority of employees and specifically focussed training for middle and senior management on aspects of wider corruption-exposure – such as intermediaries and dealing with foreign public officials. There may be particular cultural aspects and attitudes regarding corruption of which employees should be aware, depending where the company operates. It will be important for a company to demonstrate that training was received by employees and refresher training provided at appropriate intervals by keeping careful records of training.

8. Monitoring and review

Anti-corruption is a dynamic field and companies must remain vigilant and responsive to new risks which may arise where and with whom they work. A company should institute a protocol for periodic review of its anti-corruption policy, training, recording and reporting. It might seek some form or external verification of its anti-bribery procedures or apply for certified compliance with an independently verified industry anti-bribery standard.

Foremost will be for juniors to be informed of the Bribery Act 2010 and take responsible, proportionate measures to implement risk-based anti-bribery compliance.

Michelle Witton is an Ethics & Compliance Consultant and lawyer, who has implemented anti-corruption compliance for Anglo American plc and AstraZeneca. Michelle can be contacted at www.mwethics.com (under construction) or 07950 932070.

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Super cycle or super-charged?

Cambridge House’s January conference in Vancouver in a new venue (the new and very large conference centre extension) – would it be parked in a small corner of the facility, embarrassingly tucked away? Not a bit of it. The conference was thronged with personal investors on the first day (Sunday) and hugely well attended throughout. Many reflected on the healthy cooling off of the gold price to a little over $1,200, but that has also since bounded upwards again, fuelled by depreciating major currencies and defensive buying of gold.

The bankers were out on force for Indaba, too, with brokers’ notes maligning new kids on the block who arrived with sharpened pencils and open cheque books come to take advantage of the popularity of commodity stocks. Partying in Cape Town was intensive too, with many taxing evening itineraries for most company executives. Toronto was no different, again record numbers to PDAC and the familiar jam-packed escalators into the bowels of the conference centre to partake of the feast.

Comments abounded of the lack of skills available, the momentary shortage of engineering skills and the perennial scarcity of geologists which is already increased in intensity. But let me reassure you, dear reader, that there are always the right people for the right job and it is not always necessary to pillage the competition to achieve such feats……. and yes, you do need the right partner to find them, so look no further!

Frothy or on the start of the next super-cycle? Time will tell……..

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LOTS of London conferences – a summary

The silly season has started again with back to back conferences in London to celebrate uncharacteristically cold English weather for this time of year. The Canadians may laugh but averaging -5°C is cold!

The Investing in Africa conference by MineAfrica clashed with Australia Day but was nonetheless extremely well attended despite the travel disruptions caused by the weather. The outlook was considered to be excellent, with some superb prospects in some emerging provinces, with Eritrea represented strongly with speakers of ministerial rank at the conference.

The assembly was honest about the challenges, with continuing difficulty for foreign investors in Zimbabwe and South Africa featuring less than usual because of commercial and political challenges – however, the delegates at Australia Day probably said the same of the recently blunted federal super-tax from Canberra.

There were some illuminating presentations not only from some excellent resource companies, but markedly from TMX, who highlighted their bullishness and their marked competitive successes over the last year or so; the UK Bribery Act and its equivalents threw up some interesting and heated discussions, with interesting country corruption ratings scales aired.

Mines & Money was the busiest for several years, with Canadian and Australian companies leading the charge with some great stories and distinctly bullish sentiment – their UK based colleagues were carried on a tide of optimism. The level of development and renewed exploration is already highlighting intense shortages of expertise – exploration geologists are particularly in demand with experienced mine developers closely following on the shopping lists. Watch this space for soaring salaries, particularly in the mining hotspots and compensation to offer the most sympathetic non-financial incentives! Overall some great business done, even better sentiment and collectively optimistic for 2011 – but ready for a holiday after 2010!

The third London conference of the week was Canada Day, which again was affected by the weather but reiterated the bullishness of the Canadian companies and the positive support given by the TSX investors for endeavours all over the world. Some juniors have demonstrated massive resilience and magical timing, pulling great prospects out of the bag to catch the market upturn.

Best wishes to one and all for a safe journey home, a restful Christmas and a fantastic 2011 – and to all those that brought that breath of great sentiment from abroad into London this week… you hum it, we’ll sing it.

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Fabulous Finex!

Finex 2010 was a financing mining exploration conference held at the Royal Geological Society in London. It was organised under the chairmanship of Dr. Bob Foster of Stratex, who set the tone early with an upbeat and good humoured introduction which was replicated throughout the two day conference.

The great and the good were all there with academics, eminent brokers, economists and financiers presenting a collectively rounded programme which occupied all topics eloquently, objectively and completely. The rules disallowed blatant promoting (there were a range of sponsors and a small fee for entry), which further enhanced the speaking standard.

There were many cautionary tales and success stories from commodities to jurisdictions – Bob and his team deserve the highest praise for putting together a great conference. By the way, the mining schools were on hand with undergraduate exploration geologists looking for summer placements, feel free to respond to this with a comment if you are interested or get in touch with the schools direct.

Check out the “who’s who” of speakers:

  • Dr Adrian Boyce – Manager, NERC Isotope Community Support Facility, Scottish Universities Environmental Research Centre
  • Bill Scotting – Exec VP, Head of Strategy, ArcelorMittal
  • Dr Bob Foster – CEO, Stratex International plc
  • Cedric Chehab – Head of Commodities Research & Strategy, Business Monitor International
  • Charles Gibson – Sector Head, Mining Research, Edison Investment Research Ltd
  • Charles Kernot – Director, Metals & Mining, Evolution Securities Ltd
  • Dr Charlie Moon – Programme Leader, MSc Mining Geology, Camborne School of Mines
  • Chris Watling – CEO & Chief Markets Strategist, Longview Economics
  • Dr Chris Hinde – Editorial Director, Mining Journal, Aspermont UK
  • Christopher Hall – Mining Consultant, Grant Thornton
  • Claire Dorrian – Senior Manager, Product Management, AIM
  • Dr Clive Hallett – Principal, CRT Minerals; Project Manager, MIRO (Minerals Industry Research Organization)g
  • Dr Duncan Large – Consulting Geologist
  • Fergus Anckorn – Technical Director, AMEC Earth and Environmental (UK) Ltd
  • Gabriel Didham – MD, Objective Capital Research Ltd
  • Graham Brown – Group Head, Geoscience & Exploration, Anglo American
  • Dr Hazel Pritchard – Director, Exploration & Resources BSc, Cardiff University
  • Hugo de Salis – Principal, St Brides Media & Finance Ltd
  • Prof. John Ludden – Director, British Geological Survey
  • John Meyer – Head of Resources, Fairfax ISL plc
  • Prof. Laurence Robb – Univ. Oxford; Director, Savannah Gold Ltd
  • Liv Carroll – Senior Business Analyst, Gemcom Software International Inc.
  • Michael Lynch-Bell – Partner, Global Mining & Metals, Ernst & Young
  • Prof. Neil Phillips – Univ. Melbourne; Phillipsgold Pty Ltd (SIR JULIUS WERNHER MEMORIAL LECTURE)
  • Nigel Jackson – Chairman, CBI Minerals Group
  • Paul Dewison– Research Manager, Bloomsbury Mineral Economics
  • Phillip Crowson – Hon. Prof., Univ. Dundee; former Director, London Metal Exchange
  • Richard Chase – Managing Director, Ambrian Partners
  • Roger Goodwin – President & Group Finance Director, Griffin Mining Ltd
  • Dr Sacha Backes – Investment Officer, Oil, Gas, Mining, & Chemicals, International Finance Corporation
  • Dr Stephen Henley – Deputy Chairman, PERC (Pan-European Reserves & Resources Reporting Committee); MD, Resources Computing International Ltd
  • Tanya Costello – Associate Director, Control Risks
  • Dr Tim Williams – Director, Global Mining and Metals, Ernst & Young
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People for projects? A bespoke solution

If you are an individual with access to an excellent project or commercial opportunity, perhaps we can help. For several months, we have been looking at project ideas in their infancy, sometimes even with only one individual driving the establishment of the business.

We have contacts all over the world which we indeed use typically to fill conventional search assignments. However, for such projects we are very happy to work with a project initiating individual or team to ‘wrap around’ a balanced board and senior management (when the timing is appropriate) which will be able to assess and promote a project. We will behave as a people partner to the new business in return for equity in the start up business. This is on a success only basis, there is no obligation for either a consultation or our assistance unless specially agreed in writing. If you have a project and are seeking to find the people and funding to go with it, please get in touch privately, we may well be able to help. Likewise, if you would like to privately suggest any refinements or other complementary ideas, please let us know.

If you have an interest in this as an idea as a topic of discussion, we welcome your comments on this page.